1. No category

Opportunities for Canadian Mining Equipment
and Service Exporters
Eugene Iacob & Raj Shenoi
Hatch Procurement - CAMESE
November 28th 2012
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
3
Hatch Overview
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Employee owned
Serving mining & metals, energy and
infrastructure clients for more than 80
years
Greater than 11,000 professionals
Projects in more than 150 countries
More than $35 billion of projects under
management
Three principle services:
– Front end technical, business and strategic
consulting
– Full EPCM services for major projects
– Operational support services
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Our Values
• Safety
• Quality
• Innovation
• Sustainable Development
• Risk Management
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Our Professional Services
• Project Delivery
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Engineering
Project management
Procurement
Construction management
• Consulting
– Management consulting
– Technologies
– Environment, Sustainability &
Community Interface
– Systems & Process Control
• Operational Services
– In-plant engineering services for
operations
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Global Operations
11,000 staff – November 2012
CANADA
Calgary, Alberta
Halifax, Nova Scotia
Montréal, Québec
Niagara Falls, Ontario
Oakville, Ontario
Saskatoon, Saskatchewan
St. John’s, Newfoundland & Labrador
Sorel-Tracy, Québec
Sudbury, Ontario
Toronto, Ontario
EUROPE
Vancouver, British Columbia
London, England
Winnipeg, Manitoba
Moscow, Russia
St. Petersburg, Russia
CHINA
Beijing
Shanghai
INDIA
USA
Amherst, New York
Baltimore, Maryland
Boston, Massachusetts
Buffalo, New York
Cleveland, Ohio
Denver, Colorado
Houston, Texas
Millburn, New Jersey
New York, New York
Pensacola, Florida
Phoenix, Arizona
Pittsburgh, Pennsylvania
Sacramento, California
San Diego, California
San Francisco, California
Seattle, Washington
Tampa, Florida
New Delhi
MIDDLE EAST
Abu Dhabi, UAE
Al Khobar, Saudi Arabia
Sohar, Oman
SOUTH
AMERICA
Antofagasta, Chile
Belo Horizonte, Brazil
Lima, Peru
Rio de Janeiro, Brazil
Santiago, Chile
São Luís, Brazil
São Paulo, Brazil
NEW
CALEDONIA
SOUTH AFRICA
Johannesburg
Pretoria
Cape Town
Nouméa
AUSTRALIA
Brisbane
Gladstone
Mackay
Melbourne
Newcastle
Perth
Townsville
Wollongong
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
8
Health and Safety Management System
11/2011
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Health and Safety Management System
Knowledge bank:
• Manifesto, health, safety, environment and community (HSEC) policy, safety manual
• Functional guides, safe work procedures
• Standards, legislation, approved codes and guidelines
Deployed through:
• Program and tools
• Critical safety requirements
• Safety guidance notes
Safety Management Delivery Plans:
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Project safety goals & objectives
Definition of responsibilities
Actions to implement the program
Monitoring and auditing
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
11
Hatch Quality Management System
ISO 9001 certified since 1994
Quality knowledge bank
Quality policy
Hatch Quality
Management System
manual
Functional guides
Company procedures
Project specific plans
& procedures
Apply PDAC
Plan
Do
Act
Check
Implementation
Plan quality
Perform quality assurance
Perform quality control
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
13
The Metals Sector
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Non-Ferrous
– Copper, gold, manganese, nickel, platinum,
uranium, vanadium, zinc
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Light Metals
– Alumina, aluminum, bauxite, magnesium
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Iron & Steel
– Ironmaking, rolling and finishing, steelmaking
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Industrial Minerals
– Coal, diamonds, potash, titanium
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Mining & Mineral Processing
– Design, maintenance consulting/training,
project implementation
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Iron Ore
Coal
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The Energy Sector
• Renewable power
– Hydro, wind, solar, biomass
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Nuclear power
Thermal power
Transmission & Distribution
Oil and Gas
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Conventional oil, oil sands and heavy oil
Unconventional oil
Pipelines, storage and transportation
Gas and LNG
11/2011
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The Infrastructure Sector
• Rail & Transportation Systems
– Heavy rail planning, design and construction,
urban rail, systems, high-speed rail, planning
and logistics
• Ports and Marine Terminals
– Gateway infrastructure for commodity exports,
marine development and planning, port and
harbor design and construction
• Water
– Desalination, water treatment, water resources
and master planning, process separation and
membranes
• Infrastructure Services
– Program management, tailings and recovery,
capital program infrastructure services
11/2011
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Major Client Projects
Client
Project
Capital Cost
(million USD)
Chevron /Exxon/Shell
Transnet
Anglo American
Santa Clara Valley
Xstrata
Mosaic
Gold Corp
Cliffs Natural Resources
Kinross
Alcoa/BHP Billiton/Rio Tinto Alcan
Peter Kiewit Sons Co. and Flatiron Constructors
Vale
OPG
GTAA
Babcock & Brown Infrastructure
Wuskwatim Power Partnership
Alouette
Codelco
Newcastle Coal Infrastructure Group
Kumba Iron Ore (Anglo American)
Rio Tinto (QMM)
Xstrata
Rio Tinto Alcan
Bruce Power
Barrick Gold
Gorgon LNG Facility
Port and Rail Infrastructure
Anglo Coal Program
Bay Area Rapid Transit Program
Koniambo Ferronickel Project
Fertilizer Business Expansion
Minera El Morro
Chromite Project
Tasiast
Alumar Refinery
Port Mann/Highway 1 Project
Onça Puma Nickel
Niagara Tunnel
Pearson Terminal Redevelopment
Dalrymple Bay Coal Terminal
Wuskwatim Generation Station
Phase II Expansion
Minister Hales
NCIG Coal Export Terminal
Sishen South Project
Madagascar Minerals
Nickel Rim South
Jonquière Smelter
Bruce A Units 3 & 4 Restart
Pueblo Viejo Autoclave
43,000
12,000
12,000
9,100
4,700
4,300
3,600
3,300
3,300
3,000
2,460
2,300
1,600
1,500
1,300
1,300
1,200
1,100
1,100
1,062
940
900
900
650
11/2011
650
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
Hatch Global Procurement
500
Procurement
Professionals
6,000 Human
Years
Experience
$15 B +
Managed /
Year
18
4,000+
Procurement
Packages
2,000+
Different
Vendors / Year
100+ Different
Countries of
Origin
Global Procurement
Helps Minimize
Procurement Costs,
Lead Times and Risks
11/2011
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Hatch EPCM Model
SCHEDULE/ LEAD-TIME
PROCUREMENT
C
P
M
PRICE
E
HSEC/ Quality
11/2011
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Trends in Procurement
• Early supplier/contractor involvement advantages:
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Synergies arising from high performance
Better specification integrations
Greater flexibility in timing and planning
Earlier dedication of resources
Early procurement solutions
Understanding risk by all parties
11/2011
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Trends in Procurement - cont’d
• Strategic alliances with major suppliers
• Local suppliers involvement
• Hire best SCM professionals with top expertise in:
– Team collaboration, emotional intelligence, negotiations, planning
& technical, financial, diversity and project management
• E-tools (submission of quotation, drawings, invoices)
• Innovation and creativity embedded in the products
• Continuous improvement
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
23
Pre-qualification of Suppliers
• Pre-qualification involves gathering and evaluating relevant
information from companies who have been identified as
prospective suppliers
• Initial list created based on:
– Client suggested suppliers
– Procurement Supplier Database
– Past performance by Procurement or Project personnel
• Formal pre-qualification process is conducted where suppliers
are unknown or where the risk profile of the package warrants
• Process will contain some or all of the following:
– Prequalification questionnaire
– Shop audit
– Financial audit.
11/2011
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Pre-qualification Process
Prepare and Issue Pre-qualification Questionnaire to
Suppliers
Receive and Distribute Pre-qualification Questionnaires
Perform Assessment / Analyse Received Information
Prepare and Issue Evaluation Report for Review and
Approval
Update Pre-qualification Register
11/2011
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Pre-qualification Questionnaire
• Includes the following components
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Certificate of incorporation/founding statement
Structure and organizations
Resources: Names and listing of experienced key personnel in company
Scope of services
Subcontractors and consultants
Health and Safety Policy and Performance: Safety statistics for the last three years
and evidence of applicable safety certification
Quality Assurance Management and Control: ISO 9001 certification, quality policy,
quality trainings
Financial: Information related to the organization’s financial standing
Insurance
Employee/ industrial relations (site work only)
List of similar contracts undertaken in the past three (3) years and contactable
references
Equipment and manpower availability
Recent audits of existing sites and/ or manufacturing facilities
11/2011
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Shop Audits - Visit Suppliers’ Premises or Current site
• The following are examples when a shop audit may be
required:
– A review of supplier design capabilities (drawings, equipments, software,
manpower, etc.)
– When requested by the client/project
– Supplier being prequalified is in a “high risk” country
– Supplier being prequalified for a high risk, critical equipment package
– The pre-qualification questionnaire is not sufficient to assess the supplier’s
capabilities
11/2011
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Shop Audits - Verification points
• The pre-qualification shop audit may include the following
verification points:
– Pre-qualification questionnaire responses
– Review original documents/ certificates (ISO, welding qualification,
etc.)
– Key employee interviews
– Production equipment and technology available and condition
– Shop capacity and workload
– Observe working conditions
– Observe surrounding areas (access roads and waterways)
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
29
Vendor Quality Surveillance (VQS)
• Involves processes, people and tools to ensure:
– Manufacturing, inspection and testing activities performed
by vendors/sub-suppliers are carried out in accordance with
project requirements
– All materials and equipment, components and quality
records are supplied according to purchase order or contract
requirements
11/2011
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Vendor Responsibilities
• Vendors to ensure that supplied products are:
– Compliant with contract technical requirements
– Compliant with contract codes and standards
– Of good workmanship, defect free and fit for use
• Vendors are obliged to meet contract requirement by:
– Applying their quality management systems
– Using qualified processes, personnel and equipment
– Using qualified sub-vendors
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
32
A Major Resources Boom is Underway Including in
The Mining Industry
Price declines
of a century
were reversed
in about a
decade !
11/2011
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A Review of Top Countries by Mining Investments
Shows the Global Nature of the Boom
No.
Country
1)
Australia
2)
Canada
3)
Chile
4)
Brazil
5)
Mexico
6)
USA
7)
Colombia
8)
Botswana
9)
Peru
10)
Ghana
• The top-10 countries
span 4 continents
• Canadian leadership in
mining will help drive
innovation in Canadian
equipment providers
* Behre Dolbear 2012 Rankings of Top Countries by Mining Investments
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
35
High Costs Are Not Necessarily a Barrier to
Competitiveness in Exports
Exports by Country
(US$ Billions)
China
USA
Germany
Japan
Netherlands
France
Korea
Italy
Russia
Belgium
$823
$661
$596
$555
$523
$522
$477
Canada (13)
$452
$1,898
$1,480
$1,472
Per Capita GDP
(US$)
$5,445
$48,442
$43,689
$45,903
$50,087
$42,377
$22,424
$36,116
$13,089
$46,469
$50,345
* Source: WTO Stats 2011, worldbank.org
11/2011
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Canadian Exporters Can Adopt Various Strategies
to Develop Overseas Markets
Strategy
Examples and Comments
Follow the major
Canadian companies
• Build strong relationships with the mining
major companies in Canada
• Follow the major companies as they
expand into overseas mining ventures
Build close relationships
with the EPCMs
• Hatch has a global presence
• Getting access to the Hatch supplier
database (GPI) provides suppliers access
to global opportunities
Sell directly into overseas
markets
• Definitely a viable strategy
• Will take time to build relationships
11/2011
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However, Canadian Exporters must Always
Proceed with Caution
• Different engineering standards
• Currency fluctuations
• Cultural diversity, e.g., “yes” is not a definite “yes”, as per North
American culture.
• Different Legislation (Local/International); Local legislation may
limit business opportunities. e.g. Selling Ikea Swedish
Meatballs in India is prohibited
11/2011
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Agenda
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
39
Agenda
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•
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
40
Hatch Global Operations
How can a supplier
from one location …
CANADA
Calgary, Alberta
Halifax, Nova Scotia
Montréal, Québec
Niagara Falls, Ontario
Oakville, Ontario
Saskatoon, Saskatchewan
St. John’s, Newfoundland & Labrador
Sorel-Tracy, Québec
Sudbury, Ontario
Toronto, Ontario
EUROPE
Vancouver, British Columbia
London, England
Winnipeg, Manitoba
Moscow, Russia
St. Petersburg, Russia
… get business from
other locations?
CHINA
Beijing
Shenyang
Shanghai
INDIA
USA
Amherst, New York
Baltimore, Maryland
Boston, Massachusetts
Buffalo, New York
Cleveland, Ohio
Denver, Colorado
Houston, Texas
Millburn, New Jersey
New York, New York
Pensacola, Florida
Phoenix, Arizona
Pittsburgh, Pennsylvania
Sacramento, California
San Diego, California
San Francisco, California
Seattle, Washington
Tampa, Florida
New Delhi
MIDDLE EAST
Abu Dhabi, UAE
Al Khobar, Saudi Arabia
Sohar, Oman
SOUTH
AMERICA
Antofagasta, Chile
Belo Horizonte, Brazil
Lima, Peru
Rio de Janeiro, Brazil
Santiago, Chile
São Luís, Brazil
São Paulo, Brazil
INDONESIA
Jakarta
NEW
CALEDONIA
SOUTH AFRICA
Johannesburg
Pretoria
Cape Town
Nouméa
AUSTRALIA
Brisbane
Gladstone
Mackay
Melbourne
Newcastle
Perth
Townsville
Wollongong
11/2011
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Characteristics Of a Hatch “Preferred” Supplier
• Technically capable
• Competitiveness (price and delivery)
• Proven processes and track record in:
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Health & Safety
Quality Management
Sustainable Development
Supply Chain Management
• “Easy to do business with”
11/2011
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Process: Becoming a Hatch “Preferred” Supplier
Supplier ratings / recommendations
GPI Global
Team
Supplier performance feedback
Project
Teams
Supplier information
Suppliers
11/2011
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Process: Becoming a Hatch “Preferred” Supplier
120 fields populated
online by suppliers
Key docs uploaded by
suppliers
Supplier contact
information
11/2011
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Process: Becoming a Hatch “Preferred” Supplier
Sourcing Families
Sourcing Categories
Macro Sourcing
Families
11/2011
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Sales
breakdown
Feedbacks Qualifications Credentials
Exchange Rates Variations Against USD; Ref=1 on March 2008
China Vendor Risk
Quality
management
Labor costs per hour in USD - Source Economist Intelligence Unit (January 2009)
1.1
40
1.05
25
35
1
0.95
Engineering
30
0.9
USD
0.85
0.8
2009
2010
20
0.75
20
15
5
mmunication
0
15
0.7
Planning and
control
10
25
Employees
qualification
10
0.65
Safety, CSR and
SD
5
0.6
20
08
/
20 03
08
/
20 04
08
/
20 05
08
/
20 06
08
/0
20 7
08
/
20 08
08
/
20 09
08
/
20 10
08
/
20 11
08
/1
20 2
09
/
20 01
09
/
20 02
09
/
20 03
09
/0
20 4
09
/
20 05
09
/
20 06
09
/
20 07
09
/
20 08
09
/0
20 9
09
/
20 10
09
/
20 11
09
/
20 12
10
/
20 01
10
/0
2
T&Cs compliance
In
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Ja
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C SA
an
a
G da
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m
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0
Financial health
Before
mitigation
After
mitigation
P
Macroeconomic Supplier
intelligence intelligence
Process: Becoming a Hatch “Preferred” Supplier
Countries
Logistics
Costs
Exchange
Rates
Labor
Rates
Country
Risks
Hatch Prime Contact
for Supplier ABC
Supplier ABC Ratings
Supply Quality Offering
Geographical competitiveness
11/2011
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Example: “Preferred” Supplier Recommendation
(1/2)
Hatch “preferred” suppliers are systematically recommended to all
Hatch projects located where a supplier is rated as competitive
11/2011
4
47
Example: “Preferred” Supplier Recommendation
(2/2)
11/2011
4
48
Eugene Iacob
Procurement Strategies Director
eiacob@hatch.ca
Raj Shenoi
Global Sourcing Director
rshenoi@hatch.ca
11/2011
49
Agenda
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•
•
•
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About Hatch
Health and Safety
Quality
Service Sectors
Hatch Procurement Overview
Pre-Qualification of Suppliers
Vendor Quality Surveillance
Tremendous global opportunities in the mining industry
Canadian companies have opportunity to be leaders
Here is how Hatch can help
Questions
11/2011
50
Questions
11/2011