Evidence continues to mount that a well-run supply chain can improve the value of a company's stock. According to analysts at AMR Research of Boston, Massachusetts, U.S.A., the companies on its 2007 list of the 25 best-performing supply chains outperformed the stock market for the third consecutive year.
The research firm compiles an annual list of 25 manufacturers and retailers whose supply chain performance it deems superior. AMR bestows this distinction on companies that exhibit excellence in such metrics as return on assets, revenue growth, and inventory turns. Nokia headed the list in 2007, followed by Apple, Procter & Gamble, IBM, and Toyota. (See "Who runs the world's best supply chains?" in the Q3/2007 issue of this magazine.)
The average total return of AMR's "Supply Chain Top 25" in 2007 was 17.89 percent, compared with returns of 6.43 percent for the Dow Jones Industrial Average and 3.53 percent for companies in the Standard & Poor's 500 index. Nokia's stock, for example, was valued at US $19.87 a share at the end of 2006 and had climbed to US $38.39 by the market close on December 31, 2007.
"Clearly, this is a group of companies that excels, strongly weathering the ups and downs we saw in the market last year," said Kevin O'Marah, chief strategy officer at AMR Research, in announcing the findings. "We're excited to once again have proof that supply chain excellence and leadership do make a difference."
AMR will debut its Top 25 list for 2008 in May.