Ariba, a major spend management firm, made a move today to broaden its reach in the mining industry by acquiring Quadrem, a leader in supply-chain management that focuses on the minerals and mining business.
Our sister publication, Spend Matters, explores how the scale of Ariba’s reach will change after the deal is closed.
Now the largest global business commerce network, Ariba-Quadrem will be able to overcome Ariba’s past challenges to penetrate the mining market (“Quadrem brings immediate access and up-sell potential into: Alcoa, Anglo American, BHP Billiton, NestlÃƒÂ©, Vale and Rio Tinto and others,” writes Jason Busch.)
Specific deal considerations and details are outlined here.
Ariba will also now have greater leverage in emerging markets, where mineral and metal mining are increasingly important. Quadrem’s business reaches into Latin America, EMEA and Asia Pacific, whereas Ariba has had “weaker penetration in these markets from a volume perspective.”
Ultimately, Spend Matters offers an exclusive, big-picture analysis on deal that could will make waves in the procurement world. How do we think it relates to metals and mining?
Lisa Reisman, editor of MetalMiner, weighs in. “Indirect procurement network connectivity in the mining, minerals and metals world is not the primary focus of procurement and supply chain operations,” she said. “What gave rise to the use of Quadrem’s network business was the need for a shared service for something procurement heads did not want to waste a minute thinking about. More strategic procurement issues for mining, minerals and metals customers include: services procurement (including contingent workers in mines), labor management, capital equipment procurement, service parts and spares procurement (remember the tire issue and shortage from 2008?), MRO strategies and fulfillment for mining facilities (for example, safety supplies, mining supplies, etc.). BPO is also a rising area of interest here.”