Managing explosives supply contracts with specialist knowledge of the subject matter is as important (or more) than the functional contract management skills that are also required. Both tangible and intangible benefits come from the way that the explosives supply is implemented and whilst it may be guided by a legally binding (and lengthy!) supply contract, the technical and operational nuts and bolts are unlikely to be precisely defined.
The following are some of the areas to consider so you can deliver real value from your explosives contract:
Understand the Market – Deep knowledge of the market provides the necessary and updated information you need to identify risks and spot new opportunities so that you can work to address them either with your supplier or independently. Overlooking this can result in sub-par performance as there is no push to improve existing approaches and techniques or to adapt to mitigate risks. In addition, some contracts have clauses that relate to the market, so in order to hold your supplier accountable, you must be familiar with the underlying mechanisms
Technology & Innovation – Understanding relevant technological innovations that become available and how they relate to your operations, together with any new products, allows you to work with your supplier to identify the correct mix of products and services now as well as what needs to be developed to drive future value
Implementing the Contract – Intangible benefits are gained by high levels of communication and positive relationships with key supplier personnel. Ensure a timeline and plan are in place and review them regularly with your supplier. When you work this, ensure you go into the detail, particularly with critical path items such as personnel, licensing, equipment, procedures and inductions on a site-specific level because these can stop progress very quickly. Seek ongoing feedback from your supplier as to the issues and opportunities that they see and be open to address these where it makes sense
KPI’s – Essential to the success of the contract is how KPIs are managed on a daily basis. KPI’s can be a good tool if used correctly and not just listed as an after-thought in a contract that aspires to be ‘best practice’. Even with substandard (or no) KPI’s in an existing contract, you can still work with your supplier to deliver value that is beneficial for both parties
Fixed & Mobile Equipment – This was likely specified during the tender process and in the contract that followed, so make sure that what the supplier delivers throughout the contract is in line with this and will perform the necessary tasks. How will it be maintained? And is it an efficient piece of equipment? Does it comply with your company’s safety requirements? How many people does it take to operate it? Do alternative approaches exist that would allow you to use less equipment and still achieve the same operational outcomes?
New Products – Is your supplier innovating and offering new products that they believe will benefit you? Always explore their offerings and look at how other sites with different suppliers manage similar situations. Don’t forget that new products may cost more but may deliver larger benefits. What will you need to do internally to ensure approval? Have you fully understood the value proposition for your mine and are the correct mechanisms in place to guarantee a tangible outcome
Relationships – It’s hard to do business with someone that you don’t get along with. Actual benefits will come from both parties being committed to deliver what is required by the site. Developing a strong relationship built on trust and recognizing the mutual benefit is the best way to ensure initiatives are always being developed and projects are being delivered. If it’s an interesting project that benefits both parties, chances are it will get done
Positioning yourself for the next tender – Driving the performance of your supplier is only possible when there are legitimate and viable alternatives for supply, and healthy competition for the products and services being delivered. By developing this competition during the term of the contract (by being in constant contact with other suppliers and possibly testing their products and services) you can position yourself to ensure there is a very competitive tender process and you do not become beholden to an incumbent supplier
Developing real value from your explosives supply contract is about much more than just the headline cost of the products and services… it’s about how those products and services are combined and applied to particular sites to deliver the best possible outcome in line with your objectives as a customer. This requires a combination of a lot of different skill sets which you may not have internally on either the functional/procurement/contract management side, or at site level
Moncourt Group works with miners to deliver value in the purchase, supply and use of AN and explosives by providing subject matter expertise and market intelligence.
We remain fully independent from the actual supply of products and associated services so that we have no conflict when recommending and implementing improvements for our clients. Our experience has led us to achieve significant savings, develop options to increase the security of supply, and deliver value from explosives supply contracts, for our clients.