Supply Chain: Movement of materials/services from origin to user
You in the role of customer
Demand Chain: Movement of information from user to origin
You in the role of supplier
Your company as the linkage
If you provide products/services to customers, the Value Chain applies to you
What is the Value Chain? Marsh Your Company Customer Supplier Manufacture Product Attributes Production Attributes Package Transport Purchasing Specs Inventory/ Sales Consumer Demand/Use Movement of materials/services Movement of information Conversion of materials, services and information into needed product Material Extraction Process Package/ Transport/ Sale
Study of 861 public companies showed once a supply chain malfunction is announced, stock prices drop as much as 12% and shareholder wealth decreases at least $120 million.
Vinod Singhal, Georgia Institute of Technology and Kevin Hendricks, University of Western Ontario, “How Supply Chain Glitches Torpedo Shareholder Value”, Supply Chain Management Review , January/February 2002.
53% of M & A deals exceeding $1B failed to meet expectations after two years due to poor execution of touted strategy.
Booz-Allen & Hamilton, 2001.
“ The most important non-financial driver of a company’s value … was a company’s ability to execute its strategy. [This] may simply reflect how few managements are actually capable of carrying out their strategies in this fast, hypercompetitive coevolving economy.”
Invisible Advantage: How Intangibles are Driving Business Performance, Jonathan Low and Pam Cohen Kalafut, 2002.
EHS as Competitive Advantage in Value Chain Marsh Degree of Traditional EHS Effort Required High Low Supply Chain Integration (Supplier Management Only) Basic Compliance (Facility EHS Management) Integrated Value Chain (Engaging Suppliers and Customers)
Manage Supplier Costs for Your Company
Manage Wastes and Regulatory Requirements for Your Company
Waste Reduction for Your Company
Reduced Regulatory Requirements for Your Company
Consumption Management for Your Company
Reduced Employee Exposure for Your Company
Waste Reduction for All
Reduced Regulatory Requirements for All
Reduced Employee Exposure for All
First-Mover Advantage for Your Company
Alliances / Risk Sharing
Long Term, Trust-Based Relationships for All
Consumption Management for All
Support Strategy Execution for All
Reduced Customer Exposure for All
Degree of EHS Impact and Cost High Low Increasing strategic advantage and cost saving potential Strategic and Savings Drivers