Inside the Strategic Sourcing Transformation at AngloAmerican (Part 2)

In the first post in this series, which we featured yesterday on MetalMiner, we covered the basics and key themes surrounding AngloAmerican's recent procurement transformation. We learned quite a bit from the keynote presentation that Susan Lasecki-Coiro, AngloAmerican's Head of Global Supply Chain Strategy and Performance, presented at the event. Susan's experience leading AngloAmerican's "supply chain transformation" is really just another story of a large multinational realizing it could potentially save billions of dollars through better procurement. But a few themes beyond the basics that we shared in our initial take on AngloAmerican's story do stand out.

These include a newfound theme and focus on local procurement, including providing micro-credit to suppliers, to help improve community relations by reducing project approval times and other related benefits/preferences. Not only is AngloAmerican operating in some of the poorest regions of the world (e.g., Africa), but they're engaged in often dirty and dangerous work -- as are their suppliers. Being cognizant of both public and private sector perception of how they use procurement as a tool for both social good as well as shareholder value, no doubt is figuring into this strategy.

As part of its local procurement efforts, AngloAmerican is funding supplier parks in South Africa to provide critical infrastructure to support small and local suppliers. They're also developing country strategies for local procurement as well as finding ways of relying on both local and global supply. In this regard, Susan noted, "As we source from China, we start [encouraging] businesses that do the distribution and support for Chinese importing in countries we operate in," looking to back small, local companies in these efforts.

To help measure the performance of these efforts, AngloAmerican is relying on a range of policies, procurement guidelines, favorable contract terms, key performance indicators (KPIS) and reporting requirements to both steer spend in certain areas and insure that suppliers adhere to AngloAmerican's requirements. Perhaps most curious, Spend Matters finds the integration of local sourcing into global sourcing programs a model that other organizations focused on small business and diversity spending might also want to consider.

Looking forward, AngloAmerican will continue to build on its global supplier relationship management (SRM) program including integrating supplier collaboration with business unit strategies (they appear to be working with or at least leveraging the IP of Vantage Partners in this area). It also sounds as if, given Susan's enthusiasm for the supplier management technology area, they will deploy a supplier management toolset (likely Emptoris, from what we gathered) to help guide supplier qualification, evaluation and related program efforts.

- Jason Busch