JoAnn put down the inventory reports of four Mosaic mines that she had been contemplating. Much of the raw material for the company’s phosphate fertilizer production was mined and processed at these Florida facilities. Keeping track of the vast array of equipment, parts, and supplies required to operate the mines had become an issue.
JoAnn Speaks, Purchasing Manager at Mosaic Company, was tasked in 2015 to implement a comprehensive system to identify, control and track the company’s inventories. A recent Sarbanes–Oxley (SOX) audit had found weaknesses in Mosaic’s inventory practices leaving it unable to adequately account for the disposition of millions of dollars of assets annually.
Working closely with technology companies Motion Industries and CribMaster®, JoAnn had successfully implemented a radio-frequency identification (RFID) system at five Mosaic chemical facilities. The implementation experienced hiccups, but problems had been resolved and the benefits had quickly become apparent. Within two months of going live, losses were down 35% and time spent locating items was reduced by 160 man-hours per month at the pilot chemical facility.
Once the chemical facility implementation process approached completion, JoAnn turned her attention to the mines. RFID was great for the static and centralized chemical facility operating structure, but would it be successful in the mines? Although each mine had a central warehouse facility, equipment and numerous inventoried, critical-to-operations components were also spread across many square miles to minimize downtime in the event of a failure. This created environmental and connectivity issues that would have to be overcome to use RFID. With all the additional options available outside of RFID including vending, inventory centralization and even manpower additions, what was going to be the right single or combination of solutions? Or, was there something she hadn’t yet considered? The only sure thing was the SOX audit meant the status quo was not an option.
JoAnn picked up the reports and leaned back in her chair as she considered the strengths and weaknesses of the possible solutions and decided what to do next.
Author: Pete Hendrickson, Brendan Hess, Nikki Joseph, Tom Nankervis, Russell Stone
Hendrickson, P., Hess, B., Joseph, N., Nankervis, T. and Stone, R. (2019). How to fill the holes in mining inventory? Muma Case Review 4(3). 1-21.