A consistent sheet anchor of diverse sectors in the economy, supply chains and procurement networks in the metals & mining industry have exposure to risks of the regulatory environment, shifting geopolitical contours, restructuring of trade agreements and most importantly, the challenge of cyclicality. Moglix Business matches step with metals and mining companies to navigate them towards supply chains and procurement networks of tomorrow.
The metals and mining industry continues to be the sheet anchor of core sectors of economies worldwide, the metals and mining industry continues to ride on strong aggregative effective demand cues. Major drivers of growth in the metals and mining industry include the increasing demand due to rising levels of investments and policy reforms in the GRID (government regulation and infrastructure development) sectors across emerging economies in South Asia, China and SE Asia. A dynamic demographic transition in emerging economies like India is likely to provide a strong impetus to rural to urban migration and consequently a rise in demand for automotive, real estate and consumer product industries that have a strong backward linkage effect with the metals and mining industry. Further, adding to the growth of metals and mining industries is the policy boost to domestic manufacturing and new near-shoring and on-shoring models to shift a major chunk of value creation to emerging economies.
Crucial to carrying forward the growth momentum of the metals and mining industry are strategic responses by companies to the shifting dynamics of global supplies, evolving patterns in the regulatory environment governing trade, levying of tariffs on a reciprocal basis and volatilities in raw material prices. Cyclicality in the mining and metals sector continues to be a legacy challenge. Metals and mining players have persistently faced cyclical fluctuations in the supplies of raw materials and finished products and are likely to continue to do so in the face of persistence with rigid supply chains and inflexible procurement networks. The emerging trend of levying of tariffs on a reciprocal basis poses a risk to long-standing trade agreements and opens new avenues for the shifting of capacity from China, the United Kingdom and the USA to SE Asia and India. Consolidation of key European players in the last decade leaves the prospect for metals and mining companies to explore opportunities for vertical integration in their supply chains and creating new efficiencies through consistent and secure channels of raw material procurement, wide open. Incongruencies among cross-country regulatory frameworks and policy institutions on climate change call for greater clarity and transparency for metals and mining companies to be able to invest in OEE (overall equipment effectiveness), procurement of licenses for mining and strategic selection of suppliers.
Amidst short-term slowdowns in matured markets owing to institutional developments like Brexit, metals and mining companies can look forward to vertically integrating suppliers to insulate supply chains and procurement networks from disruptions to supplies and prices of raw materials. Aggressive vendor consolidation across geographies is likely to enable leading metal and mining companies to create a competitive strategic advantage based on the proactive prediction of cyclical volatilities and consequent de-risking of their supply chain portfolio based on the use of artificial intelligence, search analytics and more efficient contract management with suppliers. Strong data governance across the stages of temperature control in furnaces, process insights and insights on quality through the adoption of big data analysis is likely to enable metals and mining companies to unlock new levers of efficiency.
The Moglix Advantage
At Moglix Business, we partner with companies in the metals and mining sector to share our expertise in supply chain management and procurement practice to enable them to find new avenues of efficiency, responsiveness, cost competitiveness and risk mitigation.