Supply chain's Top 25
Staff -- Purchasing, 1/13/2005 2:00:00 AM
Perfect order rate. Forecast accuracy. Total supply chain costs. The ability to excel at those and other demand-driven metrics is what separates the companies with the best supply chains from the rest.
That's the conclusion of Boston-based market research firm AMR Research, which has compiled a list of what it considers the companies with the top 25 supply chains. The key differentiator between the top 25 and everyone else: how they leverage Demand Driven Supply Networks (DDSN) and their ability to understand that "supply chain performance is characterized by a hierarchy of metrics, including perfect order rate, total supply chain costs and forecast accuracy."
The top five: Dell, Nokia, Procter & Gamble, IBM.
Kevin O'Marah, vice president of research and lead analyst for the report said the list was compiled using financial metrics such as return-on-assets, inventory turns and trailing 12-months growth. These metrics, combined with AMR's opinion of each company's supply chain performance (which is based on field research and case studies), led to the composite ranking score.
| Company | Composite score* | AMR's Comments |
| Dell | 20.75 | The defining DDSN business, growing 17% in the PC business on $40 billion revenue base |
| Nokia | 13.31 | Supply chain best practices turn ideas into profitable businesses |
| Procter & Gamble | 11.70 | P&G's consumer-driven supply chain is the defining architecture for large consumer companies |
| IBM | 11.31 | Overhauled its hardware supply chain and product development processes 70% better, faster and cheaper |
| Wal-Mart Stores | 11.27 | Everyday low prices defines the customer demand driving this supply chain |
| Toyota Motor | 11.08 | Lean is one of the top three best practices associated with benchmarked supply chain excellence. Toyota literally wrote the book. |
| Johnson & Johnson | 10.93 | Shows leadership delivered with embedded innovation into multiple channels |
| Johnson Controls | 10.70 | Pioneered such principles as product platform strategies in the hypercomplex engineering challenge of the auto industry. |
| Tesco | 9.43 | UK-based grocer was first to really succeed with direct-to-consumer sales while maintaining killer inventory turns and growth |
| PepsiCo | 9.10 | Consumer-based business "sense and respond" to the pulse of demand with product innovation and lean supply chains |
| Nissan Motor | 9.09 | Combines much of Toyota's execution with its own highly successful design |
| Woolworths | 8.80 | Supply chain operations of this Australian retailer are regarded as pioneering in the use of 21st century supply chain principles |
| Hewlett-Packard | 8.30 | Combines some units in transition with others that are world-class and has merged the CIO and supply chain function in one individual |
| 3M | 8.09 | Extraordinary combination of the practical and cutting edge has units like Industrial Services operating in a DDSN mode |
| GlaxoSmithKline | 7.95 | GSK innovates not only on discovery but on industrialization and commercialization of new drugs |
| POSCO | 7.85 | Korean steel giant has begun to garner attention for its extraordinary success in managing a hugely capital-intensive business |
| Coca-Cola | 7.69 | Coke knows how to quickly cycle consumer needs, tastes and trends back to the market with winning products |
| Best Buy | 7.53 | By realizing the DDSN principle, the retailer has radically leaned inventories and delivered enviable in-stock positions |
| Intel | 7.47 | Managed to be massively asset intensive and yet nimble in the market |
| Anheuser-Busch | 7.45 | Born-on dating is a supply chain challenge that other brewers cannot easily meet. No one has take real-time demand responsiveness farther than A.B. |
| The Home Depot | 7.29 | Cutting edge in logistics and innovative services |
| Lowe's | 7.00 | Its faster growth challenges nemesis Home Depot via a consumer-friendly shopping experience |
| L'Oreal | 6.98 | By telling consumers "they're worth it", L'Oreal has shaped demand and delivery |
| Canon | 6.94 | Engineered a new supply chain and rapid growth |
| Marks & Spencer | 6.89 | RFID pioneer managing to grow and stay lean |
| *AMR used a formula of various metrics to arrive at this score | ||
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