RELATIONSHIPS BETWEEN MINING COMPANIES AND THEIR SUPPLIERS ARE STILL NOT THE BEST
Stated by Jorge Pancorvo, Chairman of the Logistics Meeting of PERUMIN 33 Mining Convention
The logistical professional is on the road towards becoming an important stakeholder in the decision-making process of any mining company. Therefore, he is expected to have a higher strategical performance within the organization and with their suppliers. The Logistics Meeting of PERUMIN 33 will address this and other topics, so we spoke with its Chairman, Jorge Pancorvo Corcuera.
The purpose of PERUMIN Mining Convention is to reinforce the competitiveness and the sustainability of both, the mining industry and the country. Therefore, we are searching for a way for mining companies, suppliers, contractors and logistics operators to work in a more symbiotic manner to reduce costs, to have a higher efficiency, productivity and innovation supported in logistics affairs. Our organizing committee aims at providing appealing topics to be analyzed and to be discussed, in such a way that are effective contribution for the logistics professionals.
A relevant topic is to provide the stakeholders with higher permeability and cooperative negotiation to attempt a business relation that could be mutually beneficial. Also, the importance of the joint work among the business areas to duly anticipate requirements, and thus, to plan better. Another topic is how technology and tools related to information management facilitate changes in management and ways of working. However, in this occasion, we will set aside infrastructure topics because they have been addressed in prior editions.
The role of the logistic manager in the development of the mining company will be a topic of reflection and discussion; this professional comfortably handles a 75% of the budget; however, despite handling a so important economic aspect that is not necessarily well placed within the structure of the company or intervene so little in structural decisions. In Peru, unless some exceptions, in most of the cases, the logistic manager is at the third layer of the directive structure. So, his role must be reassessed.
It is a matter of culture, inheritance. I am not a miner, I am a professor in a business school, seven editions back they invited me to take part of PERUMIN and one of the lessons was that the miner is dearly attached to his ways and customs. If he needs something, he will have it catered. The logistic manager is a link, a meddler between the supplier and the user, and he simply responds as best as possible. Nowadays, the logistic manager goes far beyond than a “middleman” and he becomes a negotiator that looks for new opportunities and initiatives that will help the user to have what he needs in time, bidding for a better price, a better service, without unfairly harming the supplier.What do you mean with not harming the supplier?
Well, since the commodities international prices drop, suppliers have been mostly cornered. And this is a zero-sum game: one at expense of the other. What we want in this Logistics Meeting is both to win to maintain a sustainable relationship.What would this edition offer regarding innovation?
This is, indeed, another main topic of the meeting. We will focus on disruptive technologies. How do automation, big data, communication and Internet, among others, are radically changing the way of working in the logistic sector?
And, a novelty is that we will carry out a study on logistics in the Peruvian mining industry. The Peruvian Institute of Mining Engineers has signed an agreement with Semana Economica and Ipsos Peru to develop a survey aimed at three sectors such as: big, medium and small mining, as well as suppliers, contractors and logistic operators. What we want is to rely on a baseline that will help us to know our reality, expectations and gaps we face better. We will share the results during the Meeting.
First, we must understand that a cluster is a geographical space that facilitates the concentration of activities and stakeholders intertwined providing a series of converging advantages. For example, in Callejón de Huaylas and Conchucos, what are the logistic activities that could be candidates? We could even have sub clusters, but this possibility will be subjected to the justification of the demand from mining companies. We have discussed about it and its advantages, but nothing has been made. It is a matter of decision and someone must act as the “leading company”. A cluster does not mean that the stakeholders need unified strategies or a common agenda but to know how to complement each other.A logistic cluster in Arequipa could be created to benefit mining companies in the South.
Why not? We need to see with which activities economies of scale advantages would be achieved, specialization networks and suitable geographical concentration. A cluster is a collective that respects the fact that “each has to solve their own problems”. But, we do not expect the government to take the lead. I have heard that the Government should decisively participate but that is considered as a mistake. They should contribute with the legal standards to promote and facilitate these economies of agglomeration.
A problematic component for the mining sector to reduce costs is the transport towards ports, their main point of export. What solutions have been given to that respect?
Limited. The most expensive mean of transportation is by land, the most efficient is a duct as Antamina’s, or by train, in other words, in bulk. However, there are many examples of ore hauling by trucks in the country.How are the relationships between mining companies and their suppliers?
They could be much better. Both are needed. I will give you an example: if the mining company needs a specific good looking the best attribute of price and service; who knows best about the request, the mining company or the supplier?It might be the supplier.
Indeed. Let’s acknowledge an asymmetry of knowledge. The “know-how and know why” is higher in the supplier than in the mining company. Let’s remember the saying: “Shoemaker, to your shoes” Also the companies use the stick traditional scheme to low the prices. So, if we do not promote more creative, intelligent and transparent manners to sit and talk about it and to face challenges, definitively we are not moving forward. Bridges are not being built.
For example, if the mining company informs the supplier what will need in the next twelve months, better sources of supply or lower freights could be attained. Besides, it allows the supplier to bid for more attractive solutions, with better costs, suitable service and to create reasonable margins. During this Logistics Meeting we will also discuss about cooperative negotiations.
Of course, We have a block of lectures called Trust Networks and Cooperative Negotiation, that is a concept that has been developing during the last years in companies that aime at growing and being competitive, acknowledging the relevance of the stakeholders that participate in its chain of business. Instead of acting on thinking in the short-term, the parties sit to discuss and negotiate also considering its impact in a broader horizon. And these are relationships that are fed and developed in the long term.To finish, what is the importance of PERUMIN 33 Mining Convention?
It is already an international mega event acknowledged worldwide. It is an opportunity for dialogue, agreement and ideas exchange where effective proposals are looked for the main problems of the industry. PERUMIN represents a parenthesis and the opportunity of having the tranquility of establishing relationships and contacts, to participate in what someone is interested in. To celebrate this event in Arequipa differentiates it from other similar events. It allows an almost unique surrounding.
Lima, January 17, 2017.
Phone: (511) 313.4160 Ext.: 377, 394
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