The quality and efficiency of supply chain operations among mining suppliers can positively or negatively impact on the performance of their customers’ mine operations, along the complete chain of operation from pit to port.
Recognising this, Weir Minerals Africa has successfully leveraged technology and knowledge to advance its supply chain operations to a world class level of efficiency in South Africa and throughout Africa, with significant benefit to mining operations.
This article first appeared in Mining Review Africa Issue 3, 2019
According to supply chain director Luhann Holtzhausen, the company’s progress on this front has been achieved despite its high volumes of specially engineered and bespoke products and components.
“We ship almost 800 000 items each year from our main distribution hub in Alrode near Johannesburg, similar to the fast-moving consumer goods sector's efficiency,” says Holtzhausen.
“However, the variability of our materials handling requirement is much higher, making our supply chain process more complex.”
With stock accuracies now reaching 98% – above the global benchmark of around 95% – 70% of orders are delivered within two weeks of sales orders being received.
The high inventory accuracy has also raised the on-time delivery performance over the last year to above 90%.
“In terms of what we ship, we have achieved 20% volume growth year-on-year since 2016, while still maintaining a single-shift operation,” he says. “We can now regularly ship 3 000 to 5 000 parts per day.”
An indication of the hub’s volume of traffic is the departure of four to six super-link trucks – up to 30 t in capacity – each week to cross-border destinations in southern and central Africa, as well as two to four container loads to other destinations by sea.
With the introduction of its new systems and processes, management now has real-time visibility of demand and stock in all warehouses across Weir Minerals Africa’s 75 stocking locations across the region.
“Our systems give us end-to-end velocity measurement to monitor the flow of goods from receipt at our warehouse to the actual time of delivery at the customer’s location,” he says.
The innovations now in place also drastically reduce the time required for stocktaking.
Whereas previously this important requirement could take up to two weeks, it can now be completed in a matter of days.
Data for the stocktake is electronically entered in real time providing a live count, while the variance count can be run within hours.
The system also allows continuous cycle counts in addition to the annual audited stock-take.
The benefits are realised in other locations such as the newly upgraded Kitwe distribution facility in Zambia, where the same systems have been implemented.
This new site – which serves as the strategic hub for central and east Africa – is fitted with 100% location control and Wi-Fi enabled scanners, says Holtzhausen, so that all items can be picked and binned in real time.
“The advantage of this high-visibility under-roof warehouse is that it can deliver the right goods in the right quantity to the right place, with no artificial delays in the process,” he says.
Holtzhausen emphasises the vital impact of best practice being applied, not just in systems but in management and training. This includes the importance of visible and felt leadership.
The company’s success to date in promoting supply chain efficiencies has, for instance, made good use of the ‘gemba’ philosophy, where management is regularly and constructively on the shop floor to identify opportunities for safety and efficiency improvements.
Constantly streamlining the supply chain system is key to avoiding the ‘bullwhip effect’, he says, which occurs when orders sent to the manufacturer or supplier create larger variance than the sales to the end-customer.
These irregular orders in the lower part of the supply chain become more pronounced as they progress higher up in the supply chain.
This variance can interrupt the smoothness of the supply chain process from pit to port, as each link in the supply chain will over‑ or under‑estimate the product demand, resulting in exaggerated fluctuations and interruptions in supply.
“As suppliers, it is vital that we have accurate information on each of our mining customer’s consumption patterns as this helps ensure that there are no stock-outs,” says Holtzhausen.
“Among the benefits of our supply chain efficiency for customers are reduced lead times, improved availability and less downtime.
"However, there is perhaps even a more significant advantage that sometimes goes unnoticed and that is to build customers’ confidence in our ability to deliver, so that they can eventually start holding less stock themselves.”
He highlights that a mine’s trust is earned over years of consistent delivery performance, and allows the customer to reduce their on-site stockholdings of components and thereby reap a number of financial benefits such as freeing up working capital.
So important is this factor that Weir Minerals Africa conducts weekly key performance indicator reviews that take any stock-outs that occur into account.
The company’s enterprise resource planning system has also been able to reduce the level of inherent human error found to exist in every workplace, and which inevitably disrupts product flow.
Among its interventions is picking up slow-moving or obsolete items in a customer order, so that a query is raised to trigger an additional check.
This helps identify errors in the initial orders before they enter the procurement system.