Cost control (MM)

Responsible departments:

Finance, Supply Chain, Procurement, Inventory Teams

Effective cost control focuses on balancing material availability with inventory investment. Organisations must carefully manage procurement costs, inventory holding costs, freight costs, warehouse operating costs, and obsolescence risks while ensuring critical materials remain available when required.

Accurate master data and regular KPI monitoring enable organisations to identify cost-saving opportunities throughout the supply chain. By analysing inventory holdings, supplier agreements, freight arrangements, stock turns, and obsolete material exposure, businesses can optimise working capital while supporting operational performance and reliability.

  • Monitor inventory carrying costs and stock value.
  • Review procurement and freight expenditure.
  • Identify obsolete and slow-moving inventory.
  • Implement initiatives that reduce supply chain costs.

Inputs

Financial reports, inventory valuations, procurement data, KPI reports

Outputs

Cost reduction initiatives, budget forecasts, inventory optimisation plans

Benefits

Reduced inventory costs, improved working capital, increased supply chain efficiency

Demand Planning & Forecasting (MM)

Effective demand planning and forecasting is critical to aligning material availability with operational needs. This process must be informed not only by short-term production schedules but also by long-term Life of Mine (LoM) and asset management plans, to ensure materials are available throughout the entire mining lifecycle

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Spare Parts for Assets (MM)

Once the planning for a new asset has been completed, the organisation can proceed with how they will procure the asset (via a tender/contract, or purchase order etc).A critical spares analysis should be carried out to determine risk of extended downtime in the event of an unplanned failure & inventory holdings should be adjusted accordingly.

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Strategic Sourcing & Contracts (MM)

Strategic sourcing sets the foundation for parts availability and cost control by aligning supplier selection and contract terms with operational needs. 

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Procurement & Vendor Management (MM)

Effective procurement ensures timely acquisition of goods and services that meet quality, cost, and schedule requirements. Operations and Maintenance provide demand forecasts and specifications, Supply Chain executes purchase orders and manages vendor relationships, while Finance oversees financial controls and payment processes. 

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Logistics & Shipping

The movement of materials from suppliers to site demands seamless coordination. Supply Chain oversees freight contracts and shipment tracking, Operations communicates operational priorities, Maintenance communicate urgency and identifies critical spares for expedited handling, and Finance monitors freight costs and compliance. 

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Cataloguing

Accurate and consistent cataloguing is fundamental to effective materials management. Establishing clear master data standards ensures that every item is uniquely identified, described, and categorised in a centralised system. 

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Repairable Item Process

Repairable items are high-value, long-lead, or critical components that can be refurbished and returned to service rather than replaced, delivering significant cost savings, reducing lead time risks, and improving asset availability. Credit returns involve returning unused or excess materials to the warehouse or suppliers for a credit or refund

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Inventory Master Data

Master Data must be accurately entered and updated into an organisation's computer systems as information about the material changes over time. This goes for all types of Master data in the system.

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Warehousing Management

Warehousing focuses on the physical flow of goods receipting deliveries, storing items in safe and accessible locations, issuing them to end users and conducting stock takes.

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Inventory Management

Inventory control is the governance and oversight of stock monitoring stock-outs, identifying surpluses, reconciling variances, and ensuring the ERP or materials management system master data is updated accurately and in real time.

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Fulfil Customer Requirements

Delivery and Distribution ensures materials are delivered from the warehouse or laydown areas to the operational point of use, the end user. Smooth distribution and goods tracking systems can minimise downtime.

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Obsolete Review, Revalue or Write-off

Disposal covers the responsible handling of obsolete, damaged, or non-conforming materials that cannot be returned or reused. Effective repurposing and recycling reduce waste, improves ESG performance, and can generate secondary revenue streams. This ensures that surplus or obsolete materials are repurposed for alternate uses.

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Continuous Improvement (MM)

Continuous improvement ensures materials management processes remain efficient, resilient and aligned with operational requirements through ongoing review, optimisation and innovation.

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Cost control (MM)

Cost control ensures materials are sourced, stocked, handled and disposed of in the most cost-effective manner while maintaining required service levels and minimising operational risk.

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Analyse Performance (MM)

Performance should be analysed through regular KPI and performance reports. These reports drive decision making across procurement, inventory, warehousing and supply chain activities and are enabled by accurate ERP master data.

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Materials Management Framework

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"Materials Management is the process of planning, acquiring, handling, and controlling materials used in production or operations. It ensures that the right materials are available at the right time, in the right quantity, and at the right cost."