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Effective supply chain management, it has been argued,cuts costs and creates real value. But is that reflected in the bottom line and in shareholder value? Indeed it is, according to the results of research conducted by Accenture, an international consulting firm, in conjunction with Stanford University and INSEAD (a graduate business school with campuses in France and Singapore).

The study showed that companies whose supply chain performance earned them a spot in the "supply chain leaders" category had a market capitalization compound average growth rate (CAGR) of up to 26 percentage points above the industry average growth rate, according to Accenture. Companies whose supply chain performance pushed them into the "decliners" category suffered a drop in their relative market capitalization growth rate of an average of 25 percentage points.


As part of the study, Accenture and the university researchers analyzed supply chain and financial performance data derived from corporate disclosures of the Global 3000 over the course of a year. In addition, researchers conducted surveys and more than 60 interviews with senior executives from several industries. The research was completed in December.

"For many businesses, the supply chain is a tremendous opportunity area, yet many companies continue to do business as usual, looking only to shave additional costs from their existing operations," said William Copacino, managing partner for Accenture's global supply chain group, in announcing the study's results. "An increasing number of successful supply chain companies are looking for new strategies [to increase] market share by getting closer to their customer, revolutionizing their cost structure or delivering innovative products and services."

A survey of 104 supply chain executives from North America and Europe showed that 89 percent viewed supply chain management as critical or very important to their businesses, according to Accenture,and a similar percentage reported that it had become more important in their industry over the past three years.

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