Sustainability in Rio Tinto's Supply Chain

Rio Tinto Limited, a world-class mining company, has well-established its supply chain and ensures sustainability throughout operational activities. The company engages with suppliers, customers, and government support to ensure smooth processing of activities. Rio Tinto sources materials globally while ensuring balance between sustainability and responsibility. The company's business practices show greater transparency regarding the minerals and metals it supplies, making responsible supply chain practices more sustainable.

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Supply Chain Management
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Supply Chain Management 1

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Table of Contents
Introduction......................................................................................................................................2
Overview of the Business................................................................................................................2
Supply Chain/Logistics Management from the Source to the Customer........................................3
Procurement.................................................................................................................................3
Operational Activities..................................................................................................................4
Information..................................................................................................................................4
Inventory......................................................................................................................................4
Transportation and Shipping........................................................................................................4
Linkage Between the Company Activities and Supply Chain Theories..........................................5
Sustainability Throughout the Supply Chain...................................................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

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Introduction
Supply chain management has been considered as one of the most crucial tasks as it
includes all processes that transform raw materials into final products (Fredendall & Hill, 2016).
Supply chain management encompasses the active rationalizing of supply-side activities which
enables a company to maximize its customer value as well as attain competitive edge in the
industry (Swanson et al, 2017). In other words, it involves a broad range of activities that are
essential to plan, control and execute a product's flow. The overall process ranges from procuring
raw materials to distribution of finished products to the customers in a rationalized manner.
This report represents an in-depth analysis of the supply chain management operations of
RIO Tinto Limited, a dual listed company on the London Stock exchange and Australian Stock
Exchange (Rio Tinto Limited, 2017). RIO Tinto Limited is one of the leading mining companies
in the UK market (Rio Tinto Limited, 2017). The overall analysis of the supply chain of the
company will help in evaluating the strengths and effectiveness of the management operations,
which makes it the leading organization in the industry. In addition to this, a brief discussion on
the linkage between the company activities and theories on supply chain management and
sustainability of the supply chain management has also been done.
Overview of the Business
Rio Tinto Limited is one of the leading mining companies in the world. The primary
business of the company is finding, mining, as well as processing the mineral resources, that
supplies significant metals and minerals so as to meet increasing needs of the global market and
contribute towards the improvement in the living standards of the people. According to the
reports Rio Tinto Limited (2017), the business activities of the company is spread all across the
globe, however it is majorly represented in North America as well as Australia. Beyond these
territories the business has also expanded in Asian, South America, Europe as well as in the
southern part of Africa. The five main product groups of the business are diamonds, iron ore,
copper, aluminum, and minerals & energy. The business is carried on with two support groups,
namely Technology & Innovation as well as Exploration (Rio Tinto Limited, 2019).

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The company has strongly responded to the increasing demands of society with respond
to greater corporate responsibility, so as to overcome the challenges posed by both sustainability
together with climate change. In addition to this, the corporation has also made a strategic
commitment towards sustainable development. Moreover, from the reports of the company it has
been found out that in operations, they try their best to make effective use of natural resources,
limit Greenhouse gas emissions, energy, as well as minimize bad effects on sources of land,
water, biodiversity by using a significant portfolio of hydro, nuclear along with other renewable
power sources in energy mix.
Supply Chain/Logistics Management from the Source to the Customer
Supply chain and logistics management, process plays a key role in running major
operations for almost every company. According to the point of view of the scholar Ross (2016),
supply chain management embraces designing, scheduling, executing, controlling, as well as
monitoring of supply chain activities. Rio Tinto Limited has not only established an appropriate
supply chain which involves a wide range of activities from production using raw materials to
delivery of the offerings to the customers (Rio Tinto Limited, 2019).
As per the reports of the company, in the connected world of its widespread trade,
materials, before reaching the customers, passes through a number of hands (Rio Tinto Limited,
2019). In addition to this, it has been noted that managing the impacts of products across their
whole life cycles demands that it is essential for the company to work together with its material
suppliers. According to the point of view of the scholar Svensson (2007), a collaborative
approach towards establishing an appropriate supply chain also provides immense opportunities
for, co-operation, innovation as well as economic development.
The supply chain of the company is generally non-traditional because of the locations and
the environment in which it operates. In addition to this, in many cases the company needs to
design the required supply chains from beginning. The company also ensures that its supply
chains comply with global standards (Rio Tinto Limited, 2019).
Procurement
The procurement process at Rio Tinto Limited has been set up in such a way that
leverages the international buying power of one of the leading mining and metals corporations in

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the world. From the reports of the company, it has been found it that the organization maintains
flexibility as well as agility that is essential to support the needs of individual product groups
along with the business units, and economic development of communities where its carries out
its operations (Rio Tinto Limited, 2019).
Operational Activities
The operational activities include loading and haulage, drilling and blasting, process and
wash plants, processing and stockpiling etc. (Rio Tinto Limited, 2019). In addition to this, each
fleet at the mine site constitutes trucks long with the loader units. The objective of the company
for safety is zero harm to the employees and staff. The operational activities are carried out at the
mining site itself and sometimes ta the main operational units. The company has well-recognized
that healthy workers are essential for the business growth and also accept as true that, for
creating harmonious workplace it is essential to respect the employees. Thus, the corporation has
developed standard policies and guideline related to its operational activities as listed above and
also ensures occupational health, safety as well as human rights.
Information
The company has very well established an internal information system. It has shifted its
enterprise resource planning (ERP) and information management systems (IMS) to run in the
public cloud (Rio Tinto Limited, 2017). Such a transformation completely changes its IT
strategy. It has enabled the company in cost-saving and proper management of the overall
operations. The information can be easily accessed from anywhere and there are less chances of
data loss. In addition to this, it also provides scalability through big data analysis.
Inventory
The inventories are managed through selected mine operations place. The iron ore, and
other metals that are collected are firstly listed down into the database with proper information
and testing reports and thereafter carried down to the processing operation.
Transportation and Shipping
Transportation and shipping of the products is one of the most crucial components of
supply chain management. According to the point of view of the scholars Golicic et al (2010), an
organization with a responsive, economical transportation network, becomes competent enough

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to implement major strategic changes so as to reduce costs as well as increase customer service
levels. As a critical supply chain partner, marine services add value to Rio Tinto’s mining
businesses. It provides international shipping services and acts as the central repository of
maritime expertise (Rio Tinto Limited, 2019). In addition to this, it has also been reported that
Rio Tinto ensures high operational and safety standards, in third party ships as well as across all
the Marine's fleet owned by the company.
The company has well maintained its marine and logistics abiding by the rules and
regulations of the, the freight markets as well as other regulatory environment, that combines all
shipping activities in one business unit. With its activities, it drives both commercial and
operational competence. The ultimate customers of the company are large auto industry leaders
and the materials are delivered to them through these transportation and shipping facility.
Linkage Between the Company Activities and Supply Chain Theories
The activities of the company mainly involve extracting aluminum, iron ore, copper,
diamonds, and minerals. From the resource-based view, it can be said that organizations are able
to attain competitive advantage through its tangible and intangible resources as well as core
capabilities (Wu et al, 2006). From the reports of Rio Tinto Limited, it has been found out that
the firm has strong financial resources along with innovation capabilities and supportive
management resources that provides immense support to the organization, thereby enabling it to
develop a flexible and value creating process design. In addition to this, the company’s stratum
management approach, i.e. operational capability, makes it much more agile and flexible to face
harsh operating environment. Stakeholder theory emphasizes that an organization must take into
account all the factors that leads to maximum benefit to its stakeholders (Carter & Liane Easton,
2011).
The theory underlines the interrelations between business organization and its internal
and external stakeholders such as employees, suppliers, customers, shareholders, and
communities (Carter & Liane Easton, 2011). Rio Tinto is also concerned about environmental
and social issues and socially conscious about its stakeholders. It takes into consideration their
rights and interests and trying to get benefit from integration and coordination of all its suppliers,
customers as well as government support for ensuring smooth processing of operational
activities. In addition to this, as the supply chain activities of the company involves procuring,

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sourcing, logistics and (transportation and shipment) and marketing, the management of the firm
ensures to engage all its stakeholders, particularly close suppliers and customers for value driven
growth through supply chain synergies (Rio Tinto Limited, 2019).
Sustainability Throughout the Supply Chain
At every stage of supply chain, Rio Tinto Limited is highly committed towards managing
the risk sustainably as well as deliver positive value to its shareholders. With its world-class
assets and supply chain, the company has contributed towards sustainable development. The
company is already familiar with its luxury supply chains through the silver, gold, and
diamonds mines. The company has greatly progressed towards adopting sustainable supply chain
process with combined efforts of all its partners to show benefits through increased engagement
with them. In addition to this, the reports of the company provide a clear framework for how the
company conducts its business with sustainable practices. Moreover, the business practices of the
firm show greater transparency with regard to the minerals and metals its supplies, that makes
responsible supply chain practices more sustainable and critical to carry on with the operations.
As per the reports, Rio Tinto sources from all across the world so as to access the best
value, along with ensuring appropriate balance of sustainability as well as responsibility to
participate actively in the communities for sustainable development, and act in an
environmentally friendly manner (Rio Tinto Limited, 2017). As a result of its efforts, by means
of working with the suppliers along with the customers, supporting economic growth, as well as
ensuring proper management of the impacts of its products across their life cycle, the company
has increasingly attained a sustainable value chain.
Conclusion
Supply chain of an organization involves a series of activities from acquiring or
procuring of raw materials to delivery of the final to the customers. From the above analysis it is
evident that Rio Tinto, the world class mining company has very well-established its supply
chain and have also ensured sustainability throughout the operational activities. The company
has ensured to add value to its business through engaging with different partners, suppliers as
well as customers in the proper functioning of the supply chain.

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The supply chain management of the firm also includes the environmental and social
issues as the business procedure of organization is closely related to the local community where
it operates. In addition to this, Rio Tinto Limited has also developed standard policies along with
explicit guidelines that are highly related to ensuring safety, occupational health, and preserving
the human rights. In order to attain sustainability throughout its supply chain, the company has
developed standard community policy which enables it to encourage collaborative engagement at
domestic, regional, national as well as universal level.

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References
Carter, C. R., & Liane Easton, P. (2011). Sustainable supply chain management: evolution and
future directions. International Journal Of Physical Distribution & Logistics
Management, 41(1), 46-62.
Fredendall, L. D., & Hill, E. (2016). Basics of supply chain management. Boca Raton: CRC
Press.
Golicic, S., Boerstler, C., & Ellram, L. (2010). 'Greening'the Transportation in Your Supply
Chain. MIT Sloan Management Review, 51(2), 47.
Rio Tinto Limited (2017) Annual report. Retrieved from
https://www.riotinto.com/documents/RT_2017_Annual_Report.pdf
Rio Tinto Limited (2019) About us. Retrieved from https://www.riotinto.com/about-us-108.aspx
Ross, D. F. (2016). Introduction to supply chain management technologies. Boca Raton: CRC
Press.
Svensson, G. (2007). Aspects of sustainable supply chain management (SSCM): conceptual
framework and empirical example. Supply chain management: An International
Journal, 12(4), 262-266.
Swanson, D., Goel, L., Francisco, K., & Stock, J. (2017). Applying theories from other
disciplines to logistics and supply chain management: a systematic literature
review. Transportation Journal, 56(3), 299-356.
Wu, F., Yeniyurt, S., Kim, D., & Cavusgil, S. T. (2006). The impact of information technology
on supply chain capabilities and firm performance: A resource-based view. Industrial
Marketing Management, 35(4), 493-504.