Page 67 - pd297-Sept21-mag-web

Supply security key

to project success

he Australian resources industry may
Thave been largely sheltered from the
debilitating effects of the global pandemic
but the ongoing disruption to global supply
chains looms as a threat to the sector.
The impact is already being felt with vital
equipment and goods in short supply as
international service providers find them-
selves in and out of lockdowns and strug-
gling to cope with the distractions of the
virus.
Axis Group International chief executive
Kobus van der Wath senses the resource
sector may have to adjust its approach to
global procurement and supply chain man-
agement if it is to navigate a path through
the unfolding crisis. adapt processes and unlock significant While quality, cost and timelines are cru-
“We seem to have left the worst of COVID value earlier.” cial yardsticks in a successful global supply
behind us, but we still expect supply disrup- “The standard when thinking of a typical chain strategy, van der Wath points to the
tions and shocks along the way,” he told EPC cycle is to think the E comes early, the increasing importance of another element
Paydirt. “Clients are beginning to realise P comes in the middle and the C comes – ESG.
the importance of supplier health and sup- at the end; however, if you move the P up The rise of battery minerals-focused Aus-
ply chain visibility as some existing suppliers and understand the supply options early, it tralian companies – both domestic but also
have failed to make it through the economic will drive more value in the overall project. in Africa and Latin America – has brought
crisis or are locked down and struggling to You can make all the strategic planning and supply chain integrity into sharp focus. End-
meet demand. We are seeing this play out long-lead decisions with confidence. Often, users such as Tesla, Volkswagen and Ford
across several product categories where projects are designed with the assumption are determined to enforce strict adherence
there are stock and raw materials short- that all suppliers will come from one country to ESG principles from their suppliers and
ages, delays, significant shipping cost in- – the easy option – but, if you do that, you even their suppliers’ suppliers. For miners,
creases and acute container shortage.” are cutting out a big chunk of the global sup- transparency in supply chains will be of in-
Axis Group has been providing global ply market. Opening up to that global mar- creasing importance in the coming decade.
procurement and supply solutions to the ket allows you the opportunity to drive value “We do a lot of supply chain auditing and
mining industry for 20 years but van der and reduce capex and opex.” mapping around ESG to understand if sup-
Wath is still concerned by the lack of aware- Van der Wath admitted there was still pliers are safe, appropriate and whether
ness he sees in the sector’s approach to scepticism among Australian miners to they could be optimised,” van der Wath said.
supply chain management. opening up to global supply chains due to Modern slavery in global supply chains
“Mines are generally located in remote long-held misconceptions about quality. is one area Axis Group has particularly fo-
areas with no manufacturing capability “It is one of the biggest resistance factors cused on, having worked successfully with
close by so supply chains are necessarily that we have to overcome,” he said. “Peo- many international companies to ensure
complex and easily stressed,” he said. “The ple remember the anecdotes from 20 years compliance in their supply chains
more astute industry leaders recognise this, ago about the quality of work from overseas. “In many jurisdictions, modern slavery
but it is not always the case. If you look at That may have been true then, but it is not isn’t a big focus but, no matter where you
other industries, they often have state-of- true forever.” are based, mining companies are morally
the-art supply chains which drive significant With robust processes, a database of and legally compelled to comply with inter-
value through efficiency, speed and profes- more than 10,000 international firms and national standards so they must be confi-
sionalism but in some cases resource play- capable teams across supply markets, Axis dent their suppliers are also complying,” van
ers are not configured like that.” Group is confident of matching miners with der Wath said.
Attitudes may be changing, however, suppliers who can achieve the necessary Without an effective ESG supply chain
with Axis Group finding mining clients are quality and cost requirements. strategy, miners will inevitably encounter
increasingly willing to consider procurement “We have pre-qualified more than 2,000 additional risks and costs. The same is true
and supply chain management much earlier of those firms and have procured from sev- for all aspects of supply chain management.
in the development stage. eral hundreds of them,” van der Wath said. Without due consideration for all elements,
“Companies are beginning to come to us “So, we can show you the best manufactur- what looks like cost-saving measures will
earlier in the process,” van der Wath said. ers in the world for your requirements and only create headaches in the longer term.
“You can’t produce a front-end engineering manage supplier engagement in a disci- “I don’t like the word cheap because it
design process and give it to an internation- plined manner.” never works out to be cheaper,” van der
al supplier at the last minute, because they’ll Axis Group’s expertise extends beyond Wath said. “It is about reducing costs to an
have different technical standards, different simple supplier discovery. Supplier audits, appropriate level while maintaining quality,
protocols, and even different cultural expec- performance evaluations and building long- timelines and managing risk – and, impor-
tations. By engaging early, you can appre- term relationships are crucial parts of the tantly, ensuring that ESG goals are met.”
ciate the differences, anticipate problems, company’s engagement process.

aUSTRaLIa’S PaYDIRT SePTeMBeR 2021 Page 67