10h15 Supply Chain

14th Americas School of Mines
Investing in LatinAmerica
Supply Chain Transformation

Alfredo Remy and Chris Melck
Contents
• Industry challenges
• Supply chain objective and key drivers
• End-to-end supply chain
• The journey
• Case studies
• Looking to the future
Industry Challenges
Industry Challenges 14th Americas School of Mines
Global trend in the mining industry (2003 – 2009)

PwC Mine Publication 2010
• Operating costs of the Top 40 only

decreased by 6% against a revenue
decline of 15% in 2009.
• A significant portion of the decrease in
costs was attributable to a decline in the
cost of energy. Another portion of cost
savings resulted from efforts to increase
operational efficiencies.
• The move to cut costs was driven, initially
at least, by necessity. While the reaction of
the industry was swift—it was just that—a
reaction.
Investing in LatinAmerica September 2010

Pricew aterhouseCoopers Slide 4
Understanding your challenges
Industry challenges Supply chain challenges

• How to realize sustainable margin • How do I meet the demands from
improvement and cost reduction operations?
minimizing the cost per unit of output at
• How do I control the escalating supply
the operational level.
chain costs?
• How to develop high-performing
• Is my supply chain a necessary burden
processes aligned with the business
or a competitive advantage?
objectives.
• How can technology help me to gain
• How to balance risk and growth in a
insight and analyze waste in my supply
complex world
chain?
• How to realize and sustain value from
• How lean should I be, and how do I get
mergers, acquisitions and divestitures
there?
• Why should I integrate or collaborate
with my supply chain partners?

Despite best efforts, mining companies are experiencing some

common supply chain issues that are contributing to cost escalation
• No documented supply chain strategy and alignment with corporate strategy.

• Lack of a strategic sourcing approach for most of the spend.
• Poorly organized warehouses.
• Lack of certification of suppliers with agreement.
• Lack of clear measures of supplier performance.
• Poor utilization of e-commerce tools.
• Fragmented inventory planning, not centralized.
• Infrequent review of safety stock by Stock Keeping Unit.
• Parts often missing when maintenance work is required.
• No demand forecasting for materials/parts; only min/max used.

Cost reduction and operational efficiency are key issues for mining
industry leaders, with a strong focus on their supply chains
• A recent survey of mining executives by Newport Consulting identified:

− Cost control and management as a clear focus area for 2010-11 with more than
50% of interviewed mining executives saying that they are focusing on
reducing or closely managing their organization's cost base.
− Furthermore, 44% of survey respondents indicated they will be placing a
central focus on operational efficiency, through increasing production and
utilization of resources, and reducing downtime and waste at mine sites.
• Approximately three-fourths of mining executives position their supply chains as
critical to cost containment for their overall businesses.
“ Today, senior management is looking for the Supply Chain Organization to deliver
more than just efficiency – it is being asked to deliver innovative cost reduction
strategies to help grow their company and present a market strategy differentiator. ”
AberdeenGroup, Supply Chain BI in Process Industries

Effective supply chain management has emerged as a strategic
imperative for mining companies
Trends
• Companies are developing more agile supply “A well-managed supply chain

chains to mitigate risk and boost competitive delivers the essential benefits of
advantage. consistently controlled costs,
reliable movement of inbound
• Companies are forging close partnerships with
supplies and outbound products,
suppliers to leverage expertise, ensure
and satisfied customers whose
continuity. expectations are met with an end
• Companies are re-evaluating global sourcing product's quality, availability, and
strategies speed of delivery.”
• Companies are reducing their supply chain’s

carbon footprint PricewaterhouseCoopers
Supply chain trends and best practices –
• Companies are taking advantage of technology Managing to achieve strategic benefit
to enhance supply chain visibility

Managing to achieve strategic benefit

Leading practices
• Build an agile system of resource allocation

• Position sourcing for strategic benefit
• Investigate supplier candidates against stringent criteria
• Cultivate value-based partnerships with suppliers
• Elevate environmental responsibility as an essential
criterion for suppliers
• Evaluate the environmental impact of process actions
• Create a delivery excellence culture
• Consolidate logistics operations
• Use technology to enhance the performance of delivery
operations
• Adopt lean practices to reduce logistics costs
Mining supply chains have fewer products, but significantly greater

operational complexity
Some of the complexities include:

• Operating in remote areas, long lead times
• Lack of local supplier diversity and resources
• Lack of skilled human resources in local
operations
• Infrastructure and capital investment
constraints
• Limitations on communication and information
technology
• Community and environmental constraints
• Local requirements and regulations

Supply Chain Objective and Key Drivers

Supply Chain Objective and Key Drivers 14th Americas School of Mines
The mining supply chain is at the heart of the operations and business
strategy
Inbound Mine operations Outbound
Customers
Suppliers
Single
or
multiple
assets

The objective of every supply chain is to maximize the overall value

generated
• The primary objective of supply chain management is to fulfill internal and

external demands through the most efficient use of resources.
• For example, for inbound logistics…
Activity and resource planning Supply of goods & services

Creating and capturing value and payment for supplies
in response to business needs
Contract
Identification of Sourcing Negotiating the Business
execution and
needs strategy best deal fulfillment
management
Developing a long term Ensuring compliance and

approach to key supply controlling performance
markets management

The linkage between financial performance and the supply chain has
several underlying areas for value creation potential
Financial performance Key drivers Supply chain Potential value creation levers
Reduce • Improved product/service availability

Supply Chain
procurement
Planning • Improved order fulfillment capability
costs
• Price premium
• Improved material flows
Procurement • Enhance warehouse productivity
Improv e Optimization
Operational Optimize cost through process improvements
structure
Effectiv eness • Set up tax optimized supplychain
Supply Chain Value

structures
Contract • Streamline logistics network for
Management
Improv e improved warehousing and
supplier transportation management
Shareholder relations &
Value agreements • Improve number of stocking points
Transportation for individual SKUs
Creation
Management
• Reduce inventoryplanning and
replenishment times
Improv e asset
utilization • Increase use of consignment stocks
Inv entory
Management • Reduce inventorybuffers
Improv e
Capital • Improve payment terms with
Productiv ity suppliers
Reduce Organizational
w orking capital Design
requirements
End-to-end business improvement journey
Zero Variability
Elimination of variability in
results, predictability & perfection
Level of people and 6

Waste Free
resource involvement Complete understanding of
value & elimination of waste,
in improvement flow and pull, perfection
Performance
Improvement
Continuous and breakthrough
improvements focused on runner Lean
priorities and value add activities
Standardization
Elimination of duplicate
processes and unnecessary
activity, visible owned processes
Process control
Processes documented, some
auditing, different standards &
multiple variations
Process basics Business process re-engineering

Written processes for regulatory
& HSE compliance, people
retain most process knowledge
Investing in LatinAmerica Time & Maturity September 2010

Lean thinking – seven types of waste (plus one)
Supply Chain Environment

• Inef f icient definition and lay out of warehouses
Motion • Lack of proximity to supplies
• “Chasing” approv als
• Waiting f or approv als
Waiting • Supplier response time
• Long lead times
• Inadequate planning and replenishment rules
Overproduction • Purchasing f or the sake of it
• Ignoring business needs and objectiv es
• High number of “urgent” requests
Overprocessing • Unnecessary processing steps
• High ov erall lead time
• High number of returns
Defects • Dissatisfied internal customers
• Missing deadlines
• High material stocks
Inventory • Excessiv e space requirements
• Redundant activ ities
• Unnecessary movement
Transportation • Extra handling
• “Mov ing inv entory”
• Untapped Human Potential

People • Lack of motivation to make improvements

End-to-End Supply Chain

End-to-End Supply Chain 14th Americas School of Mines
There are many opportunities to support the business strategy and

objectives through the supply chain activities
What portion of my items Hav e I properly Can I manif est Does my supply Is my supply chain How do we Do I manage product
should I keep in stock? considered tax innov ation as a chain design create agile to deal with manage returns and asset lif ecycle?
implications? competitiv e competitiv e supply /demand and rev erse
adv antage? adv antage? disruptions? logistics? Do I hav e the right
What is the lev el of
commonality among products through the
components, platforms and right channels at the
assets? right time?
Supply chain strategy and v ision
Is my safety stock aligned? How insightf ul is my

f orecast and market
Product management intelligence?
What’s the best way to mitigate Suppliers Customers
my supplier risk?
How are our serv ice
lev els?
How collaborativ e is my Inbound Operations Outbound
relationship with suppliers?
What is the best way
to lev erage supply
How do I deal with chain inf ormation?
underperf orming suppliers? Strategic sourcing and procurement
Is third party logistics
Is there a way to reduce (3PL) outsourcing a
complexity and cost for my v iable option?
inbound logistics operations? Organization, sy stems infrastructure and other stakeholders
Is inv entory optimized?

Hav e I f ully leveraged and
managed my external spend? Do my processes Are the processes What f unctions should I Will my organization
consider the ef f ect on integrated enough to centralize v ersus benef it f rom How do I mange
How well is internal demand the env ironment and respond adequately to distribute across my implementing AP&S procurement program
understood and shared? communities? demand v olatility? supply chain? technology ? compliance?

An agile and responsive supply chain pays dividends across the

enterprise
1.Supplychain strategy must support the business strategy Strategic

2.Robust implementation and change roadmap in place
Operations
3.Enterprise-wide view of current and future operations strategy
Network Desig n &
Optimization
Tax Effective Supply Chain

Tactical
1.Enabling technologyto support business strategy S&OP
2.Address share/stakeholder value and risk

management and compliance as guiding principles Dem and Forecasting
3.Analyze critical suppliers’ financial and operational
metrics to develop leading risk indicators
Inventory Planning
Operations Planning /Scheduli ng
1.Efficient and reliable processes Operational

2.Core foundational elements support an Transportation Warehouse Sourcing &
effective supplychain M anag em ent M anagement Procurement

The supply chain strategy must support the business strategy,
transforming operations to enable real strategic change and
competitive advantage
Focused on:
• Defining how the supply chain should operate
in order to meet both internal demands and
Strategic
Operations
shareholders needs (including warehouses and strategy
the role of 3rd party providers). Network Desig n &
Optimization
• Identifying the operational infrastructure Tax Effective Supply Chain
needs, the level of integration with operations, S&OP

core competencies to fulfill the internal demands
and support of the business strategy. Demand Forecasting
• Identifying and understanding the key Inventory Planning
elements of the supply chain and the most

relevant metrics suitable for the overall business
objective(s). Tr anspor tati on War ehouse Sour cing &
Management Management Pr ocurement
• Balancing supply chain efficiencies with tax
planning in order to achieve maximum
efficiencies while minimizing taxes.
Tactical supply chain decisions focus on adopting measures that will

produce cost benefits for a company
Focused on:
• Better establishing the parameters within
Tactical
which the supply chain will operate. It’s
Operations
about the determination of a set of policies and strategy
procedures that govern the operation of a Network Desig n &

Optimization
supply chain. Tax Effective Supply Chain
• Planning to deliver higher operation levels S&OP
and efficiencies, including: demand

management, forecasting and planning. Demand Forecasting
• Improved resource planning and asset Inventory Planning
utilization through collaborative planning

forecasting & replenishment (CPFR) with sales,
operations and maintenance. Tr anspor tati on War ehouse Sour cing &
Management Management Pr ocurement

Operational decisions are made with awareness of the strategic and

tactical decisions that have been adopted within a company
Focused on:
• Assessing and understanding transport and
logistics costs and performances, using
Operational
Operations
benchmarks and leading practices to identify strategy
improvement opportunities. Network Desig n &
Optimization
• Developing sourcing strategies and building Tax Effective Supply Chain
supplier relationships in order to reduce the S&OP

total cost of ownership for products and services,
increase quality and service, optimize the supply Demand Forecasting
chain and inventory levels and build the

Inventory Planning
organization's competitive position through
sustained cost and supplier improvement. Operations Planning /Scheduli ng
• Understanding and integrating operational Tr anspor tati on War ehouse Sour cing &
aspects such as warehouse management, Management Management Pr ocurement
consignment inventory, reduced order quantity,

JIT, technology, reverse logistics, handling
equipment, and fleet management.
Additional considerations for a mining supply chain
• Supply chain synergies should be considered

for mines located in the same area
• Corporate agreements should be leveraged
whenever possible to increase the purchasing
power from volume discounts
• Consignment stocks should be considered
whenever possible, to reduce working capital,
lead times and safety stock levels
• Transportation may also include tracking of
outbound shipments of mineral product (e.g.
metals concentrate)

The journey
The Journey 14th Americas School of Mines
Change is situational, transition is a process…
Change is situational: the new site, the new boss, the new team
roles, the new policy. Transition is the psychological process
people go through to come to terms with the new situation.
—William Bridges

Organizations awaken when people awaken…
All organizations learn when they adapt as the world

changes around them… some faster than others.
A Learning Organization is the one that “can create the

results and the future that they truly desire.”
—Peter Senge

Three states of organizational change
• old process • new process • letting go of old

• comfortable • new expectations • taking on new
• familiar • new skills • changing tasks and demands
• controllable • unknown or unfamiliar • may be unpredictable
• risky • coping with sense of loss and/or
gain
Machine
TRANSFORMATION
Unfreeze Transition
- Controlled - Interactive organism
- In charge - NOT business as
- Stable usual

Supply chain transformation approach
Assess Design Construct Implement Operate &

Rev iew
Strategy
Structure
Deliv ering Change
Create “Case Create Build New Rollout New Operate New

for Change”, Transformation Ways Ways of Organisation
Process
Initial Target Blueprint, of Working Working and and
Operating Model Detailed Design and Plan Ensure Implement
People and Scope and QuickWins Rollout Benefits are Continuous
Initiatives Realized Improvement
Technology
Driv ing Change
Change
Management
Programme
Deliv ery

Supply chain transformation – assess
Assess Generally 1 – 2 weeks
Tasks
A. Define transformation objectives Wave 1 Priority Screening
B. Create transformation baseline
• Our holistic approach reviews the entire supplychain with a
focus on those elements that drive costs and impact Wave 2 Opportunity
10 Opportunity
Busines s Impact
working capital; including inventorylevels and cash flow.
• Assess linkage between financial performance and supply 8
Wave 3 Opportunity
chain management. Opportunity
6
• Assess qualityand cadence of planning process, including
qualityand visibility of spend data. 4 Opportunity Opportunit y Op.
• Review of cost and complexityof supplychain. Opportunity Op.
• Assess coordination and support of information system to 2
Op.
the supplychain processes.

• Assess buying power and contract compliance/leakage, More
Easier
including comparison against peers. Difficult
Relative E ase of Implementation
C. Create case for change Drop, postpone
or re-assess
Note: Size of circle represents total category expenditur e
• Conduct a cost/benefit analysis for identified opportunities.
• Evaluate, select and prioritize opportunities.
• Develop transformation business case.

Supply chain transformation – design and construct
Priority Screening
Strategy
Structure
Wave 1
Process
Design / Construct
Wave 2
People
Wave 3 Technology
Generally 2 – 3 weeks
Tasks
A. Design transformed organization
• Set the vision, scope, direction, and design requirements for the organizational transformation
B. Construct changes (depends on the identified opportunity)
• Planning: integration with operations and maintenance, including planning, scheduling, and forecasting processes.
• Sourcing: supplier integration and strategic partnerships.
• Inventory: inventory stocks and turnover
• Warehousing: materials handling equipment and picking process, labour requirements.
• Transport: end-to-end lead times and transport costs.
• Technology: qualityof data and information flow integration necessaryto make informed decisions.
C. Develop implementation plans

Supply chain transformation – implement
Implement Timing depends on the identified opportunity
Impact
• Better alignment of supply chain with business strategy
Financial performance • Sustainable cost reduction solutions for direct and indirect materials and services
(often10% to 30% in savings)
Improv e • Total value from suppliers and optimized relationships (in terms of quality,
Operational
Effectiv eness responsiveness, value, etc.)
• Transparency and centralized control of external expenditures, through improved
data quality and spend visibility
Shareholder
Value • Minimized risks associated with financial controls and compliance management
Creation • Realignment of procurement resources to focus on other strategic opportunities
• Streamlined procurement processes and innovative management solutions
Improv e • Managed acquisition of goods and services to achieve the lowest total cost of
Capital
Productiv ity ownership
• Decreased or eliminated redundancy and bottlenecks in the procurement
systems
• Optimized vendor base to achieve cost and efficiency advantages; strengthen
relationships with vendors to create “partnering”/alliances
Investing in LatinAmerica
• Restructured procurement organization, processes, policies and systemsSeptember 2010
“What you believe, you can achieve”
• Increase procurement spend savings through implementation of 5% – 25%

strategic sourcing principles (dependent on type of materials and
services)
• Reduce operating costs through logistics network optimization, and 15% – 30%
applying lean principles
• Reduction of inventory carrying costs through increased inventory 8% – 15%
turns and safety stock elimination
• Reduce lead times through improved planning, process efficiencies 12% – 35%
and controls, technology support and supplier integration
• Labour savings through the elimination of redundant data entry 5% – 15%
• Increased equipment utilization through better planning, timely 10% – 30%
material delivery, and reduced idle time
• Reduce transportation costs through improved planning, process 8% – 16%
efficiencies and controls, technology support and supplier integration
Case studies
How have we been adding value in the resources supply chain?
Case Studies 14th Americas School of Mines
Rail network nearing capacity and government planning to sell assets

The opportunity for vertical supply chain integration arises
400
• The coal rail network of central Queensland
350
services the coal-rich Bowen Basin. 2015
Annual Railings Mtpa

300 Capacity
• It is divided into 4 distinct systems, comprising just
250
less than 2,500km of track, railing just under
2011
200 Mtpa, servicing close to 50 individual mine 200
Capacity
sites and terminating at 5 different coal terminals. 150
• The below rail network is owned by QR National – 100

Actual Forecasts
currently a government owned corporation. 50
• Above rail operations are conducted by QR 0

2000 2005 2010 2015 2020 2025
National and Asciano.
The coal rail network is close to capacity
System Mtpa Railed Kilometres Mines Utilization
Goonyella |||||||||||| 83.6 ||||||||||| 924 |||||||||||| 24 76%
• The rail networks are beginning to reach their
Blackwater |||||||| 54.4 |||||||||||| 994 ||||||| 15 95%
maximum capacities.
Newlands || 14.7 || 203 |3 92%
Moura | 11.3 ||| 301 || 4 71% • This environment presents interesting challenges
and opportunities to the coal miners operating in
the area.
The 4 Central Queensland coal rail networks

Client : QCIRG Consortium member

Provision of industry knowledge and financial acumen
Client challenge Client Consortium

Our client was part of the consortium bidding The tariffs are recognised Consortium Revenue
$5.1bn AUD for the below rail coal network of QR as revenue in QCIRG
National. $1,000 m
Client Expense (Tariffs) less
They lacked the resources and knowledge to ($100m) Operating Expenses
needed to understand the value of their portion of Depreciation
the bid and to engage a broad number of Amortisation
Client pays tariffs Finance Costs
stakeholders. to access the network Other Expenses
How PwC helped ($900m)
Through secondment , we provided much needed Client equals
valuation knowledge and mining experience. Net Profit Before Tax
We represented the client on several consortium $100m
level work streams and we prepared the Client receives dividends as a
portion of their investment less
communications for the CEO and investment
Tax Expense
committee. Dividends
($7m at 10% share) ($30m)
This helped our client make an informed decision .
equals
A dividend can by
paid out from the Net Profit After Tax
Consortium’s
net profit after tax $70m
Client : Queensland Rail Coal Division

Coal Contracting Improvement
Client challenge
QR had multiple contracts (19 mining companies,
50 coal mines) representing $1.5bn AUD revenue
per annum.
QR were not aware of the true lifetime value of the
contracts or the commercial risk present for both
parties.
How PwC helped
We evaluated all the existing contracts based on
lifetime NPV and risk factors. This allowed QR to
identify which contracts added value and at what
risk.
We developed a new coal contract template for new
contracts and for renegotiation of existing contracts.
The template included detailed policies covering
dual party benefit from improved performance,
tonnage variation and the impact of customer
operation performance. Metrics to measure
performance were also determined.
Client : Queensland Gas Company / BG Group

Landholder Education Material
Client challenge
A critical success factor for a CSG/LNG project is land access for prospecting or pipelines. QGC had to deal
with large number of land owners as well as make sure that QGC contractors new how to deal with
landowners appropriately and consistently.
How PwC helped

We developed a series of flyers written in plain
English and using engaging illustrations, explaining
how QGC’s operations may impact landholders.
We also developed induction material for QCG
contractors. This covered the land access function,
expected behaviours, communication guidelines and
how best to deal with disgruntled landowners.
Client : Queensland Gas Company / BG Group

Landholder Segmentation Tool
Client challenge
A critical success factor for a CSG/LNG project is land access for prospecting or pipelines. QGC had to deal
with large number of land owners and needed to determine how to prioritise their negotiations.
How PwC helped

We developed a landholder segmentation tool
to assist in planning and enable greater
efficiencies in the land access process.
The tool segmented the landholders based on
the expected ease of access and the business
of the access to that holding.
This helped QCG to prioritise their land access
negotiations appropriately.
Client : Anglo Coal Australia

Operational review of marketing and logistics function
Client challenge
Anglo Coal were convinced that operational inefficiencies existed in their marketing and logistics functions.
They needed to identify the problem areas and improve the processes through better design.
How PwC helped
We worked closely with the Anglo team to redesign the core processes to address what had been identified
as the priority operational inefficiencies. This led to the development and implementation of a new
organisational structure for the Marketing and Logistics team.
Since implementing our recommendations, Anglo has realised significant improvements in operational
performance and productivity.
Client : Xstrata Coal

Development of Pit to Port procedures manual
Client challenge
Xstrata lacked confidence in their logistics reporting, were too reliant on spreadsheet reports and did not
share information between mine sites and business units.
They decided to implement CoalMan Logistics as their new pit to port production system to manage their
logistics, planning, management reporting and information storage. This presented a significant change to
their existing operating methodology.
How PwC helped
We worked with Xstrata to develop uniform daily and monthly procedures for the new system. The new
procedures improved compliance, served as a learning tool and allowed the stakeholders to gain confidence
in a new system.
Looking to the future

Looking to the Future 14th Americas School of Mines
It is essential that lessons from the past are learned and that
organizations prepare for the next wave of change
• All evidence points towards long-term demand fundamentals remaining.

• But a weakening US dollar, stable labour costs and increasing parts, consumables
and energy prices present a real risk of further cost pressures.
• Increased globalization, cost volatility and risk are accelerating the pace of change.
• Supply chains will need more visibility and advanced decision-support analytics and
optimization to improve planning and process standards, interconnecting silo-
based operations
• Supply chains will have a bigger role in reducing the overall company’s carbon
footprint, as an obvious target to reduce emissions and waste.
• Mining companies need to develop more agile supply chains to better insulate
themselves from potential downturns during this cycle. Successful execution will
hopefully move the conversation from surviving in the new metals economy to
thriving in it.

Questions and Answers
©2010 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers refers to the network of member
firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

10h15 Supply Chain

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14th Americas School of Mines

Supply Chain Transformation

Global trend in the mining industry (2003 – 2009)

• Operating costs of the Top 40 only

Investing in LatinAmerica September 2010

Understanding your challenges

Industry challenges Supply chain challenges

Investing in LatinAmerica September 2010

Despite best efforts, mining companies are experiencing some

• No documented supply chain strategy and alignment with corporate strategy.

Investing in LatinAmerica September 2010

• A recent survey of mining executives by Newport Consulting identified:

Investing in LatinAmerica September 2010

• Companies are developing more agile supply “A well-managed supply chain

• Companies are reducing their supply chain’s

Investing in LatinAmerica September 2010

Managing to achieve strategic benefit

• Build an agile system of resource allocation

Mining supply chains have fewer products, but significantly greater

Some of the complexities include:

Investing in LatinAmerica September 2010

Supply Chain Objective and Key Drivers

Inbound Mine operations Outbound

Investing in LatinAmerica September 2010

The objective of every supply chain is to maximize the overall value

• The primary objective of supply chain management is to fulfill internal and

Activity and resource planning Supply of goods & services

Developing a long term Ensuring compliance and

Investing in LatinAmerica September 2010

Reduce • Improved product/service availability

Supply Chain Value

End-to-end business improvement journey

Level of people and 6

Process basics Business process re-engineering

Investing in LatinAmerica Time & Maturity September 2010

Lean thinking – seven types of waste (plus one)

Supply Chain Environment

• Untapped Human Potential

Investing in LatinAmerica September 2010

End-to-End Supply Chain

There are many opportunities to support the business strategy and

Is my safety stock aligned? How insightf ul is my

Is inv entory optimized?

Investing in LatinAmerica September 2010

An agile and responsive supply chain pays dividends across the

1.Supplychain strategy must support the business strategy Strategic

Tax Effective Supply Chain

2.Address share/stakeholder value and risk

Operations Planning /Scheduli ng

1.Efficient and reliable processes Operational

Investing in LatinAmerica September 2010

• Identifying the operational infrastructure Tax Effective Supply Chain

needs, the level of integration with operations, S&OP

• Identifying and understanding the key Inventory Planning

elements of the supply chain and the most

Tactical supply chain decisions focus on adopting measures that will

procedures that govern the operation of a Network Desig n &

• Planning to deliver higher operation levels S&OP

and efficiencies, including: demand

• Improved resource planning and asset Inventory Planning

utilization through collaborative planning

Investing in LatinAmerica September 2010

Operational decisions are made with awareness of the strategic and

• Developing sourcing strategies and building Tax Effective Supply Chain