Newcrest Mining Limited: Supply Chain Management Business Report

This report provides a comprehensive analysis of the supply chain management practices of Newcrest Mining Limited, a major gold producer. It covers various aspects of the company's operations, including its business nature, product types (gold and copper), major customers, employee management, organizational structure, and financial position. The report delves into the supply chain structure, mapping the distribution chain and discussing sourcing of materials and services, as well as production processes. It also evaluates the existing demand and inventory management systems, offering suggestions for improvement. The analysis is supported by financial data and operational details extracted from Newcrest Mining's annual reports and other sources, providing a detailed overview of the company's supply chain dynamics.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of Student:
Name of University:
Author’s Note:

1SUPPLY CHAIN MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Background information of the chosen company............................................................................3
Discussing the nature of business................................................................................................3
Types of product..........................................................................................................................4
Major customers of Newcrest Mining.........................................................................................4
Discussion on employees.............................................................................................................4
Management style........................................................................................................................5
Organizational structure...............................................................................................................5
Financial position.........................................................................................................................6
Number and types of facilities...................................................................................................13
Discussion on the supply chain structure of the chosen company.................................................14
Distribution chain map..............................................................................................................14
Contract......................................................................................................................................15
Discussion on sourcing of materials and services, producing goods/services...............................16
Discussing the existing system..................................................................................................16
Suggesting improvement...........................................................................................................16
Discussing the demand management and inventory system involved...........................................17
Existing system..........................................................................................................................17
Suggesting improvement...........................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................19

2SUPPLY CHAIN MANAGEMENT
Introduction
The discourse of the study aims to develop a vivid understanding of the logistics and
supply chain activities for “Newcrest Mining Limited”. The background information of the
company will include the discussion of its business nature, type of products, major customers,
number of employees, management style, organizational structure, financial position and types of
facilities. The next section of the study will include the supply-chain structure for “Newcrest
Mining Limited” which will be able to demonstrate the map for its distribution chain. The third
section of the discourse will include discussion on the sourcing materials, services and producing
goods. The subsections will comprise of the discussion on the existing system and suggest
improvement at the same time. The various types of demonic management and inventory
management system will evaluate the existing inventory system involved and suggest
improvement accordingly.
Background information of the chosen company
Discussing the nature of business
Newcrest headquartered in Melbourne considered as the largest gold producer which is
listed on the: Australian Securities Exchange” and one of the “world's largest gold mining
companies”. The main mission of the company to deliver superior returns from findings,
operations and developing of gold/copper mines. The company owns its portfolio of
predominantly low-cost, long life mines along with a strong pipeline of “brownfield and
greenfield exploration projects”. The reserve and the resources are considerably strong with
more than 25 years of production experience at current rates. The asset portfolio of the company
uses a variety of efficient method of mining for the large ore bodies, selected together with
various types of underground mining methods for optimizing of high-grade epithermal deposits.
The mines are mostly located in “Australia, Papua New Guinea (PNG), Indonesia, and Côte
d’Ivoire”. The present operations of the company include “Cadia Valley Operations (New South
Wales, Australia)”, “Telfer (Western Australia)”, “Gosowong (Halmahera Island, Indonesia)”,
“Lihir (New Ireland Province, PNG)” and “Bonikro (Côte d’Ivoire)”. The discovery of the new
ore bodies is identified as the most significant aspect of Newcrest’s strategy. In addition to this,
the company has been successful in maintaining a strong and successful exploration track record.

3SUPPLY CHAIN MANAGEMENT
The key objective of the exploration strategy includes, securing large mineral districts/provinces
for establishing the scope for future operations and enhancing the future discoveries.
Types of product
The company’s main produce includes gold and copper in Australia situated at the
“Ridgeway (Cadia Valley Operations)”. It has been further discerned that the second most
important Australia operation is considered with “Telfer Mine in the Pilbara region of Western
Australia”. Some of the other production zones include two mines situated in “Papua New
Guinea, Lihir and Hidden Valley” and one each in “Ivory Coast (Bonikro) and Indonesia
(Gosowong)”. Based on the financial statement published in 2017, the total mine production is
depicted to be 18853 thousand tonnes in Cadia, Located in central west “New South Wales,
Australia”. Some of the other significant quantities of production is observed with Lihir Located
on the island of Niolam with a total mine production of 30069 thousand tonnes. Furthermore,
Telfer gold-copper mine located in the “Great Sandy Desert in Western Australia” has a total
mine production of 34144 thousand tonnes.
Major customers of Newcrest Mining
The main revenue from the contracts is depicted to be arising from contracts with the
customers. The main customers of the company have been identified with major companies
require copper for construction works. In addition to this, the electronics making companies in
Australia such as ASKO, Electrolux and Fisher & Paykel how considered are some of the most
significant customers of Newcrest. Some the various types of other customer profile include
Australia Pacific electric cables. In addition to this some of the other cable companies such as
Bambach Wires & Cables, Tycab Australia, NAN cables and Nexans Olex are some of the most
significant customers of Newcrest for buying copper and refurbishing it to their cables.
Customers of gold production is recognized with companies such as Shiels Jewellers, Michael
Hill Colonnades, Tiffany & Co., Zamels Jewellery Australia and Wallace Bishop Jewellers
(Newcrest.com.au, 2018).
Discussion on employees
As per the report published by Forbes Global 2000 List Newcrest Mining Limited is
recognized with a total market capital of $ 14 Billion and an employee strength of 1,544
employees. It has been discerned that during the financial year 2017 Newcrest introduced new

4SUPPLY CHAIN MANAGEMENT
“Healthy Living program at Lihir designed to help Lihir’s 4,500 strong workforce take charge of
their personal health, with more than 3,400 of the workforce already receiving a personal health
consultation”. The main intention of launching the program was to make aware of the existing
employees about the importance of Healthy Living program. The main standards incorporated by
the company has encouraged diversity and included addressing specific barriers to the
employees. The flexible work practices standards have allowed the employees to adopt flexible
working practices for supporting a wide variety of professional and personal circumstances.
Moreover, the work place behavior standard always looks forward to ensure that the workplace
is free from “discrimination, harassment, bullying and victimization”. This allows the employees
to understand appropriate workplace behavior thereby building a productive workplace
environment (Newcrest.com.au, 2018).
Management style
The management style for Newcrest Mining is identified to be democratic in nature. The
rationale for such a style is seen with the different types of long-term decisions which are
particularly well suited to gaining employee buy-in. This is further identified as a collaborative
process where the employees and the management work together to create a vision. Some of the
most vivid democratic evidences are found with conducting open forums among various levels in
the organization. It is further discerned that the board takes an active role in governance and
oversight of remuneration policies and responsible for making sure the company’s remuneration
strategy aligns with the short and long-term business objectives of Newcrest. The democracy
aspect in the remuneration strategy is identified with attracting and retaining “high performing
Executives (including by providing sign-on grants where appropriate to attract key talent)”. It is
for the scene with providing appropriate levels of “at risk” performance for encouraging,
recognizing and rewarding high-performance. It is further discerned that the incorporation of the
business performance measures aligns with the performance incentives with long-term interest of
the shareholders.
Organizational structure
The organization structure includes Sandeep Biswas as the “Managing Director and Chief
Executive Officer” of the company along with Peter Hay and Philip Aiken Am as the
independent nonexecutive Chairman and director. It has been further noted that Gerard Bond is

5SUPPLY CHAIN MANAGEMENT
the “Finance Director and Chief Financial Officer”. Some of the other hierarchies of the
organizational structure includes Roger Higgins, Lady Winifred Kamit and Rick Lee Am as the
Independent Non-Executive Director. Some of the other board of director includes Xiaoling Liu,
Vickki Mcfadden and John Spark as some of the other independent non-Executive Director
(Titman et al., 2017).
Financial position
Comparison of Consolidated Income Statements
Particulars
Newcrest
Mining
2017
Newcrest
Mining
2016
Percentage of
the total
income
Revenues 3477 3295 106%
Profit for the
Period 319 335 95%
Comparison of Statement of Financial Position
Particulars
Newcrest
Mining
2017
Newcrest
Mining
2016
Percentage of
the total
income
Total Assets 11583 11191 104%
Capital
Expenditure 7534 7120 106%

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Newcrest Mining
2017
Newcrest Mining
2016
Percentage of the
total income
0
500
1000
1500
2000
2500
3000
3500
4000
3477 3295
1.0552352048558
4
319 335 0.9522388059701
49
Comparison of Income Statements
Revenues Profit for the Period
Newcrest Mining
2017
Newcrest Mining
2016
Percentage of the
total income
0
2000
4000
6000
8000
10000
12000
14000
11583 11191
1.03502814761
862
7534 7120
1.05814606741
573
Comparison of Statement of Financial Position
Total Assets Capital Expenditure
Profitability Ratio Analysis: -
Newcrest Mining
Particulars 2017 2016
Revenue (A) 3477 3295
Net Profit/Loss after Tax (D) 319 335

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Ordinary Equity(H) 7534 7120
Total Assets (G) 11583 11191
Net Profit Margin (D/A) 9.17% 10.17%
Return on Equity (A/H)) 4.23% 4.71%
Return on Assets (G/D) 2.75% 2.99%
2017 2016
3.90%
4.00%
4.10%
4.20%
4.30%
4.40%
4.50%
4.60%
4.70%
4.80%
4.23%
4.71%
Return on Equity
Newcrest Mining
2017 2016
8.60%
8.80%
9.00%
9.20%
9.40%
9.60%
9.80%
10.00%
10.20%
10.40%
9.17%
10.17%
Net Profit Margin
Newcrest Mining

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2017 2016
2.60%
2.65%
2.70%
2.75%
2.80%
2.85%
2.90%
2.95%
3.00%
3.05%
2.75%
2.99%
Return on Assets
Newcrest Mining
Efficiency Ratios Analysis
Newcrest Mining
Particulars 2017 2016
Cost of Goods
Sold(A) 2609 2601
Inventory (H) 1125 1170
Revenue (A) 3477 3295
Total Assets
(G) 11583 11191
Inventory
Turnover
Ratio (A/H)) 2.32 2.22
Total Asset
Turnover
Ratio (A/G) 0.30 0.29

9SUPPLY CHAIN MANAGEMENT
2017 2016
0.29
0.30
0.31
0.30
0.29
Total Asset Turnover Ratio
Newcrest Mining
2017 2016
2.16
2.18
2.20
2.22
2.24
2.26
2.28
2.30
2.32
2.34 2.32
2.22
Inventory Turnover Ratio
Newcrest Mining
Short-Term Liquidity Ratio Analysis: -
Newcrest Mining
2017 2016
Total Current Assets (A) 1249 803
Receivables (D) 88 134
Cash and equivalents (B) 492 53
Total Current Liabilities (F) 664 670
Current Ratio (A/F) 1.88 1.20

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Quick Ratio [(B+D)/F) 0.87 0.28
2017 2016
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00 1.88
1.20
Current Ratio
Newcrest Mining
2017 2016
0.00
0.20
0.40
0.60
0.80
1.00 0.87
0.28
Quick Ratio
Newcrest Mining
Debt Equity Ratio
Newcrest Mining
2017 2016

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Total Liabilities (A) 4049 4071
Total Assets (B) 11583 11191
Total Equity (C ) 7534 7120
Debt-to-total Assets Ratio (A/B) 0.35 0.36
Debt to Equity Ratio (A/C) 0.54 0.57
2017 2016
0.52
0.53
0.54
0.55
0.56
0.57
0.58
0.54
0.57
Debt Equity Ratio
Newcrest Mining