Vendor Held Stock VHS Presentation to SACAFMA General

Vendor Held Stock – VHS Presentation to: SACAFMA General Meeting on: 19 September 2003 Presenter: Andre Steynberg Materials Controller

Vendor Held Stock Standard System Feature Automated Transactions No work arounds

Vendor Held Stock Commodity: Hydraulic Pipes/Fittings Contracted Supplier Problems: v Variety of items v Inconsistent demand patterns • No of stock items • Transaction volumes • Reducing risks • Service levels

Vendor Held Stock Purest definition: Routing of demands for specific goods/items directly to supplier warehouse on warehouse requisitions rather than to the mine warehouse

Vendor Held Stock Purest definition – Transaction flow Supplier (town) Goedehoop (mine) W/Reqn Supplier warehouse End user *Goods Mine warehouse ** Goods Mine accounts Supplier accounts Invoice Payment * Delivery lead time ** Double handling

Vendor Held Stock Our definition: Routing of demands for specific items directly to an on site supplier warehouse on warehouse requisitions…

Vendor Held Stock Our definition – Transaction flow Supplier (town) Goedehoop (mine) On site supplier warehouse W/Reqn *Goods Mine warehouse Copy of W/Reqn Invoice * No lead time & no double handling Mine accounts Payment Supplier accounts

Vendor Held Stock Procedure – How to get going Supplier Mine • Provide building (warehouse) • Sub warehouse – Vendor specific • Contract – items/goods • Create item codes – Flag: VHS • Network printer • Contract – services (staff) • Stock on-site warehouse • Staff as required (24 hours/day)

Vendor Held Stock Simplified Process Goedehoop Accounts W/house End user On site w/house E E Print W/Req Create File (monthly) ACQUIT *P/Slip File (monthly) P/Slip - Costing@ standard price = contract price System report listing * @ contract price Town premises P/Slip Action Issue item (signature) P/Slip Vendor Match invoice Payment P/Slip @ Contract price Monthly composite invoice + p/slips (copies) Composite invoice 4 X P/Slip

Vendor Held Stock Accounting Entries: • When acquiting warehouse requisition DT Cost CT Vendor suspense account Individual transactions

Vendor Held Stock Accounting Entries: • At time of payment DT Vendor suspense account CT Cash/Bank One monthly total

Vendor Held Stock Ø END USERS Mine Key benefits: Availability – place of work v Back up stock - budget control, approval procedures etc. Zero stockholding Minimal transport cost v Statement transactions No capital lay out P/Slip (mine) = POD No re-ordering process * Less paper costs No receiving process No physical control Ø ACCOUNTS PAYABLE One only: monthly invoice/ receipt matching Less: Document capturing Statement recon. Transactions ACCOUNTS One invoice per month No redundancy risks No stacking/binning WAREHOUSE Minimal paper work - 24 hours Ø WAREHOUSE Supplier * Less printing costs v GENERAL Long term business relationship (partnering) ? ? Mine

End of presentation Any questions? ?