Transactional Procurement - Newmont, Ghana
Overview
In 2011 the gold price took a negative downturn, which had a direct impact on the mining industry. The reduced gold price encouraged producers to focus on containing soaring operating costs targeting procurement savings in the global supply chain market. Newmont wanted to enhance and automate the supply chain performance to accommodate the falling gold price and incorporate efficiency through-out both its Ghana operations. In addition to achieving basic outsource driven economies of scale, Newmont also felt this transition would enable them to develop its supply chain in order to deliver additional value to its stakeholders
Client Challenge
Identify the overall cost of supply chain acquisition. Lower the cost of overall supply chain acquisition as quickly as possible. Reducing the costs associated to procurement ensuring stakeholders still receive a high level of service with no impact to production
Solution
Storm Procurement has been supplying the Newmont Ghana operation for 7yrs. In order to meet requirements, Newmont looked to Storm to leverage on their experience, technology and resource pool to provide a streamlined network through supply chain outfitted with automated advanced systems, international sourcing through strategically placed offices and warehouses facilities. This would allow the Newmont to focus its services and add enhancements to the supply chain as required
Results
Increased order accuracy rate
Boosted on-time delivery performance
Enhanced visibility through-out the supply chain
Improved customer satisfaction
Added flexibility to operations
Provided technology solutions to supply chain
Reduced overall costs and applied savings
Conclusion
With Storm Procurement applying and constantly reviewing its transactional model coupled with continual development allows Newmont to adapt their cost reduction measures and meet the challenges outlined in 2011. Cost savings in year one was meet ($3m) and year two achieved a higher rate due to technology inclusion
Contract Extension
Due to the successful completion of the outsourced transactional model with Storm. Newmont has extended for an additional 12month period
