CSCMP's Supply Chain Quarterly
October 17, 2018
Forward Thinking

Study: Superior supply chains = superior growth

Recent research by Deloitte Consulting quantifies the financial benefits of superior supply chain capabilities.

Supply chain leaders show significantly higher levels of performance on revenue growth and financial measures of earnings before interest and taxes (EBIT) compared to the industry average, according to the results of a new survey conducted by Deloitte Consulting LLP. The study found that 79 percent of organizations with superior supply chain capabilities had revenue growth that was above the industry average. The study also discovered that 69 percent of supply chain leaders have an EBIT margin that is well above the industry average, compared to only 9 percent of supply chain "followers."

Four hundred and twenty-one executives in more than 10 countries participated in the research. Organizations were designated supply chain "leaders" if they were rated by their executives as significantly above average compared to their industry on two metrics: inventory turnover and the percentage of deliveries on-time and in full.

The study also found that 48 percent of supply chain leaders were using 3-D printing extensively, compared to 13 percent of supply chain followers. Supply chain leaders also tend to take advantage of the latest in software applications. Seventy-five percent of leaders made use of optimization software, as opposed to 34 percent of followers. In addition, 75 percent of leaders had deployed visualization software and mobile technologies, and 65 percent used radio frequency tags.

"The ability to effectively innovate has emerged as a key attribute of successful supply chains," said Kelly Marchese, principal of Deloitte Consulting LLP, in announcing the study's results. "It's crucial for leaders to keep a close eye on emerging technologies and have a bold strategy for weaving those into their operations."

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