Does Supply Chain Excellence Really Pay Off?
You don’t even have to go beyond the first page of this recent article in the Supply Chain Management Review (subscription required) to find the answer. According to a recent study by Morgan L. Swink, Rajdeep Golecha and Tim Richardson at Michigan State University, which analyzed the financials of top supply chain management companies and their nearest competitors from 2004 to 2007, supply chain leaders clearly outperformed their closest competitors across the following 10 metrics:
- 50% higher net margins
- 20% lower operating and SG&A expenses
- 12% lower average inventories
- 30% less working capital expenses
- 2X the ROA
- 2X the ROE
- 44% higher economic value add
- 2X the return on stock price
- 2.4X the risk-weighted stock return
- 46% greater market value-to-assets ratio
Excellence pays. What else do you need to know?