Mining companies would like to invest more in the latest equipment and software, but overstocked buying teams are placing speedbumps along the road to effective procurement, according to a survey of the world’s largest producers completed by industry advisory firm, Harbour.

The research, run over February and March this year, collecting a sample of 75 individuals from within the buying teams of the top 150 miners by market capitalisation, uncovered significant complexity in mining equipment and technology procurement, with 63% of organisations involving more than 11 stakeholders in vendor-selection decisions.

“Mining teams are too large and our anecdotal experience suggests they are overweight with individuals who have the authority to say no, and underweight decision makers who can approve procurement,” Matt Smith, Harbour Managing Partner, said.

Within the decision-making process, miners were spending only 30% of their time on research and vendor-assessment activities.

Smith said miners demonstrated a risk-averse attitude to buying, preferring existing suppliers with which they had an emotional connection and considering a vendor shortlist of just three.

He said individuals within the buying team were acutely aware that poor vendor recommendations would reflect negatively on their professional standing within procurement committees, adding to the tendency to stay with known entities.

“Between that short window of vendor assessment and a risk-averse position among buying team constituents, the importance for preferred suppliers of remaining on the shortlist is clearly paramount, while competing for a place on that shortlist for new vendors presents a significant challenge,” Smith said.

However, the door remained ajar for new suppliers able to effectively address key pain points for miners when marketing.

“Aspiring vendors must adopt comprehensive engagement strategies, emphasising reliability and compliance credentials supported by robust case studies,” Smith said.

The research suggested suppliers able to successfully demonstrate their ability to deliver on schedule, build stakeholder trust and effectively manage project risks stood a strong chance of making a procurement shortlist.

A-Team sales, B-Team support

Meanwhile, AI and machine-learning innovations were accelerating new technology investments, but a shortage in the relevant skills sets needed to support leading edge equipment and software investment was causing 61% of organisations to reconsider future spend.

The only factor seeding more doubt around future procurement was previous project failures, which was cited by 68% of miners surveyed.

The findings also highlighted an often-ignored area regarding post-sales experience and support.

“This reflects the common practice of selling and implementing with the A-Team, then leaving clients with the B-Team for support,” Smith said.

“While industry wide skills shortages generally make this an unavoidable challenge for vendors, the demonstrated preference for preferred suppliers and huge challenges associated with climbing back on the shortlist should provide food for thought when it comes to maintaining A-Team contact with key mining clients.”

Other highlights of the research included:

• Miners anticipated increasing investment in 53% of open-pit mines compared with 76% of underground operations over the next 12 months;
• More miners were interested in investing in predictive maintenance (51%) and real-time data analytics (43%), but when asked for the single-most important area for investment it came down to evaluation and planning software (19%);
• Three quarters (75%) said an emotional connection with a brand was an important factor in shortlisting suppliers;
• Miners consult up to 15 different sources of information during their evaluation process, but still struggle to find necessary materials for decision making;
• Some 57% characterise current marketing communications as overly optimistic, exaggerated and confusing; and
• There are regional differences in the influence of buying-team functions, and the influence of individuals in teams buying equipment (led by on-site management) versus those buying software solutions (C-Suite)

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