The Postal Service's Transformation Plan states that "adopting business-driven purchasing and materials management procedures will enhance supply chain management." Supply chain management (SCM) has become one of the most successful aspects of contemporary business. To increase customer satisfaction and reduce costs, the Postal Service adopted the SCM philosophy and its attendant business practices as a key enabling strategy to Postal Service transformation. This integrated business approach aims to achieve optimal efficiencies and cost reductions at every point in the purchasing and supply stream, from the supplier's supplier to the customer, through disposal. During 2003, Supply Management succeeded in achieving its business objectives and realized more than $469 million, including $84 million of capital, in cost reductions, cost avoidance, and revenue generation benefits while gaining new efficiencies. Since 2000, cumulative

SCM cost avoidance, cost reductions, and revenue generation benefits exceed $700 million, including $145 million of capital.

     This year, Supply Management achieved greater cost efficiencies and quality management by centralizing purchasing activities, aggregating requirements to leverage volume, reducing the supplier base, instituting standardized requirements based on historic demand, implementing a Postal Service-wide paperless requisitioning system, increasing the number of electronic catalogs within eBuy, and participating in strategic partnerships that draw upon specific expertise and capabilities of both the Postal Service and its suppliers.

     To achieve the Postal Service's business goals, SCM depends upon close interaction among end users, buyers, and suppliers with a focus on creating long-term contracts and partnerships, as well as ongoing analysis and improvement of operating and administrative processes and costs. To manage these