Background information of the chosen company
Discuss about the Supply Chain Management Of Newcrest Mining Limited.
The discourse of the study aims to develop a vivid understanding of the logistics and supply chain activities for “Newcrest Mining Limited”. The background information of the company will include the discussion of its business nature, type of products, major customers, number of employees, management style, organizational structure, financial position and types of facilities. The next section of the study will include the supply-chain structure for “Newcrest Mining Limited” which will be able to demonstrate the map for its distribution chain. The third section of the discourse will include discussion on the sourcing materials, services and producing goods. The subsections will comprise of the discussion on the existing system and suggest improvement at the same time. The various types of demonic management and inventory management system will evaluate the existing inventory system involved and suggest improvement accordingly.
Discussing the nature of business
Newcrest headquartered in Melbourne considered as the largest gold producer which is listed on the: Australian Securities Exchange” and one of the “world’s largest gold mining companies”. The main mission of the company to deliver superior returns from findings, operations and developing of gold/copper mines. The company owns its portfolio of predominantly low-cost, long life mines along with a strong pipeline of “brownfield and greenfield exploration projects”. The reserve and the resources are considerably strong with more than 25 years of production experience at current rates. The asset portfolio of the company uses a variety of efficient method of mining for the large ore bodies, selected together with various types of underground mining methods for optimizing of high-grade epithermal deposits. The mines are mostly located in “Australia, Papua New Guinea (PNG), Indonesia, and Côte d’Ivoire”. The present operations of the company include “Cadia Valley Operations (New South Wales, Australia)”, “Telfer (Western Australia)”, “Gosowong (Halmahera Island, Indonesia)”, “Lihir (New Ireland Province, PNG)” and “Bonikro (Côte d’Ivoire)”. The discovery of the new ore bodies is identified as the most significant aspect of Newcrest’s strategy. In addition to this, the company has been successful in maintaining a strong and successful exploration track record. The key objective of the exploration strategy includes, securing large mineral districts/provinces for establishing the scope for future operations and enhancing the future discoveries.
The company’s main produce includes gold and copper in Australia situated at the “Ridgeway (Cadia Valley Operations)”. It has been further discerned that the second most important Australia operation is considered with “Telfer Mine in the Pilbara region of Western Australia”. Some of the other production zones include two mines situated in “Papua New Guinea, Lihir and Hidden Valley” and one each in “Ivory Coast (Bonikro) and Indonesia (Gosowong)”. Based on the financial statement published in 2017, the total mine production is depicted to be 18853 thousand tonnes in Cadia, Located in central west “New South Wales, Australia”. Some of the other significant quantities of production is observed with Lihir Located on the island of Niolam with a total mine production of 30069 thousand tonnes. Furthermore, Telfer gold-copper mine located in the “Great Sandy Desert in Western Australia” has a total mine production of 34144 thousand tonnes.
Types of product
The main revenue from the contracts is depicted to be arising from contracts with the customers. The main customers of the company have been identified with major companies require copper for construction works. In addition to this, the electronics making companies in Australia such as ASKO, Electrolux and Fisher & Paykel how considered are some of the most significant customers of Newcrest. Some the various types of other customer profile include Australia Pacific electric cables. In addition to this some of the other cable companies such as Bambach Wires & Cables, Tycab Australia, NAN cables and Nexans Olex are some of the most significant customers of Newcrest for buying copper and refurbishing it to their cables. Customers of gold production is recognized with companies such as Shiels Jewellers, Michael Hill Colonnades, Tiffany & Co., Zamels Jewellery Australia and Wallace Bishop Jewellers (Newcrest.com.au, 2018).
As per the report published by Forbes Global 2000 List Newcrest Mining Limited is recognized with a total market capital of $ 14 Billion and an employee strength of 1,544 employees. It has been discerned that during the financial year 2017 Newcrest introduced new “Healthy Living program at Lihir designed to help Lihir’s 4,500 strong workforce take charge of their personal health, with more than 3,400 of the workforce already receiving a personal health consultation”. The main intention of launching the program was to make aware of the existing employees about the importance of Healthy Living program. The main standards incorporated by the company has encouraged diversity and included addressing specific barriers to the employees. The flexible work practices standards have allowed the employees to adopt flexible working practices for supporting a wide variety of professional and personal circumstances. Moreover, the work place behavior standard always looks forward to ensure that the workplace is free from “discrimination, harassment, bullying and victimization”. This allows the employees to understand appropriate workplace behavior thereby building a productive workplace environment (Newcrest.com.au, 2018).
The management style for Newcrest Mining is identified to be democratic in nature. The rationale for such a style is seen with the different types of long-term decisions which are particularly well suited to gaining employee buy-in. This is further identified as a collaborative process where the employees and the management work together to create a vision. Some of the most vivid democratic evidences are found with conducting open forums among various levels in the organization. It is further discerned that the board takes an active role in governance and oversight of remuneration policies and responsible for making sure the company’s remuneration strategy aligns with the short and long-term business objectives of Newcrest. The democracy aspect in the remuneration strategy is identified with attracting and retaining “high performing Executives (including by providing sign-on grants where appropriate to attract key talent)”. It is for the scene with providing appropriate levels of “at risk” performance for encouraging, recognizing and rewarding high-performance. It is further discerned that the incorporation of the business performance measures aligns with the performance incentives with long-term interest of the shareholders.
Major customers of Newcrest Mining
The organization structure includes Sandeep Biswas as the “Managing Director and Chief Executive Officer” of the company along with Peter Hay and Philip Aiken Am as the independent nonexecutive Chairman and director. It has been further noted that Gerard Bond is the “Finance Director and Chief Financial Officer”. Some of the other hierarchies of the organizational structure includes Roger Higgins, Lady Winifred Kamit and Rick Lee Am as the Independent Non-Executive Director. Some of the other board of director includes Xiaoling Liu, Vickki Mcfadden and John Spark as some of the other independent non-Executive Director (Titman et al., 2017).
Based on the depictions made from annual report publishing on 2017, there are seven major mining facilities which are currently operational in nature. Firstly, Cadia is identified as an underground mining facility situated in “central west New South Wales, Australia”, 25 kilometres “south-west of Orange and 250 kilometres west of Sydney”, C”adia has one of the deepest panel caves in the world and is 100 percent owned by Newcrest”. The second mining source is identified with Lihir is an open pit mine and known as world’s one of the largest gold deposits fully owned by the company and located near “Niolam which is part of the Lihir group of islands, 900 kilometres north-east of Port Moresby in the New Ireland Province of Papua New Guinea (PNG)”. In addition to this, Telfer is recognized as an open pit and underground mine operating since 1977 and hundred percent owned by Newcrest. This gold-copper mine is situated in “Great Sandy Desert in Western Australia, approximately 400 kilometres south?east of Port Hedland”. The fourth facility of the company is recognized with Gosowong is an underground mine situated in “Halmahera Island, Indonesia, Gosowong is operated by PT Nusa Halmahera Minerals”. The fourth mine Bonkiro is an open pit facility which is located approximately 150 km not first “250 kilometres north west of Abidjan in Côte d’Ivoire, Bonikro is a gold mine 89.89 percent owned by Newcrest”. The sixth and the seventh facility is recognized with Wafi-Golpu and Namosi which are still being studied with the research team of Newcrest (Hazen et al., 2014).
The distribution chain of the company has been segregated into three categories namely operation, advanced project and exploration project. The mines have been identified to be located in “Australia, Papua New Guinea, Indonesia, and in Cote d’Ivoire, West Africa”. It has been further discerned that the operation mines are situated in Gosowong, Hidden Valley, Telfer, Lihir and Bonkiro. The advanced project is discerned with Wafi- Golpu and Namosi region. In addition to this, the exploration project is located in Wailevu West region.
Discussion on employees
The purchase of a contract consists of the necessity policies for contract formation, interpretations, agreement to supply goods, packaging, product information, dispatch and delivery of goods and variations in services.
Discussing the existing system
“Newcrest’s Supply and Logistics function” is accountable for procurement and sourcing. The main goal of the companies to ensure that the supply chain transactions adhere to the company policies and standards. It aims to establish relationships to the “mutual benefit of all parties and establishment of “business dealings and agreements that are satisfactory to both Newcrest and the supplier” (Wisner, Tan & Leong, 2014).
The existing system of the company for sourcing of materials is seen with conducting the mining operations on its own. It needs to be further discerned that the existing system includes of efficient method of mining for the large ore bodies, selected together with various types of underground mining methods for optimizing of high-grade epithermal deposits. The mines are mostly located in “Australia, Papua New Guinea (PNG), Indonesia, and Côte d’Ivoire”. The present operations of the company include “Cadia Valley Operations (New South Wales, Australia)”, “Telfer (Western Australia)”, “Gosowong (Halmahera Island, Indonesia)”, “Lihir (New Ireland Province, PNG)” and “Bonikro (Côte d’Ivoire)”.
Being involved in mining operation the company has to deal with several issues associated to pollution, environmental degradation, health hazards and depletion of natural resources. The main areas of improvement in terms of the supply chain is seen with following a policy of green supplies and management which will take into consideration “delivering products and services from suppliers, manufacturers to end customers through material flow, information flow and cash flow in the context of environment” (Fahimnia, Sarkis & Davarzani, 2015). The process design of the supply chain needs to follow lean principles that will ensure that the companies able to keep the waste to the minimum extent possible and at the same time improve efficiency and delivery of the products (Monczka et al., 2015).
Existing system
As per the present inventory system the changes in metal prices will create significant deviations in Newcrest’s gold and copper inventory. In worst cases, “Newcrest curtailing or suspending its exploration activities, with the result that depleted Ore Reserves may not be replaced and/or unmined Ore Reserves or Mineral Resources may not be mined” (Brandenburg et al., 2014).
Suggesting improvement
Some of the major suggestions to improve the present situation would involve proposing changes to the project development are acceleration or abandonment of the current or future project development. The changes should also take place in terms of the estimation of recoverable amount of assets of the company while assessment of potential accounting impairment for those assets. Different types of the improvement activities need to be brought in as per improving the forecast of daily demand and supply of the materials for the customer such as ASKO, Electrolux and Fisher & Paykel (Christopher, 2016).
Management style
Conclusion
The main business activities of the company is recognized with maintaining a portfolio of low-cost, long life mines along with a strong pipeline of “brownfield and greenfield exploration projects”. The reserve and the resources are considerably strong with more than 25 years of production experience at current rates. . Some the various types of other customer profile include Australia Pacific electric cables. In addition to this some of the other cable companies such as Bambach Wires & Cables, Tycab Australia, NAN cables and Nexans Olex are some of the most significant customers of Newcrest for buying copper and refurbishing it to their cables. The management style for Newcrest Mining is identified to be democratic in nature. The rationale for such a style is seen with the different types of long-term decisions which are particularly well suited to gaining employee buy-in. The financial analysis has depicted that the company has been able to position itself in a better way in compared to the previous year. distribution chain of the company has been segregated into three categories namely operation, advanced project and exploration project. The mines have been identified to be located in “Australia, Papua New Guinea, Indonesia, and in Cote d’Ivoire, West Africa”. It has been further discerned that the operation mines are situated in Gosowong, Hidden Valley, Telfer, Lihir and Bonkiro. It has been also noted that the main areas of improvement in terms of the supply chain is seen with following a policy of green supplies and management which will take into consideration “delivering products and services from suppliers, manufacturers to end customers through material flow, information flow and cash flow in the context of environment”.
References
Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Fahimnia, B., Sarkis, J., & Davarzani, H. (2015). Green supply chain management: A review and bibliometric analysis. International Journal of Production Economics, 162, 101-114.
Hazen, B. T., Boone, C. A., Ezell, J. D., & Jones-Farmer, L. A. (2014). Data quality for data science, predictive analytics, and big data in supply chain management: An introduction to the problem and suggestions for research and applications. International Journal of Production Economics, 154, 72-80.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.
Newcrest.com.au. (2018) https://www.adenergy.com.au/, A. (2018). Our business | Newcrest Mining Limited . Newcrest.com.au. Retrieved 1 May 2018, from https://www.newcrest.com.au/our-business
Newcrest.com.au. (2018) https://www.adenergy.com.au/, A. Company policies | Newcrest Mining Limited . [online] Newcrest.com.au. Available at: https://www.newcrest.com.au/about-us/company-policies [Accessed 1 May 2018].
Newcrest.com.au. (2018). https://www.adenergy.com.au/, A Suppliers | Newcrest Mining Limited . [online] Newcrest.com.au. Available at: https://www.newcrest.com.au/suppliers [Accessed 1 May 2018].
Newcrest.com.au. (2018). Retrieved 1 May 2018, from https://www.newcrest.com.au/media/our_business/Maps/asia_pac_map.jpg
Newcrest.com.au. (2018). Retrieved 1 May 2018, from https://www.newcrest.com.au/media/suppliers/Purchase_Order_Standard_Terms_and_Conditions.pdf
Titman, S., Keown, A. J., & Martin, J. D. (2017). Financial management: Principles and applications. Pearson.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning.
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