Restoring Supply Chain Discipline in a Major Mining Operation

Restoring Supply Chain Discipline in a Major Base Metals Mining Operation

Context

A major zinc and copper mining operation on Vancouver Island was experiencing escalating operating costs despite stable production volumes. Annual non-capital spend exceeded $120 million, yet leadership lacked confidence in cost control, supplier performance, or procurement discipline.

The site operated in a high-cost, logistically constrained environment. Over time, urgency had displaced discipline. Spending decisions were decentralized, reactive, and poorly governed.

Indicators of institutional breakdown included:

Pervasive maverick spending outside formal procurement channels
Low contract coverage and inconsistent supplier terms
Excessive spot buying driven by perceived urgency
Weak demand planning and limited spend visibility
A normalized culture of waste justified as operational necessity

Black & Right was engaged to restore supply chain control, arrest spend drift, and establish durable commercial discipline without disrupting production.

Institutional Problem

Assessment revealed that cost overruns were not driven by pricing alone, but by loss of institutional control.

Key findings included:

Over half of addressable spend was unmanaged or informally sourced
Supplier relationships were transactional and fragmented
Contracts, where they existed, were inconsistently used or enforced
Operational teams bypassed procurement due to speed and trust concerns
Leadership lacked reliable data on what was being bought, from whom, and why

The organization was spending at scale without governance, and speed had become an excuse for inefficiency.

Approach

Black & Right focused on restoring supply chain discipline while maintaining operational continuity.

The engagement unfolded over six months and followed a structured progression:

1. Spend Transparency and Control Baseline
Spend data was consolidated, cleansed, and categorized to establish a true baseline. This exposed fragmentation, duplication, and uncontrolled purchasing behavior previously hidden across systems.

2. Contracting and Supplier Rationalization
High-value and high-frequency categories were prioritized. Suppliers were consolidated, contracts renegotiated, and commercial terms standardized. Contract compliance expectations were made explicit.

3. Procurement and Operations Alignment
Procurement processes were redesigned to support operational urgency without sacrificing control. Clear pathways were established so speed no longer required circumvention.

4. Governance and Enforcement
Approval thresholds, buying channels, and escalation rules were clarified and enforced. Maverick spending was actively challenged and progressively eliminated.

5. Cultural Reset and Accountability
Leaders were held accountable for spend behavior within their areas. Waste and drift were addressed directly. Discipline replaced convenience as the operating norm.

Outcomes

Within six months, the operation achieved material and verifiable results:

Over $10 million removed from annual operating spend
Approximately 85 percent of total spend brought under formal contract
Maverick spending reduced to negligible levels
Supplier performance improved through clearer expectations and leverage
Spend visibility enabled proactive management rather than retrospective explanation

Critically, these outcomes were achieved without production disruption or safety compromise.

Enduring Impact

Supply chain discipline became embedded into day-to-day operations.

The organization moved from reactive buying to governed sourcing. Procurement was repositioned as an operational enabler rather than a bottleneck. Leaders gained confidence that spend decisions aligned with both operational needs and commercial control.

Cost discipline became structural, not episodic.

Institutional Lesson

In capital-intensive operations, uncontrolled spending is rarely accidental. It is the predictable outcome of weak governance and normalized exception.

When supply chain discipline is restored, cost reduction follows quickly and holds under pressure.

Prepared by Black & Right Management Consulting Inc.

This case study reflects an anonymized engagement. Organizational details have been modified to preserve confidentiality while maintaining factual integrity.

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