Procurement as a development tool
In 2002 Rio Tinto joined with other mining companies to establish an independent online procurement marketplace (Quadrem) for the purchase of goods and services for the Group. This serves the needs of both suppliers and buyers by delivering supply chain efficiencies.
The move to global systems provides opportunities for a consistent approach to the consideration of sustainable development aspects in the purchase of goods and supplies. The process allows consistent minimum standards to be identified and improved standards targeted specifically to types of goods or contracts for work.
The system allows us to identify the priority areas for different aspects of health, safety, environment, climate change or community. Specific clauses that must be met can then be developed as well as performance measures if the contract is to be sustained or renewed.
The change in global procurement has potential implications for purchasing at the local level. Operations will be able to access supplies from a more global market and this could impact upon local suppliers. This change is occurring across the globe and is not specific to Rio Tinto's procurement developments.
We recognise that some local suppliers who do not have the access or the knowledge to get involved in the e-marketplace may be left out. However with the appropriate technologies this also offers potential opportunities for local suppliers to connect to this broader virtual marketplace.
In this way suppliers to operations can potentially extend their customer base beyond traditional geographic boundaries. A prerequisite, however, is that more advanced business skills may have to be developed to enable suppliers to achieve the potential afforded by these wider opportunities. The development of these skills is a component of business enterprise development and education programmes in our communities.
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Our procurement process
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