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Mining Working Capital

NEEDS-BASED RESULTS

 

Mining Working Capital

SITUATION

At an Australian mining company, trends in contract spend and working capital deployment were moving in the wrong direction.

DRIVER GOAL

  • Reduce working capital and contract spend.

RESULT

  • Released $10.8 million cash in Accounts Payable.
  • Released $4.1 million cash in Material & Supplies.
  • Released $9.1 million cash in Vendor & Contract Management.
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Case Study

Improve Contract Management & Working Capital at an Australian Mining Company

Issue

At an Australian mining company, trends in contract spend and working capital deployment were moving in the wrong direction. The company engaged The Highland Group to help reverse this trend and put in place business practices that would allow it to sustain the improvements over time.

Highland Approach

After a three-week, detailed analysis, the team identified three primary areas on which to focus process improvement and working capital reduction efforts: Accounts Payable, Contract & Vendor Management and Material & Supplies (MRO).

Actions Taken

Accounts Payable:

  • Developed and enforced standard Terms & Conditions.
  • Implemented changes in payment cycle frequency with specific exceptions.

Contract & Vendor Management:

  • Identified and prioritized spend.
  • Conducted negotiations across key areas, including labor as well as open-cut operations, consumables and logistics.

Material & Supplies (MRO):

  • Developed and deployed new processes for vendor and information/data management.
  • Implemented a slow moving and obsolete (SLOB) program.
  • Negotiated Forward Purchase Agreements.

 

Original targets were successfully attained within only 26 weeks and the knowledge and skills required to sustain improvements was transferred to the company. At the end of the project, initial goals were surpassed by 70%.

Delivered working capital improvement of

$24m

by implementing sustainable process changes in three areas

… you are the first group of consultants I have worked with that have delivered on their promises in a sustainable way – I have a strong sense the savings will not disappear in six months. You have given our people the skills to maintain the savings.

General Manager

Related Information

industry-based

subject matter-based

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.

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.

Senior Consultant

Working Capital

North America

Joe is an innovative and versatile professional with over 25 years of solid experience building, growing and operating diverse, multi-faceted and geographically dispersed global high-growth organizations. He has an exceptional track record of managing projects that deliver credible and sustainable improvements in cash management, operations, service quality and cost.

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