Management Accounting

The Top 25 Supply Chains

Corporations that have adopted demand-driven supply chains are outperforming their competitors by a wide margin, according to AMR Research.
John GoffJanuary 11, 2005

Accounting rules treat inventory as assets. But as revealed by the top 25 supply chains compiled by Boston-based consultancy AMR Research, most demand-driven companies maximize sales while minimizing safety stock. The secret of their success? Replacing inventory with information from customers and suppliers.

Vendor AMR
Opinion
(40%)*
ROA
(20%)**
Sales/Inv.
(20%)***
Trailing
12-mo. Growth
Composite
Score****
1. Dell 238 13.7% 126.7 17.1% 20.75
2. Nokia 145 15.0% 25.2 17.5% 13.31
3. Procter & Gamble 188 10.7% 11.9 7.8% 11.70
4. IBM 137 13.5% 29.3 9.8% 11.31
5. Wal-Mart Stores 175 8.5% 9.8 10.9% 11.27
6. Toyota Motor 151 5.7% 14.4 16.6% 11.08
7. Johnson & Johnson 110 15.0% 11.7 15.3% 10.93
8. Johnson Controls 151 5.2% 27.4 12.6% 10.70
9. Tesco 42 5.9% 25.7 27.7% 9.43
10. PepsiCo 101 14.1% 19.1 7.4% 9.10
11. Nissan Motor 51 10.8% 11.8 22.1% 9.09
12. Woolworths 14 11.1% 14.3 27.3% 8.80
13. Hewlett-Packard 33 3.4% 12.1 29.1% 8.30
14. 3M 66 13.7% 10.0 11.6% 8.09
15. GlaxoSmithKline 35 18.8% 10.2 11.9% 7.95
16. Posco 23 9.6% 8.6 23.3% 7.85
17. Coca-Cola 58 15.9% 16.8 7.6% 7.69
18. Best Buy 52 8.1% 9.4 17.2% 7.53
19. Intel 52 12.0% 12.0 12.6% 7.47
20. Anheuser-Busch 70 14.1% 24.1 4.3% 7.45
21. The Home Depot 62 12.5% 7.1 10.1% 7.29
22. Lowe’s 37 9.9% 6.7 16.4% 7.00
23. L’oreal 24 9.9% 12.8 17.6% 6.98
24. Canon 13 8.7% 7.2 22.0% 6.94
25. Marks & Spencer 18 7.5% 20.9 19.2% 6.89

* AMR opinion: based on panel of experts’ forced-rank order against definition of “demand-driven supply network orchestrator”

** ROA: 2003 net profit/2003 total assets

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*** Sales/Inventory: 2003 sales/2003 year-end inventory

**** Composite score = [(AMR opinion / 10) x 40%] + [(ROA x100) x 20%)] + [((sales / inventory) / 5) x 20%] + [(trailing-12-month growth x 100) x 20%]