RTIO Critical Order Communication. Context –In 2013 a focus on controlling hotshots /express freight was implemented following an almost year long engagement.

RTIO Critical Order Communication

Context

– In 2013 a focus on controlling hotshots /express freight was implemented

following an almost year long engagement process to manage the costs

through operations.

• Little impact was evident in terms of a change in costs and items that

were being express freighted

• Action implemented to escalate approvals to manager level via

Serv-U/RTTMS

– Since then Goal 250, a plan to significantly reduce spares inventory to $250M

by the end of 2015, with $325m to be achieved by June 30, 2015 was

launched

– As part of this work a significant focus was placed on warehouse managed

parts and adjusting the stock max levels based on a set of stocking principles

primarily aimed at distinguishing inventory carried based on lead time,

criticality and “planned versus unplanned” nature of the work.

– As part of this the critical order process has been raised as a potential issue

to operations that result in undue delays attributable to a number of different

factors

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Purpose

The purpose of this work was to:

• Understand current critical order process end to end, in full.

• Identify the Gaps: Define and Understand the issues being experienced by the

users and participants in the process.

• Generate solutions: Prioritise to maximise the effectiveness of the process for the

end user, while ensuring appropriate financial controls and accountability remain

in place.

• Formulate an action plan with accountable and targeted delivery.

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Design Identify the issues Implement Measure

and track

• Define current end to end process

• Develop tools & templates

• Finalise core project teams

• Identify stakeholders

• Communication plan • Risk Register• Map and confirm the

current critical order process from End 2 End

Core Project Team

Oct 2015

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• Problem analysis - Complete brain storming session

• Identify areas of improvement

• Develop actions to be completed

• Design solutions• Allocate team

responsibilities

• Input gathered/collated from working team

• Improvement Plan finalized

• Reports for tracking of results

• Conduct team meetings

Core Project TeamSite teamsStakeholders

Nov 2015

• Understand IS&T timelines

• Develop Communication packages

• Implement BPO Process improvements

• Conduct team meetings to ensure deliverables are met

• System upgrade• All communication

packs gathered and sent to stakeholders

• BPO process updated with new requirements

Core Project TeamIS&TStakeholders Site teams

Dec 2015

• Follow site reviews to determine impact

• Review actions progress and support

• Report site successes & learning's

• Track impact and reengage if required

• Baseline Data• Track to targets• Celebrate success• Ongoing reporting

Core Project TeamSite teams

Q1 2016

High Level Plan, Output and Actions - Phase 1

Communication Context

To help improve and understand the current process & highlight the nature of

improvements to date -

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Critical Order Process Improvements –Phase 1

Centurion Information and Contact Details

Westrac Process

RTTMS Change

Critical Order & Centurion Flow Chart

From: To:

Confusion of process flow

Clear understanding

Slow response to requested upgrades

Increased head count and improved mail box process

Lack of clarity & who to contact for issues

Clear guide lines, accountability and time/cost expectations

Why are they different from other vendors

Clarity of Westrac process

Frustration on time taken for approval and lack of options to modify approvers

More flexibility for site users, which in turn will improve the time for approval

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Process Flow – (confirmation of current flow chart )

Click for Centurion Express Freight and Hot Shot Process Flowshere

Staffing Monitoring Prioritization• Additional resources being

added to the Critical Order team. Currently one is in training. The goal is to have a minimum of 4 dedicated resources. (Completed)

• Buyers are being cross trained to support Critical orders. (Completed)

• Cross regional training to give BPO even greater flexibility to ensure adequate staffing levels. (This is still in the proposal phase)

• Creating a Critical Order lead buy team role. This position will be accountable to constantly monitor the urgent freight inflow to ensure adequate staffing (Completed)

• Developing reports to analyse the Critical Order inflow across different time slots including weekends (end Q1 2016)

• Categorizing Critical Orders the emails / Identification and prioritization

• “High Importance” priority implemented for critical order responses by the Critical Order Team (Completed)

Critical Order Team Management Improvements

• Improved turn around on responses from Vendor/Site

• Overall improvement in response time

• Greater flexibility to manage team support levels

• Sufficient resourcing during peak periods

• Team leadership at all times allowing corrective measures can be initiated immediately

• Trends analysis for greater team management levels

• Identification and prioritization of Critical Order mailbox

• Urgent responses actioned in a more timely manner

Action

Expected Outcome

The goal is to have every Critical Order actioned within 60 minutes

Centurion Transport Options

Hot Shot requirement also needs to be logged on the Centurion website

Westrac Critical Orders

It is too late to upgrade the freight method if Westrac have received the PO.

XA PO has already generated and been accepted by Westrac system. The Critical Order team will still upgrade the order, but as the PO has been received, picked and packed Westrac will advise it is too late to change the freight method.

The TNT road express load cuts off at 4.00pm. Orders placed after this time will not travel until the following day. TNT pick up orders throughout the day with the last pick up departing at 5.30pm.

üCritical Order received as a PR. The Critical Order

team convert the PR to PO with the upgraded freight method and ETA.

For Westrac PR - to ensure no system conversion, the Requestor should change the buy group to 309.

• Westrac have a very high level of system automation within their business, which means that an order received is picked and sent to the dispatch yard, within 5-7 minutes of receipt.

• This means that an existing purchase order cannot be upgraded to a critical order.• Making it imperative that potential “Critical Orders” for Westrac remain as PR’s (purchase

requisitions) until actioned by the Critical Order team.

Progress on open actions

• RTTMS- waiting on IS&T implementation to add the option to select a manager for

approval : Delivery: Estimated end January 2016.

• Communication sent to all vendors highlighting the importance of returning

information on parts availability.

• SSC site email address to be added to email communication so all SSC can track

progress.

• Reporting tool available to stakeholder on request to identify trends . (Contact

Nick Spada for more information)

• Phase 2 of Critical Order End 2 End process will commence early next year.

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Microsoft PowerPoint Presentation

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Frequently Asked Questions

There are two different urgent upgrade processes in place, which one should use?The RTIO Critical Express orders process is for urgent requirements during business hours.(Monday-Friday 6am-6pm)The Emergency Purchase Order process is for urgent requirements outside normal business hours including weekends

Why do we need to complete a RTTMS?The Business decided this control is needed to ensure no unjust Company expenses are committed without Manger approval. The RTTMS allows improved visibility of exceptions based on request and consideration by manager based on related production impact.

What is the escalation path for the off shore Critical Orders Team? If there delays in actioning please refer to link http://rtio.riotinto.org/BusinessServices/ProcurementGSB/DisplayContent.aspx?SectionID=213&Trail=&TabID=1

What hours are the RTIO Critical Orders operating hours?Please note that Critical Order team operates from Monday till Friday between 6:30am and 6:30pm (WA standard time). For any urgent requirement outside this window; please refer the emergency purchase order (EPO) process.

I urgently require a service order to be completed, do I need to use this process?No - Urgent service order need to be communicated to the Buyer to complete. Critical Order relate to parts that require express freight

Frequently Asked Questions

I just need a PO created ASAP, do I use this process ?

No - Critical Order Process is for freight upgrades only.

Do Centurion Good Receipt these orders?

No - The goods receipt must be completed by site, as these order do not go via Centurion depot.

Why are Westrac order completed differently?

Westrac are an integrated Quadrem vendor. This means they have a different highly automated

system for processing orders that enables orders to be received and ready for despatch within 7

mins.

I urgently require a service order to be completed, do I need to use this process?

No - Urgent service order need to be communicated to the Buyer to complete. Critical Order

relate to parts that require express freight

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Why do I need to go to the Rio/Centurion portal to request a Hotshot?

The Hotshot Portal is a dedicated 24/7 service whereby goods are picked up from a supplier and

travel directly to site.

The form detail includes email addresses – all receive updates

Site must nominate contact details for delivery on site for both safety and access purposes

Generally the service arrives at night – no warehouse people

It’s not reliant on Supply personnel – although most sites action Hotshots thru SSC’s

How do I access the Centurion portal ?

The Rio/Centurion portal is available to all RTIO employees in Prospect. Click on my Role and

search for the link.

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Frequently Asked Questions

How do I apply for access to the Rio/Centurion services on the portal

To access the services within the Rio/Centurion portal, you will need to register your Prospect

logon details.

This can be done by emailing your details, including your SAP number to:

[email protected]

How long does the Critical Order process take?

This depends on how a number of factors.

1. Once Manager approval is completed in RTTMS the Critical Order Team receive a notification

to action a Critical Order request. (data concludes this take ~7 hours. Suggestion - contact

Manger first so they are aware of workflow)

2. The Critical Order team endeavour to action all requests within a 1-2 hour time frame

depending on day.

3. Once the Critical Order is created the vendor is asked to respond immediately to all

stakeholders if there will be delays.

4. Centurion will organize shipping as soon as the vendor has notified them that the goods are

ready for pick up.

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Frequently Asked Questions