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

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

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
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Slideshows
Strategies You Need to Make Digital Transformation Work
Joao-Pierre S. Ruth, Senior Writer,  11/25/2019
Commentary
Enterprise Guide to Data Privacy
Cathleen Gagne, Managing Editor, InformationWeek,  11/22/2019
News
Watch Out: 7 Digital Disruptions for IT Leaders
Jessica Davis, Senior Editor, Enterprise Apps,  11/18/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
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.
Sponsored Video
Flash Poll