supply chain key processes - codelco · 2018-05-02 · jaime bustos c. strategic sourcing director...
TRANSCRIPT
Jaime Bustos C.Strategic Sourcing Director – Mining processes
Expomin 2018
May 2018
Supply Chain key processes - Codelco
Productivity as a key success factor
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
AGENDA
Overview
Productivity roadmap
SRM roadmap
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
Surface 800.000 km2
Bordering countries Peru, Bolivia and Argentina
Population 17,95 millions
Density 21,9 inhab/km2
GDP per capita US$ 24.000e
Inflation 2,7%
Main Exports Cooper, cellulose, sea products, Wine
Human development index
38
Language Spanish
Governmentsystem
Presidential
Life expectancy 80,5 years
3|
CHILE
*Last data available
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.4|
27%
73%
20%
80%
34%66%
Others
MOLYBDENUM | N°2
NATURAL NITRATES
LITHIUM** | N°2
Others
Others
COOPER | N°1
Source: Cochilco, USGS and WBMS.*2016 preliminary data**Excludes USA poduction
100%
| N°1
CHILEAN MINING INDUSTRY
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.5|
MILESTONES & PRODUCTIVE INFRASTRUCTURE
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.6|
STAFFING & CORPORATE
GOVERNANCE
Board of Directors
3 directors appointed by the President of the Republic
2 Codelco employee representatives, elected by the President ofthe Republic
4 members appointed by the President of the Republic, fromcandidates proposed by the Senior Public Management Council
Chief Executive Officer
Own 18,605
External 47,098
Company staff
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
BUSINESS & DEVELOPMENT PLAN
Capture potential value from huge resources and reserves.
Access to the best market conditions.
Ensure financial flows to the State of Chile.
Others project in BDP 2016: Ministro Hales Underground, “La Huifa” (El Teniente) and North Resources (El Teniente)
0
500
1.000
1.500
2.000
Fin
e co
pp
erp
rod
uct
ion
(to
nn
ex
10
00
)
DEVELOPMENT PLAN (BDP)
BASE CASE(WITHOUT PROJECTS)
Chuquicamata Underground
El Teniente New Mine Level
Salvador Inca Open Pit
Andina Future Development
RT Sulphides
Other projects
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
AGENDA
Overview
Productivity roadmap
SRM roadmap
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.9|
KEYS FOR THE FUTURE
1. Continue focused on balance sheet strength.
2. Operating cost control program with focus on operational excellence and increasing productivity through all operating units.
3. Development of strong mining plans with a district business view.
4. Carry on with revised capital investment program to reduce risk and maximize value extraction from our world-class resource base.
5. Strong research & development commitment, with focus on solving productivity challenges.
6. Long-term program in place to convert Codelco into a benchmark in sustainable production of copper.
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
PRODUCTIVITY ROADMAP
GOALS
10 10
43,0
46,6
48,549,3
50,851,2 51,6
2014 2015 2016 2017 2018 2019 2020
0,0
0,5
1,0
1,3
1,6
1,9
2,1
2014 2015 2016 2017 2018 2019 2020
+20%
2017Budget
tCuf/FTE USDbn
Productivity Goals1 Cost savings Goals2
+13%2017
Budget
USD 2.1bn(1) Includes production and FTE of mining divisions, smelters and refineries.(2) Cost savings measured against 2016 Business Plan, except year 2015 which is compared against its Budget
Fuente: Abastecimiento Codelco
2019-20Permanent practices
2017-18Specific initiatives
2016Kick off
Productivity program startup. First initiatives deployed.
Specific changes implementation in our processes.
Productivity settlement like permanent practice.
Three step roadmap for productivity improvement: +20% to 2020.
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
PRODUCTIVITY ROADMAP
RESULTS
11
1.338
1.650
1.933
2.187
547
980
2015 2016 2017 2018 2019 2020
Productivity 1
tCuf/FTE
Annual Cost Savings 2
MMUSD
433
358
312
283
254
REALPLAN
46,6
48,5
50,7 50,851,2
51,6
51,2
43
44
45
46
47
48
49
50
51
52
53
2014 2015 2016 2017 2018 2019 2020
+ 19%
+ 20%
Savings per year obtained each year
compared to budget
Savings per year based on 2018 business plan
+20%
Fuente: Abastecimiento Codelco
2019-20Permanent practices
2017-18Specific initiatives
2016Kick off
(1) Includes production and FTE of mining divisions, smelters and refineries.(2) Cost savings measured against 2016 Business Plan, except year 2015 which is compared against its Budget
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
Strategic Axis Initiatives 2017 – 2020:78 of Operation Units y 21 Corporate (examples)
Proactive maintenance development
E1
• Maintenance System• Models MARC/LPP analisys
High performance outsourced services
Best practices and synergies
Operational excellence“Lean Management”
Assets management
Innovation and applied technologies
E2
E3
E5
E6
E7
• KPI improvement – technical limits challenge• C+ Lean Management in Codelco
• Continuous improvement model of synergies and best practices transfer
• North District’s extraction model• Smelter and refinery model
Low Cost procurementE4$ $ $• Alternative Markets development and consolidation• Category Management Implementation
E8 Working Capital$
• Productivity Model implementation• Standardization of accreditation process
• Innovation Roadmap (Big Data – remotization)• CodelcoTech
• Warehouse management• Inventory management
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PRODUCTIVITY ROADMAP
Company Level
sup
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ain
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nsf
orm
atio
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rogr
am
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
AGENDA
Overview
Productivity roadmap
SRM roadmap
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
AGENDA
Overview
Productivity roadmap
SRM roadmap
- Focus on Business Sustainability
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
(1) Data: 2017.2% of foreign services: Shipping agent; Quality control; Engineering Services.
98%
SUPPLY CHAIN IN NUMBERS
Sources of services
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
(1) Data for 2013 until April 31 2017.
22%
18%
20%
7%
6%
3%
8%
14% remaining
2%
SUPPLY CHAIN IN NUMBERS
Sources of goods – by seller
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
(1) Data for 2013 until April 31 2017.14% remaining
34%
23%
13%
4%
3%
2%
4%
3%
SUPPLY CHAIN IN NUMBERS
Sources of goods – by origin
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
SUPPLY CHAIN IN NUMBERS
Year 2017
18
US$ 4.828 millionsthrough Supply Chain Organization
3.600 live Contracts to manage
Sole Source business decreasing from
1,9% (2016) to 1,1% (2017)US$ 3.604 millions
in Services
US$ 1.224 millionsin Goods
92.000 PO submitted
with 2.280 suppliers
~8.000 registered suppliers
4.743 active suppliers
Offer of goods and services
Sop
his
tica
tio
n
1063
4743
Codelco’s Approach IDENTIFY SELECT DEVELOP OPTIMIZE
insufficient Supplier Qualification
Active suppliersregistered in
different categoriescontaining
Complexity:
58 suppliers represent
50% of total spend
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.19
DIMENSIONS CLASIFICATION
SCORE SEGMENTATION
S1
S2
S3
S4
AAAA – AAAB – AABA
AAXX – BBXX – ABXX BAXX
AXXX – BXXX - CXXX
DXXX and other variations
Top Suppliers
Good Suppliers
Average Suppliers
Poor Suppliers
Organizational Size
Financial indicators HSEC*
Human Resources& values
Innovation & TechnologyDevelopment
D1Operational
Sustainability
D3 D4
D5 D6
D2LetterScoreRange
B2,50 – 3,75
C1,25 – 2,50
D1,00 – 1,25
A3,75 – 5,00
Dimension Max. Min. Examples:
A A A AA A B CA B A A...
D3 A B C D
D4 A B C D
D1 D2 A B C D
D5 D6 A B C D
D3 D4 D2 D6
D1 D5
Criteria
33 criteria were grouped in 6 dimensions with a score ranging from 1 to 5
BUSINESS SUSTAINABILITY
Managing disseminated spend
IDENTIFY
* Health, Security, Environment and Community
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
Zones of weaknesses
SELECT
BUSINESS SUSTAINABILITY
Managing disseminated spend - Gaps
Based on current Segment and Score, it is possible to identify potential suppliers and their gaps
Codelco has an overall view of supplier base score through the obtained information
Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.21
DEVELOP OPTIMIZE
BUSINESS SUSTAINABILITY
Managing disseminated spend - Options
Direct Support Closing gaps through Codelco
support
Indirect Support Compensating Gaps through
associativity actions between suppliers
Collaboration
Options to close gaps
1 2
Sop
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Sop
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Sop
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Copyrights © 2017 Codelco Chile. Todos los Derechos Reservados. | Copyrights © 2017 by Codelco Chile All Rights Reserved.
• Manage supplier segmentation, and provide support to improve quality and sustainable results.
• Manage supplier segmentation, and promote associativity to improve market robustness.
• Continue challenging the market to obtain efficiency, effectiveness and low costs.
22
NEXT STEPS
2018-2020
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