Virtual warehouses for future mines

I make no secret of the fact that I love interviewing female business leaders.

Imagine my delight then on discovering that Bawn Holding’s founder and CEO, Victoria Stephen, is also a former publisher (Mining Review Africa, in case you were wondering).

After marvelling that we had never met before, we got down to business discussing how digital technologies can elevate procurement from a supply chain issue to one that can positively influence mine environmental, social governance (ESG) performance.

Following my conversation in early March with Mining Shared Value’s Jeff Geipel about local procurement and the value it can deliver for mine stakeholders, the ‘why?’ part of the conversation was clear; it’s very obvious why the mining industry needs more local procurement.

But the ‘how?’ part was still a little hazy.

Stephen’s N-FUSE platform may hold the answer. The digital hub connects mines with local suppliers, increasing the visibility of small businesses and providing transparency for both parties.

When we spoke, Stephen had just received approval for the system pilot with a large South African mining company.

“I would describe N-FUSE as a virtual warehouse,” she explained. “People can virtually shelve whatever they want to sell, and buyers have access to that anytime, anywhere.

“The platform is geared specifically towards increasing visibility and providing equal opportunities for community suppliers – small mom and pop businesses, and black-owned companies that are struggling because they don’t have the opportunity or resources to market themselves to different buyers.

“With the pilot, we’re providing a lot more than just the platform, we’re helping the mining company with their ESG spend on supplier development so they can better report that to the government, because they have certain criteria to meet within the mining charter.”

Sustainable supply chains

A lot of mining companies include supplier development within their ESG projects. They will invest in small locally owned businesses that then supply them with certain commodities or services, and often the mines provide workshops and mentorship schemes to help those suppliers grow.

Although that kind of support is incredibly valuable, it can leave suppliers co-dependent upon the mining company. If that mine eventually closes or chooses, for whatever reason, to take their business elsewhere, it leaves those suppliers vulnerable. It’s not a sustainable model.

Stephen is aiming to overcome this by bring multiple mining companies and their community suppliers in certain regions – the first will be South Africa’s northwest mining region, the richest in the country – on to the N-FUSE platform.

This will allow the mines to search and engage with suppliers they might not have met before with ease.

The mines benefit from a wide choice of pre-vetted suppliers, competitive pricing and lower supply chain risk, while the suppliers benefit from increased market exposure, digital tools and growth support, and equal opportunities. Everyone’s a winner.

“As well as creating a centralised platform that’s easy to use, we can help suppliers with quotes and invoicing,” Stephen explained.

“We send tenders via SMS, because some suppliers have access to technology and some don’t, but they all have mobile phones. We can send them information on things like training sessions and mentorships too.

“Many mines have big supply chain management systems in place but, on the other side, not many small suppliers have a dedicated accounting system.

“It’s not an issue for large suppliers or multinationals, because they can integrate straight into the system, but many small- to medium-sized businesses don’t have a way to communicate with the buyers directly.

“So, N-FUSE bridges that gap and transparency is 100% the theme. We’ve created a platform where buyers can request a quote and compare pricing for all the relevant suppliers that offer that product or service in one space.

“They can see lead times, pricing, previously prices quoted, and both suppliers and buyers can rate each other based on previous transactions using a standardised system.”

Championing small businesses

Stephen explained why Bawn has chosen to focus primarily on small- to medium-sized suppliers.

“Smaller businesses have really suffered due to COVID-19. I’m not saying that big businesses haven’t suffered too, but they have the momentum to keep going and many can downsize, whereas small businesses that rely on one or two big contracts can’t.

“Small- to medium-sized businesses are the backbone of our economy. The intention behind what I’m doing is to support SME’s by promoting supplier development and community growth.”

Stephen echoed Geipel’s statement to me that it can be particularly hard for local suppliers to gain consideration from buyers.

“The mining fraternity is old school. They like to use the people they know, although that is changing and evolving,” she said.

“Some companies are very rigid in working with the same suppliers, and others don’t have the time to go and find new suppliers that could potentially fill that gap.

“N-FUSE does all of that. It collects all the documentation, we make sure that the quality standards are correct, all the information that mines need to vet suppliers is provided upfront.

“They don’t even have to speak to the suppliers, they can use our system as a communication gateway. It’s super convenient.”

Creating equal opportunity

Convenience aside, N-FUSE provides a practical way for mines to better diversity and drive inclusion throughout their supply chains.

By acting as a gateway between buyers and suppliers, it ensures equal opportunity and removes the potential for bias (unconscious or otherwise); the first thing buyers see is information on a supplier’s competitiveness and track record, rather than the people fronting it.

“It’s about including companies in a fair and just way,” said Stephen passionately. “You might be the smallest of companies, but now you can compete against any supplier that can provide the same commodity.

“And we don’t base it only on pricing, we make sure that buyers have visibility on quality, lead times, delivery times and also track record – has a supplier’s equipment met its warranties in the past? Has it broken down prematurely? Those things are all important in decision making.

“What I’m doing is taking the consumer ecommerce look and feel of rating and choice and bringing it into the industrial space. Its not an easy feat but I have no problem with challenges!”

The platform is cloud based and structured with user fees for the mining companies rather than the community suppliers, thus removing any financials barriers linked to company size.

“Behind every mine, there is a whole ecosystem of community suppliers who could also provide things like food to feed the mine workforce, or gum boots and other pieces of kit,” Stephen told me.

“Eventually we would like to empower suppliers to expand their product ranges using their relationships with other companies throughout townships.

“This is not small money we’re talking about. It could make a big difference to some communities.”

Learning and growing

As many of us know (myself included), there can be a certain amount of trial and error involved with setting up and running a small business. Some companies can afford to take a hit when they make a mistake, but others can’t.

“One of the biggest challenges community suppliers face when supplying big businesses is that they’re still learning to run their companies and deliver consistently on contracts, said Stephen. “For example, one month they be able to meet the mine’s requirement for 100 loaves of bread.

“However, they might have budgeted incorrectly, and that might mean that the following month they can only provide 50 loaves and so the mine ends the contract. Then that supplier has no business and goes in.

“We want to enable sustainable supplier development. By having a centralised platform where suppliers are grouped by commodity, when you have a shortfall from one supplier there are five or six other options immediately available to the buyer to fill the gap for that contract.

“The system supports both parties. Mines can even choose to split their contracts between multiple suppliers to reduce their supply risk.”

N-FUSE will also provide advantages when it comes to equipment breakdowns or repairs.

Say, for instance, an overland conveyor belt splits at a mine and production stops because the supplier doesn’t have a replacement belt in stock.

Mines will be able to search the platform for other suppliers who do have stock or even from nearby mines with surplus, potentially savings themselves millions of dollars in downtime.

A model for success

Bawn Holdings will, of course, face some challenges as N-FUSE is rolled out in different regions.

Companies who have longstanding relationships with mines will understandably be loath to share but, in the long run, the system should create a better market environment for everyone.  

“I feel very strongly that the whole point of equality is to level the playing field,” Stephen told me.

“It’s to provide equal opportunity for everyone to participate. The aim is to create an environment where it’s fair to do business and where everyone can take responsibility for their own success.

“The pilot is really a community growth initiative. I worked with the mining company to build the model but, really, it’s applicable to any mining company that has an ESG programme.

“I’d like to see it extend into Africa and I’ve already had calls from Canada; their first nation drive is huge so something like this would be very valuable there too.”