Specifics of Sales and Operations Planning in gold-mining companies

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MAGAZINE №2 (73) April 2016

AUTHORS ERMOLINA M.V.NOVIKOVA A.Y.

CATEGORY  Corporate logistics industrial companies Logistics integration and coordination Planning the supply chain Modern concepts and technologies in logistics and supply chain management 

ABSTRACT

An integrated volume planning in the form of sales and operations planning is considered as a default universal method applicable to any business in any industry. Meanwhile, numerous researches on implementation of this process focus mainly on the downstream industries, such as automotive, FMCG etc, leaving the upstream extractive industries without due attention. But the latter industries also need a managerial mechanism allowing foreseeing and reacting to the expected imbalance between forecasted demand and resources available to fulfill it.
Thus, this article reviews necessity and specifics of sales and operations planning in gold mining holdings. The specifics include, firstly, the rules of the demand formation and prolonged supply deficit on the market, and secondly, the need to involve numerous business units of vertically integrated business structure into the planning process. Based on the specifics revealed an aggregated model of planning process is proposed and main questions to deal with on each step of the process are articulated. The model proposed differs from the standard one by (a) the stages sequence: particularly, new product and demand planning are proposed to be held in parallel to each other, and operations planning starts from the definition of mining volumes and only then procedes to the processing capabilities; (b) planning objects on each stage: for instance, new product planning should focus on new gold ore minings, and demand planning – on forecasting of the price rather than demand volume; (c) an additional planning contour on the level of business units, in line with the main process flow on the corporate level. 

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