Supply Chain Management is the elusive combination of art and science that goes into improving the way a company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers, and RARE Energy has perfected the art. As a result, it was awarded the Netgain contract by Sasol to manage its supply chain in 2000. Netgain scrutinises the total cost of ownership, embracing the direct and indirect costs associated with the buying, owning, using, maintaining and replacing of materials and services. RARE's contract embraces Sasol’s maintenance, repair and operational requirements and included evaluation for the management of Sasol’s PFF stores and the introduction of new forms of distribution. Sasol has seen fit to extend the contract to 2008 in order to gain optimal benefit from initiatives already under way.

Supply Chain Management is in essence based on the following five components for supply chain management as practised by The RARE Group:

Plan
A strategy for managing all the resources that go toward meeting customer demand for a product or service is needed, and The RARE Group develops a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

Source
Choosing the suppliers that will deliver the goods and services needed to create your product or service is essential. This is done by developing a set of pricing, delivery and payment processes with suppliers and creating metrics for monitoring and improving relationships. Also, processes for managing the inventory of goods and services received from suppliers, including receiving shipments, verifying them, transferring them to clients’ manufacturing facilities and authorizing supplier payments are developed.

Manufacture
RARE schedules the activities necessary for production, testing, packaging and preparation for delivery. With manufacturing being the most metric-intensive portion of the supply chain, quality levels, production output and worker productivity are constantly measured.

Deliver
This component is often referred to as logistics. The RARE Group coordinates the receipt of orders from customers, develops a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.

Return
This is usually the most problematic component of supply chain management. The RARE Group overcomes this by creating a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.

The RARE Group has access to over 150,000 tons stockholding in 52 locations worldwide as well as a worldwide network of accredited suppliers and manufacturers. Also, by leveraging group purchasing it is able to achieve significant cost reductions.