Life is Good at the Top of the Supply Chain

AMR Research has weighed in with a report that names the top 25 companies embracing supply chain best practices and technologies. The AMR Research Supply Chain Top 25 and the New Trillion-Dollar Opportunity identifies Dell Computer as the best, calling its growth of 17% in the PC business on a $40 billion revenue base “phenomenal.” Boston-based AMR used financial metrics such as return on assets, inventory turns and trailing 12 months growth, combining those with its analysts’ opinion of each company’s supply chain performance based on field research and case studies, to arrive at a composite ranking score. Dell’s composite score of 20.75 was far ahead of second-place Nokia’s 13.31, though the cell phone manufacturer was said to have supply chain best practices that “turn ideas into profitable businesses.” Coming in at number three was consumer products powerhouse Procter & Gamble, with IBM fourth and Wal-Mart fifth.

IBM, in particular, is cited in the report as a company harnessing the benefits of supply chain best practices. The report notes that IBM began tying all the pieces of a supply chain together in 2002 — managing over 30,000 suppliers, offering 78,000 products and operating 13 manufacturing plants in nine different countries. The result was transformation of the supply chain from a cost of doing business into a competitive advantage, and a significant impact on IBM’s business. Over the last two years, IBM has reduced cost and expense by more than $12 billion and inventory levels to a 30-year low, while the amount of sales is increasing. IBM has increased intra-division part reuse from 2% to over 50% and annual part number reductions range from 20% to 38%.

Rounding out the Top 25 are:
Johnson & Johnson
Johnson Controls
Best Buy
Home Depot
Marks & Spencer

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