Mining Company To Move $1B In Spending To Procurement Exchange - InformationWeek
IoT
IoT
News
News
3/27/2002
09:56 AM
50%
50%

Mining Company To Move $1B In Spending To Procurement Exchange

Codelco will use E-sourcing software from Emptoris to make the move to the metals exchange Quadrem International.

Fast-moving companies want procurement exchanges to move beyond office supplies. Codelco, the world's largest copper mining company, needs to automate the sourcing and procurement of multimillion-dollar mining machinery that's central to its business. This summer, the mining company, formally known as Corporacion Nacional del Cobre de Chile, will begin moving more than $1 billion in annual spending onto the mining, minerals, and metals exchange Quadrem International Ltd. in Dallas. The move is based on new E-sourcing software from Emptoris Inc.

Codelco, in Santiago, Chile, uses Quadrem's auction- and catalog-based procurement tools. But German Sandoval, Codelco's E-business manager, says the process of buying from catalogs is ill-suited to his business and to the culture of Chile. Quadrem's implementation of Emptoris' ePass sourcing software will let the government-owned company automate its preferred procurement method--issuing requests for proposals and negotiating contracts based on supplier quality and price.

The ePass software, which Quadrem offers under the name Quest, will automate the request-for-quotes and bid-receipt process. It should also help in contract negotiations. Quadrem's integration with Codelco's SAP financials will let the company manage contracts for high-cost strategic goods, such as massive smelting furnaces and mining machinery, by issuing purchase orders directly from SAP. Also, some contract items may be cataloged on Quadrem so they're easier to order. For one-time purchases, Codelco will use Quadrem's proprietary tools to issue an electronic purchase order.

Sandoval says Codelco desperately needs to automate the sourcing process. The company faxes as many as 15,000 RFQs per month to suppliers and processes them manually. Bids are also processed manually. And purchases against contracts are manually entered into the company's SAP financials. "I send RFQs to five suppliers for most items," Sandoval says. "Using the new system, I'll be able to send them to 10 or 20 and pick the best supplier at the best price, and begin to manage procurement in a much more cost-effective way." Sandoval says he expects to move as much as $100 million in spending to the exchange this year and more in coming years. He expects to save millions of dollars annually using the new system.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
2017 State of IT Report
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll