Trends and looking ahead
- Supply chain management

Supply chain interactions are changing. Maintaining a good working relationship across your supply chain provides business opportunities, while helping to be aware of and manage risks that might exist.

Due to a growing commitment to the environment by corporations, governments and increased public scrutiny worldwide, companies are being required to take responsibility for what is happening both at their site, and up and down their supply chain. There are a number of examples where companies have incurred significant loss, both from public scrutiny and profit losses due to issues in their supply chain. Sony was required to take back more than1 million PlayStations due to a component problem (see below) and a number of Australian and international banks have received significant media attention and public backlash due to their financing of particular forestry operations.

Another example is where procurement and cleaning contracts are increasingly demanding evidence of environmental 'credentials' from the service provider.

Suppliers and customers alike are engaging one another to identify opportunities for shared value, generating efficiency gains and minimising environmental impact. By working collaboratively, opportunities open for innovative solutions in the supply of raw materials and production components that achieve both improved economic outcomes for all collaborating businesses and associated environmental benefits. An example of this shared value is a car manufacturer engaging a paint supplier to paint cars. In the traditional model, the supplier is paid based on the volume of paint used. This model provides little incentive for the paint supplier to use paint efficiently, apart from maintaining its contract with the car manufacturer. By modifying this supply chain interaction such that paint is purchased based on the number of cars painted, benefits are passed on to the car manufacturer, car buyer and environment, as there is now a financial incentive to redesign the painting process to minimise wastage.

Supply chain management

• Have a look at the system an international bank is using to help manage its supply chain risk.

Environmental supply chain management

• Research paper on supply chain management with case studies and an outline of future trends in this area.

Supply chain key element in managing business risk, says Europe's accountants

• The business case for sustainable supply chains recently got a boost from the Federation des Experts Comptables Europeens (FEE), the representative organization of the European accountancy profession.

Sony swaps PlayStation One cables
By Reuters. December 5, 2001.

• Sony is replacing peripheral cables for 1.3 million PlayStation One game consoles after the Dutch government blocked sales of the machines because of health and environmental concerns. The Dutch government said on Tuesday it had blocked shipment of the consoles and 800,000 accessories bound for the European Union market in a warehouse in the Netherlands because the cables contained too much cadmium.

Greens take aim at Gunns customers

• Environmentalists have escalated their battle against Tasmanian timber and logging group Gunns by going over the company's head, direct to its powerful Japanese customers By Leon Gettler. The Age, November 24, 2003.