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Supply chain successes - Dell tops the list
Getting it right can save businesses a bundle...

By Sylvia Carr

Published: Tuesday 16 November 2004

When it comes to getting the supply chain right, Dell is apparently tops.

The Round Rock, Texas-based company surpasses all others when it comes to taking advantage of supply chain best practices and technologies, according to AMR Research.

Four other IT firms came in among the research firm's top 25: Nokia (2), IBM (4), Hewlett-Packard (13) and Intel (19).

The top five was rounded out by consumer goods manufacturing giant Proctor & Gamble (3) and retailer Wal-Mart (5).

The results were based on each company's financial metrics such as return on assets and inventory turns as well as AMR's own field research and case studies.

The rankings are for more than just show. Manufacturers can reap big rewards - hundreds of billions of dollars industry-wide - from streamlining supply chains and integrating them with the internet, says AMR.

IBM was singled out for reducing cost and expenses by more than $12bn and bringing down inventory levels to a 30-year low in the two years since it started integrating the pieces of its supply chain.

Overall, companies with supply chains that can react quickly to customer and supplier demand see five per cent higher profit margins and 10 per cent more perfect orders than those that do not, according to AMR Research.

Earnings a place on the list is a good omen for a company's future, too. Kevin O'Marah, vice-president at AMR Research and lead analyst for the report, said in a statement: "We now know that such metrics as perfect order performance and supply chain management costs say more about next year's profits than last quarters' earnings. The final ranking reflects both what is known about these supply chain leaders and what is expected for future growth."