Supply chain technology that delivers ROI

Article

Supply chain technology that delivers ROI

Linda Tucci, Senior News Writer
AMR Research this week came out with its list of the world's top 25 users of supply chain technology. The second-annual ranking singles out manufacturers and retailers that are investing in cutting-edge IT -- take that Nick Carr -- to gain competitive advantage.

Winners range from beer maker Anheuser-Busch in the No. 12 spot, praised for its ability to drive demand, to beauty products maker L'Oreal, No. 22, a cash cow whose 20% return on assets (ROA) was the highest on the list. Dell held on to its top spot -- no surprise there -- and Coca-Cola lost some fizzle, moving from No. 17 to 25.

Newcomers include: Samsung Electronics, No. 7, which capitalized on the insatiable demand for electronics; Motorola, No. 15, whose reinvented supply chain (and Razr) helped steer its big turnaround; and Publix Super Markets, at No. 23, with ROA 8 times the peer average and high growth. Also new: the pariah of global sourcing, Nike, at No. 21, demonstrating "plenty of operational skill" with higher than average ROA and inventory turns.

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According to AMR, these are not your father's supply chains. (Indeed, none of the Big Three made the list. Toyota Motor ranked No. 5.) The old factory-centric supply chain is dead. Long live DDSN, the demand-driven supply network that can leap countries in single bound, ferry massive amounts of information in an instant and satisfy fickle consumer tastes almost as fast -- while contributing to profitability.

AMR found that the best supply chains carry 15% less inventory, are 60% faster to market and complete 17% more perfect orders. They shape, not react to, market demand; embed new ideas in operations and manage variability through mathematics.

Companies that don't do this? They'll be eaten, says AMR, as evidenced by the No. 2 slot -- a Gillette-gobbling Procter & Gamble.