The mining industry, including companies involved in underground or surface mining of coal, taconite and minerals, has faced dramatic globalization during the past decade. Bankruptcies, consolidations and international markets have executives scrambling to keep pace with changes, today and in the future. As a result, mines are searching for operational efficiency measures that promote more productive relationships with trading partners and drive better results for customers
The Internet: an efficiency resource
A May 1999 article in Forbes magazine by Mark P. Mills and Peter W. Huber notes that the Internet - which connects more than 100 million computers and accounts for 8% of total U.S. electricity consumption - begins with coal. The authors estimate that a single Internet transaction requires the energy of a 1/2 pound of coal.
But the Internet goes beyond a newly created source of demand. It also has spawned growth in electronic commerce that has impacted the mining industry and its suppliers by introducing new methods for companies of all sizes to implement operational efficiencies and develop more strategic trading partner relationships.
Traditional methods of handling customer and supplier transactions associated with purchase orders, invoices, and related documents using the facsimile machine or mail are paper-intensive and resource-extensive. Many mining companies have utilized Electronic Data Interchange (EDI) to exchange these business documents with their trading partners. But the high cost of EDI technology has generally limited the ability to transact business electronically to only the largest mining companies and their largest trading partners.
The Internet provides the next step for expanding electronic transactions to a wider trading partner community and allowing all mining companies to transact business electronically with nearly 100% of their trading partners.