Photo by: Reuters
TORONTO (miningweekly.com) – Online data, analysis and advisory services firm Timetric has found that mines throughout Latin America are dissatisfied with their original-equipment manufacturers (OEMs) over cost-related factors, in particular maintenance and servicing costs.
In the survey ‘Winning and Retaining Business in the Mining Equipment Sector in Latin America, 2015', conducted by Timetric’s Mining Intelligence Centre (MIC), more than 100 key decision-makers at operating mines throughout the continent gave their OEMs low satisfaction ratings for cost-related factors.
“Timetric’s research demonstrates the current mind-set of mining companies in Latin America and the importance placed on minimising costs throughout the business. This includes costs associated with the maintenance and servicing of heavy mining equipment,” Timetric’s MIC senior mining analyst Nez Guevara said last week.
OEMs were rated across 16 different factors relating to cost, product attributes, as well as supplier attributes and capabilities. Respondents from Chile, Peru and Brazil consistently gave maintenance and service costs the lowest rating.
The survey concluded that suppliers wishing to win and retain contracts would have to lower their maintenance and service costs.
When asked in what areas their OEMs differentiated themselves from the rest of the market during the selection process, 94% of the respondents cited ‘better maintenance and service provisions’ as the highest rating differentiating factor.
Further, when asked to nominate areas in which their suppliers need to improve, 53% of respondents in Chile, 44% of those in Peru, and 22% of respondents in Brazil cited the ‘ability to support cost reduction/minimisation’ as one of the top three areas for improvement.
Failure to improve may result in business loss, with 26% of respondents saying they were likely to switch to a different supplier within the next five years. A further 25% of respondents indicated that they were uncertain whether they would either switch or remain with their current supplier.
There was a correlation between dissatisfaction with costs, in particular maintenance and service costs and the likelihood of switching. Of the significant markets covered, Brazil, Peru and Chile had the lowest levels of satisfaction with maintenance and service costs, while simultaneously having the highest likelihood of switching, with 33% in Brazil, 32% in Peru and 26% for Chile.