Minera San Pedro, a small mine producing quartz that is necessary for the smelting process at our Chagres facility, is one of the companies supported by our supplier development programme in Chile.It is important to us that our suppliers share our values. Our Good Citizenship Business Principles incorporate safety, integrity, sustainable development, labour rights, community development and human rights; and we hope to see these qualities championed among our partners.
However, we realise that there can sometimes be a gap between the standards and skills of local small and medium-sized enterprises (SMEs) and the requirements of international organisations like Anglo American. While there are typically a number of challenges to bridging this gap and integrating SMEs into our global supply chain, we believe the long term economic and social benefits outnumber the obstacles.
For this reason, we launched supplier development programmes (SDPs), which are aimed directly at supporting SMEs to reach the necessary standards required by our operations and promoting sustainable development across our entire supply chain. At our copper operations in Chile we have already seen the benefits of the programme.
Since 2007, SDPs driven by our Mantoverde and Chagres operations have aimed to develop economic, social and environmental performance among suppliers. Working alongside the Chilean Economic Development Agency and the participating companies, we set about improving efficiency, productivity and quality through a combination of training, incentives and continued support.
At Mantoverde – with the support of the Atacama Region Development and IXC Consultores – the 13 companies participating in the programme have already attained a general compliance level of 78% with action plans, management commitments and progress assessments. Six companies have also adopted a service-management model and quality-management system for SMEs in accordance with Chilean national standards.
At Chagres, we have been supported by the Business Innovation Development Centre of the Association of Companies in the Valparaiso Region and also called on the advice of Brains Consulting & Research to develop and implement the SDP.
With 18 SMEs participating in the programme, it was once again necessary to identify the key areas of focus. As such, we targeted: improving management systems to increase business maturity and raise levels in quality, safety, occupational health and environment standards; implementing enhanced communication and co-ordination systems between suppliers and our operations; and providing definitive action plans to improve overall services and supplies.
As with Mantoverde, participating companies at Chagres have embraced the initiative and 83% have now achieved a ‘satisfactory’ level of compliance with the programme, while the remaining 17% have attained a ‘basic’ level of compliance.
More recently, implementation of the ISO 9001 quality model certification for some of the participating SMEs has begun and will be completed during 2011. In addition, business management skills, such as personnel management, were also delivered to all SMEs.
In Chile, we have been delighted with the outcomes of the SDPs so far and these positive examples will go towards generating further successes, as they form part of the new Anglo American Supplier Development Framework that will be piloted at certain operations in 2011.
Building partnerships and developing strategic relations is integral to our business and when this creates value for all parties, it can only lead to a more positive business environment.