Recent research by AMR reveals the 25 most adept firms at using their supply chains. Often, those corporates which are advanced in managing their supply chains also tend to be the most enthusiastic about the use of supply chain finance.
That’s partly because they have the infrastructure in place to deal with SCF and also because finance is the one area, which is yet to be completely integrated into the supply chain.
AMR, a company researching the intersection of business process with technology, has identified what it believes to be 25 companies “whose leadership has advanced the game the farthest.” The overall winner was Applie, toppling last year”s victor, Nokia. Apple has shifted away from a 20th century production efficiency mentality towards a new era of value based on ideas, design and content.
AMR notes that the term supply chain carries baggage from the days when the factory was king. Today’s modern supply chain encompasses not just materials, but intellectual property and money, which are major components of value creation within the enterprise.
AMR talks of the need for organisations to take a demand-driven approach to their global supply chains in terms of design and execution. “Simply put companies employing it perform better financially in terms of return on assets (ROA) profit margins and earnings per share,” says AMR. “As this year’s Top 25 shows, it is the companies whose approaches to the supply chain are more about adding value than cutting costs that come out ahead.”
Apple scored top marks, for having transformed its reputation for poor basic supply chain performance into being a role model. The introduction of the now iconic iPhone, which was met with surging demand could have easily left Apple struggling with supply and quality issues. “Behind-the-scenes moves like tying up essential components well in advance and upgrading basic information systems have enabled Apple to handle the demands of its rabid fan base without having to fall back on their forgiveness for mistakes,” says the report.
Nokia, which comes number two this year, partly through adept management of its supply chain manages to make a 17.9% ROA on a net income of almost US$10bn, says AMR. It is a leader in collaborative supplier practices. “Nokia has a global supply chain that is the envy of even the best companies,” says AMR.
Research from the likes of AMR demonstrates not only the importance of supply chain management, but also ways in which it is evolving. Flexibility and more real time information flows are crucial for rapid decision making and quickly adapting to circumstances to avoid waste and over- or under-production.
Banks, which are rolling out SCF products, need to understand these changes, which will translate into the need for more flexible and responsive financial solutions.
4. Procter & Gamble
6. Wal-Mart Stores
7. Toyota Motor
8. Cisco Systems
9. Samsung Electronics
13. The CocaCola Company
14. Best Buy
17. Walt Disney
19. Johnson & Johnson
21. Texas Instruments
22. Lockheed Martin
23. Johnson Controls
24. Royal Ahold
25. Publix Super Markets.
The top 25 in order are: