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Mine Maintenance Inventory

NEEDS-BASED RESULTS

 

Mine Maintenance Inventory

SITUATION

North American copper mine’s Maintenance Inventory has steadily grown over the past five years to in excess of $100 million.

DRIVER GOAL

  • Reduce Maintenance Inventory (active parts) by $9 million with improvements in service levels by year end.

RESULT

  • Improved service delivery metric DIFOT through reduction of stock out inventory of $1.5 - $2 million.
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Case Study

Optimize Inventory for a North American Copper Mine

Issue

A North American copper mine’s Maintenance Inventory has steadily grown over the past five years to in excess of $100 million. Three years ago the Procurement organization was charged with establishing a regional warehouse to better service the Mine, Concentrator, Smelter, Refinery, and Power Plant and better control moving inventory. The corporate goal for 2009 was to reduce inventory by $10 million; however, inventory continued to grow. Moving inventory accounts for less than 30% of the total on hand inventory. The vast majority is comprised of non-moving and insurance spares inventory. Leadership engaged The Highland Group to help define what the correct level of inventory should be for the business and what level of control was required to attain the correct level of inventory.

Highland Approach

Standard operating processes and procedures were developed to create changes in Inventory Controllers roles and responsibilities. The changes resulted in optimized inventory levels with a corresponding $1.9 million reduction by mid-year and $9 million by year end. The project included the development and delivery of scorecards and dashboards to monitor and track the improvements.

 Actions Taken

The Highland Group partnered with the client team to develop and implement a strategic program to have the Procurement organization manage active inventory, including:

  • Agreeing on inventory rules;
  • Targeting high-value and high-use items;
  • Ensuring risks are managed through contingency plans;
  • Improving service levels;
  • Optimizing inventory levels.

The team also implemented a System For Managing Maintenance Inventory that includes new tools and scorecards to monitor and sustain the process.

Reduced inventory by over

$9m

by implementing a System for Managing in Maintenance

The consultants listened, and their knowledge contributed to direction and opportunity. Once scoped, the team performed excellently.

Regional Director, Service Delivery Americas West

Related Information

industry-based

subject matter-based

Head of Organizational Development

Don is an internationally recognized organizational change and development expert with 33 years of global experience in partnering with results-oriented clients to achieve sustainable behavioral change and targeted bottom-line results in productivity, quality and profitability. He is recognized for fostering high levels of enterprise-wide sustainable performance improvement ownership. Don’s key strengths include his ability to engage stakeholders at all levels, create collaborative environments and work within the culture to achieve leadership, management and employee breakthrough results.

Project Director

Working Capital

Hamid has over 20 years of experience as a management consultant. He has a wealth of experience in process and operational improvements, corporate strategic planning, development and deployment, global sourcing, supply chain management as well as working capital improvement experience (A/R, A/P, Contract & Vendor Management, Inventory, MRO/Materials & Supplies).

Project Director

Mining

Sean is an executive with more than 17 years of experience in operational management, process improvement, cost reduction, revenue enhancement and consulting in multiple industries, including mining. He has participated in several operational engagements in the mining sector worldwide.

Director of Operations

Mining & Metals

Collin is a senior operations executive with 24 years of experience, including Mining & Metals performance improvement projects that convert strategic intent into deliverable actions. An enthusiastic team leader and player who believes in consensus building and participative decision-making, Collin’s recent work has spanned the United States, Canada, Mexico, Brazil, Colombia, Chile, Jamaica, Indonesia, Madagascar, North Africa, West Africa and South Africa.

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