Inventory strategy for mining operations
Inventory strategy defines how an organisation balances reliability, risk and working capital. In short: where to hold stock, and where to take risk.
The challenge
For mines, working capital must translate into asset availability, which depends on consumables and spares being available for maintenance, breakdowns and processes. Everything else consumed on the mine, for projects and repairs, must also be managed.
What is required
Criticality classification that can be applied consistently
Basic categories such as generally procurable, maintenance spares and plant consumables
An understanding of what target service levels mean and how to measure them
Manageable groups, for example, expensive critical spares and inexpensive critical spares
The ability to change service levels per group and project the working capital requirement
The strategy groups inventory by risk profile, cost, supply risk, criticality, source of demand, forecastability, demand profile and alternatives. Each group has its own tasks and routines.
Effective approaches to technical problems such as forecasting and setting levels per demand profile, together with support for the processes that maintain planning parameters. KPIs show whether processes are followed and whether they deliver the planned results.