Partnerships with suppliers

"IntroductionThe Canadian mining industry is under immense pressure to compete with foreign mine operations. The very survival of the Canadian mining industry is threatened by lower ore grades, environmental pressures, high cost of labour, unfriendly tax laws toward exploration and the increasing cost of new technology. In order to compete in the world market, Canadian producers and their suppliers are rethinking age old customer-supplier relationships in favour of preferred supplier relationships which can improve the profitability and enhance the competitive position of both partners.This paper attempts to redefine partnerships with suppliers in the context of a ""win-win"" objective. It will outline the measurable benefits to both partners through a representative product which highlights the keynote structure of any successful supplier partnership The Status Quo...Mines all over North America are plagued with the same recurring questions, ""Who has the best product for my operation at the lowest price... How do we know a product will perform to a supplier's projections after the sale...What do we do if the product fails to perform as expected?"" These questions have been asked by underground mining operators for decades but rarely have long-term solutions with measurable results been achieved.The LHD industry is one example of the status quo where partnerships will provide large gains toward technological advancement, reducing mobile equipment costs. The underground mining industry is out of sync with their surface counterparts in the open pit business.Partnerships with suppliers in the open pit world are not only a standard practice but a culture which has existed for decades. Open pit operators enjoy concepts which fix their mobile equipment costs for the life of the mine and hold the equipment supplier accountable for performance and fleet economics for 60 000 service hours and longer.Manufacturers are attempting to transfer this culture into the underground mining industry. Figure I illustrates the significance of a capital driven decision."