ENERGY & RESOURCES

SUPPLY MANAGEMENT EXPERTISE

IN DYNAMIC MARKETS

INNOVATING SUPPLY MANAGEMENT

The supply chain process to remote
PROCESS TO ENHANCE OPTIMIZATION sites is very complex. It involves many
From dealing with extreme climatic conditions, to a complex supply stakeholders making it challenging
chain, one of the biggest challenges operating in the remote far- to get the right product at the right
eastern region of Russia is not only getting all supplies transported place, right time and at the right cost.
during the short delivery window but ensuring the quality of the At Sodexo, we do not settle for status
products upon arrival meet Sodexo’s high standards to best serve the quo. Our teams continue to further
residents onsite. develop our procurement capabilities
and enhance our supply chains to
Since 2010, Sodexo has been providing foodservices, cleaning, exceed our clients’ expectations and
technical maintenance and accommodations services for Kinross’s
drive added-value.
remote mining sites located in the Chukotka region of Russia as
well as their regional headquarters in Magadan. Our dedicated team
understands the importance Kinross places on operational excellence OUR CAPABILITIES
and takes an active role in the supply management process to ensure • Develop and manage supply chains
process and cost optimization. remotely

Working side by side with Kinross, our procurement and logistics • Continuous Supply Chain improvement
experts in Russia established an innovative approach to the supply focused on identifying opportunities to
chain design that has significantly increased savings, improved improve efficiency and reduce cost
efficiency and enhanced consumer satisfaction.
• Procurement expertise in dynamic and
unpredictable markets

INNOVATIVE APPROACH TO DRIVE VALUE

Strategic sourcing
partnering with strategic
suppliers to produce unique
tailored-made goods to
meet long lead time
Agile procurement model Optimization of delivery Rigor in quality and HSE
allowing to ensure cost lead time to reduce costs standards throughout the
optimization in volatile and meet variable departure entire supply chain process
markets with unknown price dates from sea ports from the production of
and availability of goods goods to pre-shipment
inspections to ensuring
quality control during
transport
STRATEGIC SOURCING
TO IMPROVE PRODUCT QUALITY
The total delivery time for goods is over
7 months spanning over 11,500 km,
which raises the shelf-life requirements
for goods to 24 months. The local
challenge is most product categories are
restricted to 6-12-month span under
Russian regulations. So, we innovated
our sourcing approach and partnered
directly with suppliers to tailor make
goods with a 24-month shelf life, in
particular for protein foods as it is a key
category in our procurement needs.
Not only did we focus on a longer shelf
life – but also insisted on improved
quality and excellent Health, Safety
& Environmental (HSE) compliance in
operations. In selectively building our
supplier network, we were
able to provide better
quality goods with a
significant reduction in
risk for potential foodborne
diseases. Moreover, we
were able to source 65%
of the goods locally
St Petersburg
compared to the
previous average Suppliers
of only 35%.
Suppliers
ENSURING EXCELLENCE
ALONG THE 11,500 KM JOURNEY
Another key challenge in operating
on the remote locations is ensuring
consistent product quality along the
long delivery route under extreme
climatic conditions. The only option to
replace defective products once onsite
is by air shipment at an exorbitant
price. Our solution evaded this costly
risk by implementing a new product
testing process to ensure quality
before being shipped. Then taking a
step further, we installed sensors in
the refrigerator containers with real-
time monitors to prevent cargo losses
and in parallel retain product quality
as well as shelf life.
Over 11,500 Km / 7 months
Pevec Port
Kinross remote sites
Magadan
Arkhangelsk Port
Moscow
Suppliers Vladivostok
Suppliers
OPTIMIZING DELIVERY ROUTE
TO DRIVE SAVINGS
As Kinross was incurring significant
logistics costs in shipping empty
containers to our distribution centers, we
worked closely with Kinross to optimize
the logistics network to increase savings
for both Kinross and Sodexo.
First off, we reorganized the distribution
process to directly deliver some goods
to the seaport to avoid the empty
container shipment costs– a $100K cost
savings. We also optimized the cost
of goods delivered by buying directly
from the manufacturers at a negotiated
volume discount and transporting them
by heavy vehicle at a lower price. This
reduced the cost of goods delivered by
6.5% per ton.
April 2019 - © Kinross Media Library - Adobe Stock
Suppliers