Supply Chains to Admire study announces 22 winners
Seventh annual study finds that winners tend to have long tenure of leadership teams, focus on long-term outcomes, avoidance of supply chain fads.
Consulting firm Supply Chain Insights LLC has released the list of winners for its 2020 Supply Chains to Admire study, saying the results provide a data-driven analysis based on corporate financials.
Now in its seventh year, the study’s methodology identifies companies within industry peer groups that drove higher levels of improvement, better performance, and a superior level of value in public markets during the 2010-2019 time period, according to Supply Chain Insights’ founder and CEO, Lora Cecere.
Following that approach, investigators graded over 700 public companies within 27 industry sectors and tracked their year-over-year progress on four metrics: growth, operating margin, inventory turns, and return on invested capital. Study practitioners noted that they would have preferred to include two additional variables— customer service and corporate sustainability—but found there was no industry standard to enable an accurate comparison between companies.
The results produced 22 winning companies: AbbVie Inc., Assa Abloy AB, BorgWarner Inc., Broadcom, Dollar Tree Stores, Ecolab Inc., iRobot Corporation, Lockheed Martin Corp., Koninklijke Ahold N.V. (Ahold), L'Oréal S.A, Monster Beverage Co., PACCAR Inc., Reckitt Benckiser Group plc, ResMed, Rockwell Automation, Samsung, Sleep Number, Taiwan Semiconductor Manufacturing (TSMC) Co., The Toro Company, TJX Companies, United Tractors, and VF Corp.
“Winning companies have longer tenure of their leadership teams, with a keen focus on long-term outcomes. There is an avoidance of supply chain fads, and multiple consulting-based projects, with a constant emphasis on supply chain excellence,” Cecere said in an analysis of the results.
“Complexity throws the supply chain out of balance. Leaders in supply chain management have robust horizontal processes: a focus on revenue management, Sales and Operations Planning (S&OP), new product launch/ innovation (NPI), Corporate Social Responsibility, and Supplier Development. In the best organizations, these cross-functional programs align with strategy and there is a conscious choice to manage complexity,” she said.
The results also mentioned three companies that did not qualify as sector winners, but nevertheless showed marked improvement and notable achievement: Becton, Dickinson and Co. (B.D.), Schneider Electric, and Urban Outfitters.
In addition, Supply Chain Insights noted the “conspicuous absence” of giant e-commerce providers Amazon and Alibaba from the list. While those companies should be recognized as supply chain leaders, they lack a good peer group for comparison, and were thus eliminated from inclusion in the analysis.
Another highlight of the results was the short list of companies that have driven year-over-year results: L’Oréal won six times out of seven years of analysis while Apple, Dollar Tree, and TSMC won for five out of seven years.
According to Supply Chain Insights, companies throughout the industry can use the Supply Chains to Admire study in pursuit of five goals:
- to guide supply chain leaders in setting realistic supply chain goals,
- to provide industry benchmarks by industry peer groups,
- to reward companies that are achieving higher levels of supply chain excellence,
- to give a clear definition of supply chain excellence by enabling an explicit objective function to better understand the impact of choices made by companies on balance sheet performance, and
- to gain an understanding of what is possible in multi-year roadmaps.