1. ISQA 479 Warehouse Locations International Issues

2. Vale Brasil

3. VALE BRASIL Flag SINGAPORE DWT 400,000 tonnes Speed (knots) 14.8 Draught (m) 23.00 (75.46 ft) Depth Moulded (m) 30.40 (99.74 ft) Breadth (m) 65.00 (213.25 ft) Length 362.00 (1,187.66 ft) (LO) Engine MAN-B&W 7S80ME-C8 Power 27,162 (Kw) For Distribution of Iron Ore to China

4. Distribution Strategies  Customer Locations  Supplier Locations  Numbers of DCs  DC Locations  Inventory Strategy  What to Stock  How Much  At Which Locations  Transportation Strategies

5. Warehouse Locations  1 Warehouse: Henderson KY 2.28 803  2: Ashland KY; Bakersfield CA 1.48 487  3: Allentown PA; McKenzie TN; Bakersfield CA 1.29 378  4: Lancaster PA; Meridian MS; Chicago IL; Bakersfield CA 1.20 316  5: Summit NJ; Dallas TX; Macon GA; Chicago IL; Bakersfield CA 1.13 264  6: Summit NJ; Dallas TX; Macon GA; Pasadena, CA; Chicago IL; Tacoma WA 1.08 236  Yellow: Days in Transit Green: Miles

6. Warehouse Locations  7: Summit; Chicago; Tacoma; Gainesville; Dallas; Lakeland, FL; Pasadena 1.07 216  8: 7 Plus Denver CO 1.05 200  9: Summit; Chicago; Alhambra CA; Gainesville; Dallas; Tacoma; Lakeland; Denver, Oakland CA 1.04 187  10: Newark NJ; Rockford IL; Alhambra CA; Mansfield OH; Gainesville GA; Palestine TX; Tacoma WA; Lakeland FL; Denver CO; Oakland CA 1.04 173

7. International Transport Issues  Containerized  Container Acquisition  Inland  Wharfage and Handling  Loading  Transit  Wharfage and Handling  Inland  Final Delivery  Bulk  Ship Charter  Inland Transport  Bulk Loading Facility  Stow and Trim  Transit  Bulk Unloading Terminal  Inland Transport  Final Delivery

8. International Issues  Documentation  Certificates of Origin  Export Permits and Documentation  Inspection Certificates  Import Documents  Duties and Tariffs  Health/Pest Inspections and Certificates  Others

9. International Issues  Payment  Up Front  On Account  Letters of Credit  Irrevocable  Confirmed  Standby

10. Goals of Supply Chain Management  Quality  Time  Reliability  Flexibility  Cost

11. Supply Chain Risks  Social and Religious Conflict  Terrorism  Natural Resource Dependency  Natural Resource Depletion  Supply Chain Uncertainty  External vs Internal Risks

12. Transaction Risk

13. CostsCosts Correct Transaction Cost Time Total trans. cost Admin cost Material cost Logistical cost Transaction origin Transaction conclusion

14. Typical Measured Costs  Material Cost  Service Cost  Administrative Cost  PO Cost  Receiving  Accounts Payable  Freight

15. Costs Typically Not Measured  Back Orders  Late Deliveries  Defective Material Costs  Costs of Rejected Goods  Prod’n Stop Costs  Project Delay Costs  Air Freight  Cost of Warranty Failures  Extra Inventory Cost  Services Incorrectly Performed  Invoice Errors  Highly Variable Lead Times  Freight Damage

16. CostsCosts Time Total trans. cost Transaction origin Actual conclusion Expected transaction Cost overrun Time delay Specification questions from supplier Raw material delays Freight damage Invoice errors

17. Who Pays?

18. Additional Supply and Logistics Risks  Origin Risk Analysis  Natural Disasters  Labor Issues  Political Issues  Logistics Risk  Capacity  In-transit Loss or Damage  Labor Issues  Clearance Delays  Infrastructure Constraints

19. Additional Supply and Logistics Risks  Inventory Risk  Loss or Damage  Obsolescence  Shrinkage  Technology Risk  Bad Selection Process  Lack of Training  Late Adoptor

20. Internal Risks  Functional Issues  Engineering Late  Sr Mgmt Approval  Poor Specifications  Specifications Late  Rush Orders  Poor Forecasting and Planning  Policy Issues  Cheapest Supplier  No Standardization  No Supplier Visits  Outsourcing  Lean  FOB Destination  ERP Selection

21. External Risks  Supplier Risks  Late Shipment  Quality  Financial Failure  Costs  Logistical Risks  Late Shipment  Freight Damage  Capacity Issues  Infrastructure  Costs  Global Risks  Global Economy  Currency Fluctuation  Political Instability  Natural Disasters  Raw Material Availability  National Risks  Inflation  Retirements

22. Infrastructure Risks  Infrastructure Deteriorating Faster than Repair  Congestion at All Levels  Difficulty Locating Logistical Capacity  Increased Lead Times  Increased Inventories  Increased Costs  Increased Supply Chain Uncertainty and Risk  Losing Ground to Other Countries

23. Risk Management  Identify Risk  Assess Probability  Devise Strategies  Proactive  Reactive  How to Eliminate High Probability/Low Cost Events

24. Avoiding Extra Cost Risk  Good Specifications and Statements of Work  Quality Control and Monitoring  Rule of 10  Expediting  On Time Delivery  Logistics Management  Freight Damage  Correct Delivery  Holding Suppliers Accountable

25. Impacts of Supplier Failures  Air Freight Study  50% is from Supplier Failures  Construction Project Study  From 16 to 23 Percent of ENTIRE Project Costs Attributed to Quality Failures  Increasing Focus on Supplier Accountability

26. Risk Management  Global Supply Chains Increase Risk  Continuity (Risk) Planning  Suppliers’ Plans  Carriers  Geographic Dispersion of Suppliers  Emergency Inventory

27. Risk Management  Good Forecasting  Intense Market Study  Careful Supplier Selection  Superior Supplier and Carrier Communication  Problem Prevention Plans  Comparison to Disaster Planning

28. Risk Management  Disaster Planning  Natural Disasters  Supplier Failures  Financial  Labor Interruptions  Supply Chain Risks  Security  Conformance  Supplier Environmental and Social Responsibility

29. Supply Chain Risks?

30. Combating Supply Chain Risk