Volvo company:

Founded in 1927, Volvo is a multinational vehicle manufacturer with production facilities

in 25 countries, 74,000 employees, and sales in more than 100 markets. Volvo Group's
sales totalled 130 billion SEK in 2000. Volvo's carmaking division was sold to Ford in
1999. Volvo's stated aim is 'to contribute actively to the development of efficient, safe,
environmentally compatible and economically competitive transport systems for goods
and passenger traffic'. The average Volvo vehicle has a lifespan of 19 years. Volvo has
declared that 'all business areas shall have their environmental management systems
certified in accordance with ISO 14001 no later than 31 December 2001.' Similar
requirements have been introduced for its suppliers, with a deadline two years later.

Supply chain strategy:

Responsible purchasing involves managing risks, encouraging correct behaviors, and
building long-term relations with our suppliers to improve social, environmental and
business ethics in our supply chain.

Managing our supplier base

Our suppliers can be divided into two groups:

Suppliers of automative parts and components

Suppliers of other services and parts

Generally we source close to our production sites to ensure efficient flow of supplies. This means
that most suppliers are located in Europe and North America. At the same time, the Groups
expansion in Asia has led to an increased number of new suppliers located in Asia.

As a general rule, we stipulate that sales to the Volvo Group should account for less than 30% of a
suppliers turnover. This approach decreases a suppliers exposure when delivering to a cyclical
industry such as ours.

Pursuing responsible sourcing principles

We believe that responsible sourcing results in high productivity and stable long-term relationships,
which benefit all parties. Our Code of Conduct sets out the principles and minimum standards. Since
1996, our responsible sourcing program has consistently increased supplier requirements on
environmental issues, business ethics, human rights and social issues.
 All suppliers are requested to appoint a senior executive as their contact person for the Volvo Group.

Environmentally, the Volvo Group requires most suppliers to be certified by a third-party

environmental management system. More than 94% of Volvo Group spending on automotive
products comes from suppliers that are certified in accordance with ISO 14001 or its equivalent.

In the EU, our suppliers must also comply with the Volvo Groups position on chemicals and harmful
substances, in accordance with REACH (Registration, Evaluation, Authorization and Restriction of
Chemicals) legislation.

Training colleagues and suppliers on responsible sourcing

During 2014, we continued the rollout of our series of CSR roadshows. The vast majority of the
Volvo Groups purchasers and quality engineers have now had training on the business ethics,
social justice and environmental issues affecting our supply chain. In early 2015, we will finalize the
training with sessions in Lyon and Gothenburg.

In 2014, CSR training was held with suppliers in Turkey and Poland. In 2015 we will extend this
training to India and China.

Developing ethical assessment

In line with general automotive industry practice, the Volvo Group uses a self-assessment approach
to evaluate supplier performance and compliance with our ethical requirements. The Volvo Group
uses the Supplier Evaluation Model to evaluate our potential and current suppliers. An ethical self-
assessment is part of the application process completed by all potential suppliers. Core suppliers
and especially those in high-risk countries or segments are required to update their assessments on
the Volvo Supplier Information Base before new contracts are signed.

Our supplier assessment poses approximately 40 questions relating to the principles in our Code of
Conduct, including:

Social performance

Work environment and conditions

Human and labor rights

Environmental care

Business ethics
Since 2009, most new suppliers to our company have to be approved by the Groups Global
Sourcing Committee. Potential suppliers of automotive products are also evaluated by a quality
engineer, using the Groups Supplier Evaluation Model. In addition, we conduct regular site visits
during product development, which gives us more direct control over our existing supply chain.

How we deal with non-compliance

The ethical assessment includes a requirement for an action plan where a supplier does not achieve
a pass on a critical aspect. Among the most common causes for not passing are a lack of adequate
compliance processes, and systems to enforce the Volvo Groups CSR and sustainability
requirements down to suppliers own sub-contractors.We work with non-compliant suppliers to help
them resolve issues and ensure that our requirements are met.

Changing Supply chain strategy:

The Volvo Car Group has announced that it will build its first manufacturing plant in the US, in a bid
to become a truly global carmaker. In a statement Volvo indicated that it would spend around $500m,
and would eventually produce at least 100,000 cars per year for both the US and export markets. its
current assembly plants are located near Gothenburg, Sweden and Ghent Belgium, as well as in
Chengdu and Daqing, China.
Setting up a new US production facility is long term strategic decision. The new factory is expected
to start up in 2018 so we need to look beyond 2020 in the business case. A strong presence in the
US is crucial to our global growth plans and local manufacturing will secure sustainable profitability
independent of fluctuations in exchange rates as labour costs will be in USD and a large share of
components will be sourced locally, a spokesperson told Automotive Logistics

The company said that the new announcement highlights its long-term commitment to the US
market.

Building a US plant also appears to a strategy intended to improve logistics and decrease vehicle
lead times.

The move towards more built-to-order vehicles, as well as more regional production, is part of a
wider supply chain strategy for Volvo Cars.

Volvo Cars announced that it is restructuring and simplifying its global organisation with the creation
of three main regions for the Americas, Asia and Europe, Middle East and Africa (EMEA).

In recent years, Volvo Cars has also made significant changes to its logistics management
strategy, including the creation of global inbound and outbound logistics operations and procurement
teams, and global IT systems.

Competitive strategy :
It believes it will gain competitive advantage by adopting principles of sustainability.
Volvo's environmental policy, adopted in September 1997, is characterized by a holistic view, which
strives for continuous improvement, technical development, and resource efficiency.

Taking a holistic view to minimize environmental impacts of products and processes requires - for
example, taking account of the complete product life cycle, and seeking to ensure that its partners
maintain environmental management systems;

Striving for continuous improvement throughout the company operations, by formulating,

communicating, and monitoring clearly-defined goals and involving all employees;

Exceeding customer demands for environmental care through technical development and an active
research and development process.

Mercedes Company

Type Division

Industry Automotive industry

Predecessor Benz & Cie. (1883-1926)

Daimler-Motoren-Gesellschaft(1890-
1926)

Founded 1926

Founder Karl Benz and Gottlieb Daimler

Headquarters Stuttgart, Germany

Number of locations Jakarta

Medan
Kuala Lumpur
Singapore
Bandar Seri Begawan
Shanghai
Hong Kong
Macau
Taipei
 Area served Worldwide

Key people Dieter Zetsche, Chairman

Products Automobiles
Trucks
Buses
Internal combustion engines
Luxury vehicles

Services Financial services

automobile repair

Owner Daimler AG

Divisions Mercedes-AMG
Mercedes-Maybach

Mercedes-brabus

Slogan The Best or Nothing

Supply chain strategy

Mercedes Reorganizes Its Supply Chain Network to Reduce Auto Costs
As an expanding global footprint requires an ever-more efficient supply chain, luxury
automaker Mercedes-Benz is in the process of reorganizing of its supply chain network to
achieve that goal.
the company is aiming to reduce logistics costs by about 20% per vehicle.

When the Center becomes fully operational in 2016, it will ship several hundred sea
containers every week via inland waterways or rail to Antwerp and Bremerhaven, where
they will be loaded onto freighters and transported to Beijing (China), Tuscaloosa (U.S.),
and East London (South Africa).

Up until now, logistics service providers in Bremen were solely responsible for managing
shipments of materials from German and European suppliers to the major Mercedes-Benz
plants abroad. This new arrangement will allow deliveries from European suppliers south of
the Main River will no longer have to be shipped over long distances, which will significantly
reduce the logistics costs, the company explained.

Growing demand in growth regions like China and NAFTA with demand for local suppliers
in these regions and the increasingly strategic employment of regional suppliers for global
deliveries of production materials could result in the company opening similar co
By reducing our logistics costs per vehicle we will improve our
competitiveness, since logistics have a major impact on our overall cost
position.nsolidation logistic centers.

Competitive Strategy:
Company Introduction Mercedes Benz is firmly established as an independent brand within one of the
world's leading car companies.

The company has a super network that ensures the flow and exchange of information from various
departments within and between the company and it's strategic partners.

The five competitive forces-entry, threat of substitution, bargaining power of buyers, bargaining power
of suppliers, and rivalry among current competitors-reflect the fact that competition in an industry
goes well beyond the established players. All five competitive forces jointly determine the intensity of
industry competition and profitability, and the strongest force or forces are governing and become
crucial from the point of view of strategy formulation. The bargaining power rivalry is what keeps
Mercedes-Benz on the run, as such that it can keep ahead of BMW and others, who are always there
and always threatening their market share.

Power of Customers Buyers compete with the industry by forcing down prices, bargaining for higher
quality or more services