In this column, Aldo Barreto—Founding Partner & Co-CEO of Unilink—reflects on the invisible operating costs generated by spot purchases in mining, and how these exceptions take up critical time for procurement teams.
With more than 13 years leading Unilink and a previous career spanning 11 years at SAP Ariba and Quadrem, Aldo brings an expert perspective on the daily friction caused by exceptions outside the planned flow and their cumulative impact on operational efficiency.
In previous posts, we saw that even in well-planned operations, there are always situations in which the normal supply flow is insufficient. When a material is not available in the warehouse or the usual supplier cannot respond, the requirement must be met directly in the market.
These situations are part of everyday mining operations.
The problem is not its existence.
The problem is how they are managed.
When a request deviates from the normal flow, the operational workload increases significantly.
The supply team must:
Often, all of this occurs under operational pressure and with limited information about the available market.
From a monetary standpoint, these purchases are usually of low value.
But managing it consumes:
In many operations, the administrative cost and time spent resolving the exception can be comparable—or even greater—than the value of the material purchased.
Furthermore, this type of situation introduces:
The challenge of spot sourcing is not the amount of purchases.
It's in the operational friction they generate.
Each exception implies:
In organizations with multiple operations, this friction is repeated every day.
And it ends up taking up a significant portion of the teams' time on low-value operational tasks.
Exceptions are not isolated events.
They are a permanent component of supply in complex operations.
Therefore, the challenge is not just to resolve each case.
The challenge is to reduce the operational effort involved in managing them.
Because in mining, improving supply does not always mean optimizing the main flow.
Often, the greatest impact is in reducing the burden generated by exceptions.
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