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
*** 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%]