Driving working capital • IntensiÔcation of spend consolidation and control, by working more closely with suppliers, increasing global sourcing while excellence rationalizing the supplier base, and reducing complexity in processes As the pace and scale of industry change continue to escalate, • More effective management of sourcing contracts by mining companies seeking to achieve further progress in WC will `Ynaf_\]\a[Yl]\kljm[lmj]koal`[d]Yjdq\]Õf]\jgd]k need to focus on a number of key initiatives as mentioned below. and responsibilities, trusted providers with contracts that • Further streamlining of processing and supply chains to drive Yj][Yj]^mddq[gfÕ_mj]\Yf\eYfY_]\oal`aehjgn]\ _j]Yl]j]^Õ[a]f[a]k$ghlaear]Ykk]lmladarYlagfYf\Zmad\`a_`]j communication and planning, and adequate contingency plans responsiveness into systems and processes in place • Greater collaboration and process alignment with customers • Optimization of spare parts planning and inventory to reduce costs, lower inventories and improve service levels management • Better supply chain planninglg]fkmj]]^Õ[a]flYddg[Ylagf • Implementation of a larger, more uniÔed shared services of supply chain resources across the organization, improved organization, comprising processes and functions related to coordination of maintenance activities and capital project j][]anYZd]kYf\hYqYZd]k$gj\]j%^mdÕde]flYf\hmj[`Ykaf_$ delivery on time and within budget human resources, information and legal services • Effective integration between supply chain partners, enabling • Alignment of business processes and information systems enhanced demand and supply visibility, improved forecasting up and down the value chain to share real-time and accurate accuracy and better supply chain reliability supply and demand information • Better coordination between supply, planning, processing, • Increase in the use of Ônancing solutions directly or through procurement, logistics and sales functions and processes, Yl`aj\%hYjlqYkYoYqlghjgna\]YlljY[lan]Yf\Ö]paZd] in order to align the level of demand, mine and production and alternatives to customers and suppliers capacity to customer demand, while balancing cash and costs • Active management of the trade-offs between cash, cost, with delivery service delivery levels and risks, that are sometimes required with • Improvements in billing and cash collections by setting an various WC strategies — choosing, for example, between effective organizational structure of collections and dispute capacity utilization or cost-to-serve and inventory levels; management, tightening controls around terms and contracts, customer payment terms and sales price rebates; supplier and consolidating billing processes to accelerate invoice payment terms and early payment discounts; and inventory production levels for consignment stock arrangements and customer • More effective management of payment terms for delivery levels customers and suppliers, including renegotiation of terms • Driving WC synergies from acquisitions, by improving and management of payment milestones on capital project processes from integrating businesses and sharing internal WC delivery — sometimes challenging “customary contracting leading practices more widely across the extended organization arrangements” • Changing internal behaviors, by setting adequate targets for • More effective management of partnerships payment improvements in WC using monthly or year-average rather than arrangements, including paid and received royalties year-end balances, accurately assessing the progress being • Improvements in cash Õow forecasting processes, including made at both the corporate and the unit level, and aligning the more rigorous budgeting and planning, especially for new compensation of different groups (with multiple and sometimes capital projects [gfÖa[laf_afl]j]klk!lgl`]j]d]nYflh]j^gjeYf[]e]Ykmj]k Cash in the ground: working capital management in the mining sector 10