Friday, March 7, 2008

Supply Chain Excellence - Today's best driver of bottom-line performance

According to a recent report from Boston-based AMR Research Inc., companies that excel in supply-chain operations perform better in almost every financial measure of success. Where supply-chain excellence improves demand-forecast accuracy, companies have a 5% higher profit margin, 15% less inventory, up to 17% stronger “perfect order” ratings, and 35% shorter cash-to-cash cycle times than their peers. Companies with higher perfect-order performance have higher earnings per share, a better return on assets, and higher profit margins — roughly 1% higher for every three percentage-point improvement in perfect orders.

“The basis of competition for winning companies in today’s economy is supply-chain superiority,” says Kevin O’Marah, vice president of research at AMR Research. “These companies understand that value-chain performance translates to productivity and market-share leadership. They also understand that supply-chain leadership means more than just low costs and efficiency — it requires a superior ability to shape and respond to shifts in demand with innovative products and services.”

The above is a highlight of the supply chain importance in today's businesses, referenced from an article in BusinessWeek. Here's a link to the article.

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