What Is the Supply Chain Index?

By January 21, 2016Uncategorized

The Supply Chain Index™ is designed to be used as a ranking system and benchmarking tool. It enables companies to better understand the relationship between supply chain and financial (market capitalization) performance and to define what metrics correlate strongly with market capitalization growth. In addition, the Index enables us to identify if there are metrics that matter to a supply chain but not to a market capitalization perspective. What industries or companies have the strongest relationship between supply chain and market capitalization and what can we learn from them? Can supply chain performance in one year help to predict market capitalization trends in the future? These questions and many, many more are useful in increasing our understanding of supply chain excellence and at a practical level, serving as benchmarks for understanding what success looks like in your supply chain.

The Supply Chain Index is our effort to rank the best supply chains in the world. Unlike other ranking systems, this ranking system is based solely on quantitative data and corporate financial performance removing subjectivity from the decision process. We compare performance on financial supply chain metrics with stock market performance (market capitalization) to identify top performers. In addition, because supply chains come in all shapes and sizes, our Index is built upon peer groups operating in the same industries with similar challenges and opportunities present within the business environment. We simply do not believe that McDonalds, Apple and Walmart provide an appropriate comparison as best practices in one industry rarely translate apples to apples across industry lines. Finally, the Index is based upon financial performance of companies from 2006 forward. Building a great supply chain is not something that can be done with a short-term project approach and excellence comes in small steps over a sustained long-term period.

View our Launch of the Supply Chain Index on-demand webinar

View the Launch of the Supply Chain Index PowerPoint slide deck on SlideShare

Read our Supply Chains to Admire report.

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