Last year Dints secured a Vendor Managed Inventory (VMI) contract with a prominent African mining client, Gold Fields Ghana. Already live at the Tarkwa mine-site, Dints’ new VMI model tackles inefficiencies within the procurement, supply chain and inventory management functions. Combined with a tailored payment plan, Dints says it “is able to deliver client savings of 20-25%.”
With financing backed by the UK Government, Dints can offer this new service to all geographies and product lines. The benefits of Dints’ VMI model and services include:
- Improved payment terms on operational and capital expenditure
- ‘Pay as You Use’ minimises capital tied up in inventory
- Inventory management control reduces obsolete stock holding
- Streamlined procurement and warehouse management
- Lower procurement costs
- A reduction in equipment total cost of ownership
- Price transparency and fixed prices
Deferred payment terms improving the cash flow can be flexed in either of 3 ways. The first, buyers credit is more appropriate for large Capex spends. Suppliers credit uses bills or promissory notes. The third is structured receivables financed – through the Dints contract – providing balance sheet efficiencies.
Each can be structured as a revolving facility and given the UK government support provides the buyer with:
- Low cost funding (funding costs are priced against the UK Government risk)
- Low cost of carry-financing used as and when procurement takes place
- Additionality of exposure – these facilities do not impinge on your existing bank appetite
- Ability to scale as facility is utilised
- Match currency of contract with currency of supply
- Simple loan documentation (LMA Standard) or against Bills of Exchange/Promissory Notes
- Structured repayment terms that provide positive cash flow
Dints is now in a position to offer new and established clients the VMI service, which can be tailored to suit specific client requirements.
