Comparing mining and manufacturing supply chain

processes: challenges and requirements

• Published in : Production Planning & Control: The Management of Operations.

• Published on : 10 Dec 2013• Page no : 81–96 Vol no :2• Presented by : Nikunj Rana• Authors : Raul Zuñigaa, Thorsten Wuesta and

Klaus-Dieter Thobena

Comparing mining industry and manufacturing

industry from a supply chain perspective• An important difference between the mineral raw materials

industry (mining industry) and the manufacturing industry is the way raw materials are obtained or extracted.

• In the mining industry, raw material is extracted from mineral deposits in the natural environment.

• The manufacturing industry obtains its raw materials, to a large extent, from its warehouses and or directly from its suppliers after purchasing them on the global market.

Comparing characteristics of sourcing in mining and manufacturing

EM MODEL• The EM model is an industry business process model that

provides a categorization of all activities that are applicable to the mineral raw materials industry (EMMMV 2010).

• This model has a specific structure where processes are categorized into three different levels of processes.

SCOR MODEL (supply chain operation reference)

• SCOR has grown into what many consider the standard supply-chain framework , widely established within the manufacturing industry. The version 10.0 of SCOR model includes a framework for business processes, metrics, high-quality practices, and people (SCC 2010).

• SCOR describes supply chain as consisting of five primary management processes : Plan, Source, Make, Deliver and Return.

Gap between the EM model and the SCOR Level model

• A large difference between the ‘source’ process of the SCOR model and the ‘sourcing’ process of the EM Model exists.

• This 'sourcing’ process includes the exploration, development, and extraction processes of the EM model.

• The ‘source’ process of the SCOR model focuses on purchasing/procurement, which is different to the ‘sourcing 'process in the mineral raw materials industry.

• The SCOR model does not address sales and marketing, product development, research and development, and some elements of post delivery customer support.

• The exploration and development processes are more similar to product development processes or research and development processes and are best suitable to the Design Chain Operation Reference model (SCC 2006).

SCOR level 2 model

SCOR level 3 model

Conclusion and outlook• In order to understand the requirements of the industry specific models,

the dedicated EM model and the generic SCOR model (manufacturing), are presented and compared before the identified gap is elaborated on.

• This paper demonstrates that the modeling of extraction processes in the mineral raw materials industry using the SCOR model is possible and provides benefits to both sides.

• It is necessary to continue the research in order to model the exploration and development processes, so that an integrated, overarching model describing the whole sourcing process within this industry can be obtained.

• To model these processes, there is a need to understand the concepts related to product definition, product classification, product life, mineral commodity life, product life cycle, mine life cycle, new-product development, and new mine project development.

What I have learned

• Facts about the SCM in the Different industry . • EM Model for SCM (mining industry)• SCOR model For SCM (Manufacturing

industry) .• Gap between both model .• Different levels of SCOR model • Implementation of SCOR model in copper

mine industry in Chile .