Supply chain management

1. Supply Chain Management
1

2. Supply Chain Management
 A supply chain is a set of organizations directly linked
by one or more of the upstream and downstream flows
of products, services, finances, and information from a
source to a customer. Managing a supply chain is 'supply
chain management'
 Supply chain management (SCM) is the management of
a network of interconnected businesses involved in the
ultimate provision of product and service packages
required by end customers. Supply chain management
spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point of
origin to point of consumption (supply chain).
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3. Supply Chain Management
3

4. 4
The Supply Chain
Suppliers Manufacturers Warehouses &
Distribution Centers
Customers
Material Costs
Transportation
Costs
Transportation
Costs
Transportation
CostsInventory CostsManufacturing Costs

5. 5
The Supply Chain – Another View
Suppliers Manufacturers Warehouses &
Distribution Centers
Customers
Material Costs
Transportation
Costs
Transportation
Costs Transportation
CostsInventory CostsManufacturing Costs
Plan Source Make Deliver Buy

6. Supply Chain for Service
Providers
 More difficult than manufacturing
 Does not focus on the flow of physical goods
 Focuses on human resources and support
services
 More compact and less extended

7. Value vs. Supply Chain
 Value chain
◦ every step from raw materials to the eventual
end user
◦ ultimate goal is delivery of maximum value to the
end user
 Supply chain
◦ activities that get raw materials and
subassemblies into manufacturing operation
 Terms are used interchangeably

8. Supply Chain Management
(SCM)
 Managing flow of information through
supply chain in order to attain the level of
synchronization that will make it more
responsive to customer needs while
lowering costs
 Keys to effective SCM
◦ information
◦ communication
◦ cooperation
◦ trust

9. 9
What Is Supply Chain Management (SCM)?
 A set of approaches used to efficiently integrate
◦ Suppliers
◦ Manufacturers
◦ Warehouses
◦ Distribution centers
 So that the product is produced and distributed
◦ In the right quantities
◦ To the right locations
◦ And at the right time
 System-wide costs are minimized and
 Service level requirements are satisfied
Plan Source Make Deliver Buy

10. WHAT IS SUPPLY CHAIN MANAGEMENT
" Is the strategic management of activities involved in
the acquisition and conversion of materials to finished
products delivered to the customer"
Supplier
Management
Schedule /
Resources
Conversion
Stock
Deployment Delivery
Customer
Management
Leads to Business Process Integration
Material Flow
Information Flow

11.  Supply chain is the system by which
organizations source, make and deliver
their products or services according to
market demand.
 Supply chain management operations and
decisions are ultimately triggered by
demand signals at the ultimate consumer
level.
 Supply chain as defined by experienced
practitioners extends from suppliers’
suppliers to customers’ customers.

12. 12
History of Supply Chain Management
 1960’s - Inventory Management Focus, Cost
Control
 1970’s - MRP & BOM - Operations Planning
 1980’s - MRPII, JIT - Materials Management,
Logistics
 1990’s - SCM - ERP - “Integrated” Purchasing,
Financials, Manufacturing, Order Entry
 2000’s - Optimized “Value Network” with Real-
Time Decision Support; Synchronized &
Collaborative Extended Network

13. 13
Why Is SCM Difficult?
 Uncertainty is inherent to every supply chain
◦ Travel times
◦ Breakdowns of machines and vehicles
◦ Weather, natural catastrophe, war
◦ Local politics, labor conditions, border issues
 The complexity of the problem to globally optimize a
supply chain is significant
◦ Minimize internal costs
◦ Minimize uncertainty
◦ Deal with remaining uncertainty
Plan Source Make Deliver Buy

14. Supply Chain Uncertainty
 One goal in SCM:
◦ respond to uncertainty in
customer demand without
creating costly excess
inventory
 Negative effects of
uncertainty
◦ lateness
◦ incomplete orders
 Inventory
◦ insurance against supply
chain uncertainty
 Factors that contribute to
uncertainty
◦ inaccurate demand
forecasting
◦ long variable lead times
◦ late deliveries
◦ incomplete shipments
◦ product changes batch
ordering
◦ price fluctuations and
discounts
◦ inflated orders

15. CASE STUDY
WHY MANAGE SUPPLY CHAINS

16. DIFFERENT RESPONSES OF NOKIA AND
ERICSSON ON A FIRE AT ONE OF THE
SUPPLIER’S FACILITY
◦ Supplier was Philips Semiconductors in Albuquerque,
NM
 Nokia:
◦ Changed product design to source components from
alternate suppliers
◦ For parts that could not be sourced from elsewhere,
worked with Philips to source it from their plants in
China and Netherlands
◦ All done in about five days

17. DIFFERENT RESPONSES OF NOKIA AND
ERICSSON ON A FIRE AT ONE OF THE
SUPPLIER’S FACILITY
 Ericsson’s experience was quite different
◦ Took 4 weeks for the news to reach upper
management
◦ Realized five weeks after the fire regarding the
severity of the situation.
◦ By that time, the alternative supply of chips was
already taken by Nokia.
◦ Devastating impact on Ericsson
 $400M in potential sales was lost
 Part of the loss was covered by insurance.
 Led to component shortages
 Wrong product mix and marketing problems caused:
 $1.68B loss to Ericsson Cell Phone Division in 2000
 Forced the company to exit the cell phone market

18. TOYOTA SUPPLY CHAIN
 In 1997, Aisin Seiki the sole supplier of 98% of
brake fluid proportioning valves (P-valves) used
by Toyota
 Inexpensive part (about $7 each) but important
in the assembly of any car.
 Saturday, February 1, 1997:Fire stopped Aisin’s
main factory in the industrial area of Kariya,
◦ Two weeks to restart the production
◦ Six months for complete recovery
 Toyota producing close to 15,500 vehicles per
day.
◦ JIT meant only 2-3 days of inventory supply

19. Recovery Effort by Toyota
 Blueprints of valves were distributed among all Toyota’s
suppliers
 Engineers from Aisin and Toyota relocated to supplier’s
facilities
 Other manufacturers like Brother were also brought in
 Existing machinery adapted to build the valves
according to original specifications
 New machinery acquired in the spot market
 Within days, firms with little experience with P-valves
were manufacturing and delivering parts to Aisin
◦ Aisin assembled and inspected valves before shipment to Toyota
◦ About 200 of Toyota’s suppliers were involved

20. Outcome
 Accident initially cost:
◦ 7.8B Yen ($65M) to Aisin
◦ 160B Yen (or $1.3B) to Toyota
 Damage reduced to 30B Yen ($250M) with
extra shifts and overtime
 Toyota issued a $100M token of
appreciation to their providers as a gift for
their collaboration

21. The Need for Supply Chain
Management
The need to improve operations.
Increasing levels of outsourcing.
Increasing transportation costs.
Competitive pressures.
Increasing importance of e-commerce.
The need to manage inventories
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22. What the supply chain is not
The definitions described and developed
earlier and recent industry collaborative
activities indicate that supply chain
management is not a standalone
process. Many supply chain efforts have
fallen short of the potential advantages
because the term is often viewed as only
relating to the supply side of the business
or to the purchasing function. As indicated
above, supply chain management is much
more that just procurement.
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23. Among the misunderstanding
evidenced, SCM is not:
 Inventory management;
 Logistics management;
 Supplier partnerships;
 Driven from the supply side;
 A shipping strategy;
 Distribution management;
 The logistics pipeline;
 Procurement
 A computer system
23

24. Reasons for the slow growth of integrated
SCM include the following:
Lack of guidelines for creating alliances
with supply chain partners.
Failure to develop measures for
monitoring alliances.
Inability to broaden the supply chain vision
beyond procurement or product
distribution to encompass larger business
processes.
Inability to integrate the company internal
procedures.
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25. Reasons cont…….
Lack of trust inside and outside a
company.
Organizational resistance to the concept.
Lack of buyin-by top managers.
Lack of integrated information systems
and electronic commerce linking firms.
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26. 26
The Importance of Supply Chain Management
 Dealing with uncertain environments – matching supply
and demand
◦ Boeing announced a $2.6 billion write-off in 1997 due to
“raw materials shortages, internal and supplier parts
shortages and productivity inefficiencies”
◦ U.S Surgical Corporation announced a $22 million loss in
1993 due to “larger than anticipated inventories on the
shelves of hospitals”
◦ IBM sold out its supply of its new Aptiva PC in 1994 costing
it millions in potential revenue
◦ Hewlett-Packard and Dell found it difficult to obtain
important components for its PC’s from Taiwanese suppliers
in 1999 due to a massive earthquake
 U.S. firms spent $898 billion (10% of GDP) on supply-
chain related activities in 1998

27. 27
The Importance of Supply Chain Management
 Shorter product life cycles of high-technology products
◦ Less opportunity to accumulate historical data on customer
demand
◦ Wide choice of competing products makes it difficult to
predict demand
 The growth of technologies such as the Internet enable
greater collaboration between supply chain trading
partners
◦ If you don’t do it, your competitor will
◦ Major buyers such as Wal-Mart demand a level of “supply
chain maturity” of its suppliers
 Availability of SCM technologies on the market
◦ Firms have access to multiple products (e.g., SAP, Baan,
Oracle, JD Edwards) with which to integrate internal
processes

28.  SUPPLY CHAIN INCLUDES :
◦ MATERIAL FLOWS
◦ INFORMATION FLOWS
◦ FINANCIAL FLOWS

29.  SUPPLY CHAIN MANAGEMENT IS
FACILITATED BY :
◦ PROCESSES
◦ STRUCTURE
◦ TECHNOLOGY

30.  Supply chain serves two functions:
◦ Physical
◦ Market mediation

31.  Supply chain objectives may differ from
situation to situation.
 For functional products, cost efficiency is
the critical factor.
 For innovative products, responsiveness
is the important factor.
 Leanness + Agility together make up
Leagility

32. SUPPLY CHAIN DRIVERS
Not new. Value system of Michael Porter
• Why sudden interest?
– Demanding customers
– Shrinking product life cycles
– Proliferating product offerings
– Growing retailer power in some cases
– Doctrine of core competency
– Emergence of specialized logistics providers
– Globalization
– Information technology

33. SUPPLY CHAIN ELEMENTS
• Supply Chain Design
• Resource Acquisition
• Long Term Planning (1Year++)
Strategic
• Production/ Distribution Planning
• Resource Allocation
• Medium Term Planning (Qtrly,Monthly)
Tactical
• Shipment Scheduling
• Resource Scheduling
• Short Term Planning (Weekly,Daily)
Operational

34. Supply Chain Issues
Quality control
Production planning and
control
Inventory policies
Purchasing policies
Production policies
Transportation policies
Quality policies
Design of the supply
chain, partnering
Operating IssuesTactical IssuesStrategic Issues

35. Elements of Supply Chain
Management
Deciding how to best move and store materialsLogistics
Determining location of facilitiesLocation
Monitoring supplier quality, delivery, and relationsSuppliers
Evaluating suppliers and supporting operationsPurchasing
Meeting demand while managing inventory costsInventory
Controlling quality, scheduling workProcessing
Incorporating customer wants, mfg., and timeDesign
Predicting quantity and timing of demandForecasting
Determining what customers wantCustomers
Typical IssuesElement

36. Elements of SCM
Supply chain management involves
coordinating activities across the supply chain
central to these corresponding activities at each
level of the supply chain.
Elements Typical Issues
 Customers - Determining what products and/or
services customers want
 Forecasting - Predicting the quantity and timing
of customer demand.
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37. Elements of SCM Cont…….
 Inventory - Meeting demand
requirements while
managing the costs of holding
inventory
 Purchasing - Evaluating potential suppliers,
supporting the needs of
operations
on purchased goods and
services
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38. 38
Elements……..
 Suppliers - Monitoring supplier quality, on-time
delivery, and flexibility maintaining supplier
relations
 Location - Determining the location of facilities
 Logistics - Deciding how to best move information
and materials

39. Elements cont…..
Capacity Planning - Matching supply and
demand
Processing - Controlling quality, scheduling
work
39

40. 40
Supply Chain Management – Key Issues
 Overcoming functional silos with conflicting goals
Purchasing Manufacturing Distribution
Customer Service/
Sales
Few
change-
overs
Stable
schedules
Long run
lengths
High
inventories
High service
levels
Regional
stocks
SOURCE MAKE DELIVER SELL
Low
pur-
chase
price
Multipl
e
vendors
Low
invent-
ories
Low
trans-
portatio
n

41. 41
Supply Chain Management – Key Issues
ISSUE CONSIDERATIONS
Network Planning • Warehouse locations and capacities
• Plant locations and production levels
• Transportation flows between facilities to minimize cost and time
Inventory Control • How should inventory be managed?
• Why does inventory fluctuate and what strategies minimize this?
Supply Contracts • Impact of volume discount and revenue sharing
• Pricing strategies to reduce order-shipment variability
Distribution Strategies • Selection of distribution strategies (e.g., direct ship vs. cross-docking)
• How many cross-dock points are needed?
• Cost/Benefits of different strategies
Integration and Strategic
Partnering
• How can integration with partners be achieved?
• What level of integration is best?
• What information and processes can be shared?
• What partnerships should be implemented and in which situations?
Outsourcing & Procurement
Strategies
• What are our core supply chain capabilities and which are not?
• Does our product design mandate different outsourcing approaches?
• Risk management
Product Design • How are inventory holding and transportation costs affected by product
design?
• How does product design enable mass customization?
Source: Simchi-Levi

42. 42
Supply Chain Management Operations Strategies
STRATEGY WHEN TO CHOOSE BENEFITS
Make to Stock standardized products,
relatively predictable
demand
Low manufacturing costs;
meet customer demands
quickly
Make to Order customized products,
many variations
Customization; reduced
inventory; improved
service levels
Configure to Order many variations on
finished product;
infrequent demand
Low inventory levels; wide
range of product
offerings; simplified
planning
Engineer to Order complex products, unique
customer specifications
Enables response to
specific customer
requirements
Source: Simchi-Levi

43. 43
Supply Chain Imperatives for Success
 View the supply chain as a strategic asset and a
differentiator
◦ Wal-Mart’s partnership with Proctor & Gamble to
automatically replenish inventory
◦ Dell’s innovative direct-to-consumer sales and build-to-order
manufacturing
 Create unique supply chain configurations that align with
your company’s strategic objectives
◦ Operations strategy
◦ Outsourcing strategy
◦ Channel strategy
◦ Customer service strategy
◦ Asset network
 Reduce uncertainty
◦ Forecasting
◦ Collaboration
◦ Integration
Supply chain configuration componen

44. Decision Phases in a Supply Chain
• Successful supply chain management
requires many decisions relating to the flow
of information, product and funds.
•Each decision should be made to raise the
supply chain surplus
•Decisions fall into three categories
depending on;
•Frequency of each decision.
•Time frame during which decision has an
impact.
•Each category of decision has to consider
uncertainty over the decision horizon.

45. Decision Phases in a Supply Chain
1. Supply Chain Strategy or Design (long term Dcns)
•Company decides what the chain’s configuration will be,
how resources will be allocated and what processes each
stage will perform.
•Decisions made by companies include;
•Whether to outsource or perform a supply chain function in-
house.
•Location of facilities.
•Capabilities of production and warehousing facilities
•Products to be manufactured or sold at various locations
•Modes of transportation to be made available/utilized.
•Supply chain configuration should support a firms
strategic objectives and increase supply chain surplus.

46. Decision Phases in a Supply Chain
2. Supply Chain Planning
•Time frame considered is a quarter to a
year.
•Goal is to maximize the supply chain
surplus that can be generated over the
planning horizon given the constraints of
phase 1.
•Planning includes making decisions like;
•Which markets will be supplied from which
locations
•Subcontracting of manufacturing
•Inventory policies to be followed
•As a result of the planning phase,
companies define a set of operating policies
that govern short-term operations

47. Decision Phases in a Supply Chain
3. Supply Chain Operation
•Time horizon is weekly or daily
•Companies make decisions regarding
individual customer orders.
•Supply chain configuration is considered
fixed and planning policies already defined.
•Goal of supply chain operations is to handle
incoming customer orders in the best
possible manner.

48. Decision Phases in a Supply Chain
3. Supply Chain Operation …
During this phase;
•Firms allocate inventory/production to individual orders.
•Set a date that an order can be fulfilled.
•Generate pick lists at a warehouse.
•Allocate an order to a particular shipping mode and
shipment.
•Set delivery schedules of trucks
•Place replenishment orders.
•Operational decisions are in the short term (minutes,
hours or days) hence there is less uncertainty about
demand information.
•Goal is to exploit the reduction of uncertainty and
optimize performance with constraints of phase 1 & 2

49. 49
Value of Information
and SCM

50. 50
Information In The Supply Chain
Source Make Deliver Sell
Suppliers Manufacturers
Warehouses &
Distribution Centers
Retailer
Order Lead Time
Delivery Lead Time
Production Lead Time
 Each facility further away from
actual customer demand must
make forecasts of demand
 Lacking actual customer buying
data, each facility bases its
forecasts on ‘downstream’
orders, which are more variable
than actual demand
 To accommodate variability,
inventory levels are overstocked
thus increasing inventory
carrying costs
It’s estimated that
the typical
pharmaceutical
company supply
chain carries over
100 days of
product to
accommodate
uncertainty
Plan

51. Information Technology: A Supply
Chain Enabler
 Information links all
aspects of supply chain
 E-business
◦ replacement of physical
business processes with
electronic ones
 Electronic data interchange
(EDI)
◦ a computer-to-computer
exchange of business
documents
 Bar code and point-of-sale
◦ data creates an
instantaneous computer
record of a sale
 Radio frequency
identification (RFID)
◦ technology can send
product data from an item
to a reader via radio waves
 Internet
◦ allows companies to
communicate with
suppliers, customers,
shippers and other
businesses around the
world, instantaneously

52. E-business and Supply Chain
 Cost savings and price reductions
 Reduction or elimination of the role of
intermediaries
 Shortening supply chain response and
transaction times
 Gaining a wider presence and increased
visibility for companies
 Greater choices and more information for
customers

53. E-business and Supply Chain
(cont.)
 Improved service as a result of instant
accessibility to services
 Collection and analysis of voluminous
amounts of customer data and preferences
 Creation of virtual companies
 Leveling playing field for small companies
 Gaining global access to markets,
suppliers, and distribution channels

54. 54
Methods for Improving Forecasts
Accurate
Forecasts
Panels of Experts
• Internal experts
• External experts
• Domain experts
• Delphi technique
• Moving average
• Exponential smoothing
• Trend analysis
• Seasonality analysis
Judgment Methods
Time-Series Methods
Causal Analysis
Market Research Analysis
• Relies on data other
than that being
predicted
• Market testing
• Market surveys
• Focus groups

55. 55
Supply Chain Collaboration – What Is It?
 Many different definitions depending on perspective
 The means by which companies within the supply chain
work together towards mutual goals by sharing
◦ Ideas
◦ Information
◦ Processes
◦ Knowledge
◦ Information
◦ Risks
◦ Rewards
 Why collaborate?
◦ Accelerate entry into new markets
◦ Changes the relationship between cost/value/profit equation

56. 56
Supply Chain Collaboration
 Cornerstone of effective SCM
 The focus of many of today’s SCM initiatives
 The only method that has the potential to eliminate or
minimize the Bullwhip effect
Manufacturer
Distributors/
Wholesalers
Suppliers
Retailers
Collaborative
Demand
Planning
Collaborative Logistics Planning
•Transportation services
•Distribution center services
Synchronized
Production
Scheduling
Collaborative
Product
Development
Logistics Providers

57. 57
Benefits of Supply Chain Collaboration
CUSTOMERS MATERIAL SUPPLIERS SERVICE
SUPPLIERS
• Reduced inventory
• Increased revenue
• Lower order management costs
• Higher Gross Margin
• Better forecast accuracy
• Better allocation of promotional
budgets
• Reduced inventory
• Lower warehousing costs
• Lower material acquisition costs
• Fewer stockout conditions
• Lower freight costs
• Faster and more reliable delivery
• Lower capital costs
• Reduced depreciation
• Lower fixed costs
• Improved customer service
• More efficient use of human resources
Source: Cohen & Roussel

58. 58
Supply Chain Collaboration Spectrum
Source: Cohen & Roussel
Number of Relationships
ExtentofCollaboration
Many Few
Limited
Extensive
Transactional
Collaboration
Synchronized
Collaboration
Cooperative
Collaboration
Coordinated
Collaboration
Not Viable
Low Return
 The green arrow describes
increasing complexity and
sophistication of:
◦ Information systems
◦ Systems infrastructure
◦ Decision support systems
◦ Planning mechanisms
◦ Information sharing
◦ Process understanding
 Higher levels of
collaboration imply the
need for both trading
partners to have
equivalent (or close) levels
of supply chain maturity
 Synchronized collaboration
demands joint planning,
R&D and sharing of
information and
processing models
◦ Movement to real-time
customer demand
information throughout the
supply chain

59. 59
Successful Supply Chain Collaboration
 Try to collaborate internally before you try external
collaboration
 Help your partners to work with you
 Share the savings
 Start small (a limited number of selected partners) and
stay focused on what you want to achieve in the
collaboration
 Advance your IT capabilities only to the level that you
expect your partners to manage
 Put a comprehensive metrics program in place that allows
you to monitor your partners’ performance
 Make sure people are kept part of the equation
◦ Systems do not replace people
◦ Make sure your organization is populated with competent
professionals who’ve done this before

60. 60
Emerging Best Practices in SCM Strategy

61. Supply Chain Integration
 Information sharing among supply chain
members
◦ Reduced bullwhip effect
◦ Early problem detection
◦ Faster response
◦ Builds trust and confidence
 Collaborative planning, forecasting,
replenishment, and design
◦ Reduced bullwhip effect
◦ Lower Costs (material, logistics, operating, etc.)
◦ Higher capacity utilization
◦ Improved customer service levels

62.  Coordinated workflow, production and
operations, procurement
◦ Production efficiencies
◦ Fast response
◦ Improved service
◦ Quicker to market
 Adopt new business models and
technologies
◦ Penetration of new markets
◦ Creation of new products
◦ Improved efficiency
◦ Mass customization
Supply Chain Integration (cont.)

63. Suppliers
 Procurement
◦ purchase of goods and services from suppliers
 On-demand (direct response) delivery
◦ requires supplier to deliver goods when
demanded by customer
 Continuous replenishment
◦ supplying orders in a short period of time
according to a predetermined schedule
 Cross-enterprise teams coordinate
processes between company and supplier

64. Outsourcing
 Sourcing
◦ selection of suppliers
 Outsourcing
◦ purchase of goods and services from an
outside supplier
 Core competencies
◦ what a company does best
 Single sourcing
◦ a company purchases goods and services
from only a few (or one) suppliers

65. Copyright 2006 John Wiley
& Sons, Inc. 10-65
E-Procurement
 Direct purchase from suppliers over the
Internet
 Direct products go directly into production
process a product, indirect products not
 E-marketplaces
◦ web sites where companies and suppliers
conduct business-to-business activities
 Reverse auction
◦ a company posts orders on the Internet for
suppliers to bid on

66. Measuring Supply Chain
Performance
 Key performance indicators
◦ inventory turnover
 cost of annual sales per inventory unit
◦ inventory days of supply
 total value of all items being held in inventory
◦ fill rate
 fraction of orders filled by a distribution center within a
specific time period

67. Inventory turns =
Average aggregate value of inventory
Cost of goods sold
Average aggregate value of inventory =
=(average inventory for item i)X (unit value item i)
Days of supply =
(Costs of goods sold)/(365 days)
Average aggregate value of inventory
Key Performance
Indicators

68. Key Performance Indicators:
Example
Inventory turns =
$34,416,000
$425, 000, 000
Days of supply =
($425,000,000)/(365)
$34,416,000
= 12.3
= 29.6
1. Cost of goods sold: $425 million
2. Production materials and parts: $4,629,000
3. Work-in-process: $17,465,000
4. Finished goods: $12,322,000
5. Total average aggregate value of inventory (2+3+4): $34,416,000

69. Other Measures of Supply Chain
Performance
 Process Control
◦ used to monitor and control any process
in supply chain
 Supply Chain Operations Reference
(SCOR)
◦ establish targets to achieve “best in class”
performance

70. GREEN SUPPLY CHAIN
MANAGEMENT PRACTICES

71. Definition of GSCM
 GSC is a method to design and/or
redesign the supply chain that
incorporates recycling and
remanufacturing into the production
process and it involves minimization of
the firm’s total environmental impact
from start to finish of the supply chain
and also from beginning to end of the
product life cycle.

72. The practice
 This refers to supply chain management functions
which include:
◦ Green purchasing (in-bound logistics)
◦ Design for the environment (internal supply chain)
◦ Green marketing (out-bound logistics)
◦ Reverse logistics
 The results of the research carried by Purba et al
(2005), demonstrate that greening the inbound
function, as well as greening production, lead to
greening outbound, as well as to competitiveness
and economic performance of the firm.

73. Drivers
 Demand – e.g organic foods, energy savers etc
 Regulation- e.g NEMA
 Own initiative - CSR
 Competitiveness – ISO, world class
 Financial enterprises- IFC terms

74. Benefits
 Cost savings
 Waste minimization
 Customer satisfaction
 Increased competitiveness
 Enhanced environmental performance
 Increased awareness of HSE
 Improved productivity
 Improved business-to-business
relations

75. Global Supply Chain
To compete globally requires an effective supply chain
Information technology is an “enabler” of global trade
Nations form trading groups
No tariffs or duties