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ALBANY, NY – JUNE 2015 — Understanding changes in mining equipment procurement practices is critical for mining equipment and service suppliers. In an effort to gain insight into this issue, Research team surveyed mine managers, maintenance managers, procurement managers and other key corporate decision-makers. These are all currently working within four different commodity groups and a range of surface and underground mining operations in North America mines. This survey took place between January and April 2015, with respondents asked specifically about purchasing methods and expectations concerning future expenditure on mining equipment, plant and consumables. The United States was the source of the largest share of respondents, accounting for 63%, with Canada making up the remainder of the survey’s participants. 

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The Anticipated Changes to the Number of Supplier Relationships
Decision makers were asked for their expectations of changes in the number of supplier relationships over the next 12 months. This could result from either a proactive reduction in the number of suppliers they choose to work with, or an expectation of consolidation in the industry.

Purchasing Methods for Heavy Mobile Equipment:

Timetric asked key decision-makers to specify their current purchasing methods for heavy mobile equipment. Respondents were able to select from six methods: ‘outright purchase’, ‘lease’, ‘rental’, ‘commercial hire purchase’, ‘loans or lines of credit’, and ‘chattel mortgage.’ Respondents could also choose multiple methods.

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The Biggest Challenges when Sourcing Products

This question encompasses equipment, plant or supplies and parts. Timetric posed an open-ended question here: respondents could list any challenges they wished. The results are grouped into a number of categories: cost-related, product-related and supplier attribute and capability-related.

By far the biggest challenges when sourcing products were related to supplier attributes and capabilities. These issues were typically: on-time delivery, availability of spare parts, lead times and remote location affecting supply.

Survey participants were also asked to identify specifically where decisions were made. Respondents could indicate that the decision was either made: ‘at the mine site’, ‘centralized in this country’ ‘centralized elsewhere in the region’ or ‘centralized globally outside this region.’ This information is valuable to identify where the key decision-maker is for different areas of expenditure such as ‘plant and heavy equipment’, ‘equipment part and components’, ‘equipment consumables’ and ‘explosives, blasting materials and chemicals.’

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Reasons to Buy:

Compare the methods North American mining operations use to acquire equipment and evaluate any expectations for significant changes of approach, to ensure your products remain an attractive and competitive proposition. 

Investigate where the majority of key decisions are made in the mining industry in North America.

Assess the survey responses to ensure your vendor practices target those key decision-makers who offer you the most direct route to potential commercial advantage.

Assess the key challenges facing respondents in sourcing products in the North American Mining industry.

Consider the degree to which company size impacts on preference; ensuring your product propositions, supply chain and logistical capability are streamlined efficiently to meet your customers’ needs whilst maximizing your revenues.

Analyse general expectations within the North American mining industry for future expenditure. Devise your growth strategy through insight based on variations in each category including: country, mine type, commodity and company size.

Identify the prevalence of preferred global supplier agreements in place for plant, equipment or supplies and the equipment categories where this arrangement is most dominant.

Re-evaluate the breadth of your products, aligning your sales and marketing strategies to those categories which provide you with the best opportunities for growth.

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