I recently finished a book called The New Supply Chain Agenda (2010 Slone, Dittmann & Mentzer) which was written by former big box supply chain managers and University of Tennessee professors. The book sites a direct linkage to supply chain excellence and shareholder value/profits. It also outlines five steps companies can take to achieve supply chain excellence. But more importantly, this book identified a huge opportunity for companies to outperform their competition (keep reading, this is good stuff!).
I felt the book was very well researched and cited a lot of proof of how supply chain excellence can help companies to achieve serious value and intern profits for any company. Slone, Dittmann and Mentzer talked in big box company terms but their message holds true for large, medium and small companies alike.
The writers also smartly referenced AMR Research quite a few times in this book. AMR Research is a well respected research firm in the area of supply chain. This organization sells research on supply chains to help companies improve the way they do business. Every year they publish a Top 25 list of the best run supply chains. To get an idea, the top ten of their top twenty five for 2010 looks like this:
1. Apple
2. Proctor & Gamble
3. Cisco
4. Wal-Mart
5. Dell
6. PepsiCo
7. Samsung
8. IBM
9. Research In Motion
10. Amazon.com
It’s hard not to notice that the companies above are highly successful. Slone, Dittmann and Mentzer believe there is no coincidence between these companies high profits and their well run supply chains.
One fact that Slone, Dittmann and Mentzer’s own research uncovered through the years that I found absolutely fascinating is (here is the good part!) less than 15% of companies have a supply chain strategy. Being involved in hundreds of companies supply chains for more than 14 years, I concur that is likely quite accurate.
So considering the ideas above, just think about this for a moment: THERE IS A PROVEN DIRECT LINKAGE BETWEEN ACHIEVING SUPPLY CHAIN EXCELLENCE AND HIGH PROFITS; AND LESS THAN 15% OF COMPANIES EVEN HAVE A SUPPLY CHAIN STRATEGY.
It’s worth saying again. THERE IS A PROVEN DIRECT LINKAGE BETWEEN ACHIEVING SUPPLY CHAIN EXCELLENCE AND HIGH PROFITS; AND LESS THAN 15% OF COMPANIES EVEN HAVE A SUPPLY CHAIN STRATEGY.
Should we say it again? Okay, you get the picture I’m sure. So ponder this: If you are in a business that is highly competitive or highly commoditized and less than 15% your competition implements something that will separate them in the eyes of their customers isn’t there a huge opportunity here for your company? This definitely gives you something to think about huh?
I’m not saying implementing a supply chain strategy is easy. In fact, it is quite involved and requires changes in personal, company culture and suppliers. But with less than 15% of the competition even thinking about this, evolving a supply chain strategy slowly and steadily could win the race for any company.
QUESTION: What percentage of your competitors would you say achieve supply chain excellence? (any answers may be used in a future article or blog post; sources of the answers will be anonymous in any future posts)
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