Measuring Value of Suppliers

Measure the economic value that suppliers to the Resource Sector contribute and assess programs and mechanisms to deliver that outcome.

Background

The Industry Participation group in the Department of State Development through Mining Industry Participation Office is responsible for developing supply chains for the Resources Sector in South Australia

The Challenge

To develop measures to assess the health of the Mining Equipment, Technology and services (METS) sector to the Resource Sector supply chains and establish a baseline for annual reviews.

The Solution

Working with Professor Richard Blandy Flywheel Advisory assessed that:

  • The South Australian METS sector was defined as 2.6% of South Australia’s Gross State Product (assessed by EconSearch in 2014)

  • We proposed for Government to implement programs to raise the share of SA’s METS’ sales to Australian export markets from 10% to 15% over a 10-years.

  • All programs shift to an income-contingent loan basis similar to the HECS scheme of university student loans. MIPO’s effectiveness to be measured by whether the pool of loan funds shrinks below some critical figure determined by the SA government

The Benefits

  • The sector growth rate that we proposed should be the target of a competitiveness-building set of programs for the sector in reaching the 4.7% target set by the State Government will take 10 years if the SA METS sector grows at 8% p.a. and South Australia’s GSP grows at 2.5% p.a.

  • The measurement process continues to provide an annual measure of the METS sector contribution to GSP