Winter is coming and I can’t find my insurance spares!!
Coming from a precision manufacturing organization, I had a bit of a culture shock entering the mining/oil & gas business over ten years ago to see the lack of maturity for the care and storage of assets critical to the running and optimization of a mining site.
I’m pretty sure my passion for warehouse management excellence may seem a little bit extreme, but I spent many a cold day digging through the snow looking for key components to justify my passion.
I would like to share my views as to why I believe in the importance of warehouse management and how it can become a major contributor to mining/oil & gas optimization.
It is extremely important to have a warehouse management strategy. It does not take long to feel the impact of not having one at the mine site.
- The long-range plan should be understood, including site expansion or contraction.
- The warehouse strategy needs to be in alignment with the inventory management strategy.
- The needs to be an understanding of the complete supply chain of key components and commodities in building this strategy.
Dedicated Warehouse Space
At the EPCM stage, the warehouse space is the last item to be accounted for, it is also the first thing to be cut with timeline and budget constraints – resist!!
- If you’re a supply chain manager who is lucky enough to get adequate space and have the ability to manage the space properly – “Protect your Space”.
- Warehouse space becomes more valuable as the mine site matures and legacy inventory starts to build.
Warehouse Systems (ERP)
Selection of ERP systems is usually made based on the finance capabilities of the ERP systems. Be sure that basic warehouse functionality is available in your ERP selections such as cycle counting, multiple storage types and movement reports.
A mentor CFO told me many years ago that “Inventory is Cash”. If inventory is cash then “the warehouse is the bank”. Banks have procedures and policies for managing money. The staff is educated and trained in managing the cash. Build the same governance for your warehouse.
If you don’t have proper procedures and policies for material issues, put away and receiving, your warehouse integrity will be at risk.
Clear indicators that warehouse governance is lacking are the following:
- Operations and maintenance will physically check “on-hand” before beginning a work order
- Squirrel stores
- Below 80% 1st count accuracy.
Supply chain is constantly evolving, therefore your warehouse strategies need to evolve with it. Your supplier’s logistics network changes how this could impact what and where you store commodities and components. Warehouse movement reporting will help you adjust and bring the materials and components closer to point of use.