As a subsidiary of Anglo American, Boart Longyear was managed on a regional basis and did not coordinate purchasing on a global basis. Boart Longyear established a global team for the sourcing of material inputs into its manufacturing processes to achieve discounts and better leverage the Company’s buying power in the second quarter of FY2006. Since then, Management has implemented centralised purchasing and improved inventory management for key inputs including steel, machined parts, drilling fl uids, telecommunications services and PVC. To date, the program has focused on a relatively small number of key inputs. Management intends to expand the list of inputs upon which the program is focused and believes that further savings beyond those currently forecast should be possible in the future.
