AMR Research Supply Chain Top 25 Public Financial Data Only Tells Part of the Story; Supply Chain Expert Opinion Missing in Company Valuations BOSTON – November 15, 2004 – Today, AMR Research released a report that names the top 25 companies embracing supply chain best practices and technologies. Billions in operating margin and trillions in market capitalization separate supply chain winners from losers. AMR Research’s supply chain top 25 identifies who is winning and how. The list was compiled using financial metrics such as return on assets, inventory turns and trailing 12 months growth. These metrics, combined with AMR Research opinion of each company’s supply chain performance (which is based on field research and case studies), led to the composite ranking score. “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,” says Kevin O’Marah, Vice President of Research and lead analyst for the report. “The final ranking reflects both what is known about these supply chain leaders and what is expected for future growth.” According to the report (The AMR Research Supply Chain Top 25 and the New Trillion-Dollar Opportunity), the maturation of the Internet as a business tool has given companies the ability to integrate software applications and databases with business processes. For many companies, properly executing on this strategy translates directly into substantial, previously unidentified shareholder value. 
International Business Machines (IBM) is one company harnessing the benefits of supply chain best practices. In 2002, it began to tie all the pieces of a supply chain together. This required managing over 30,000 suppliers, offering 78,000 products and operating 13 manufacturing plants in 9 different countries. IBM transformed its supply chain from a cost of doing business into a competitive advantage. The results of their transformation have made a significant impact on IBM’s business. Over the last two years, IBM has reduced cost and expense by more than $12B. Inventory levels are at a 30-year low while the amount of sales is increasing. IBM has increased intra-division part reuse from 2% to over 50% and annual part number reductions range from 20% to 38%. "In the on-demand era, the real opportunity is about how you design a business and all its supplier relationships in ways that really haven't been possible until now,” said Bob Moffat, senior vice president, Integrated Supply Chain. “Advantage will flow to companies that embrace this new model and demonstrate the ability to simultaneously excel at the fundamentals of supply chain and leverage next-generation management practices." About AMR Research: AMR Research provides world class research and actionable advice for executives tasked with delivering enhanced business process performance and cost savings with the aid of technology. Five thousand leaders in the Global 1000 put their trust in AMR Research’s integrity, depth of industry expertise, and passion for customer service to support their most critical business initiatives, including supply chain transformation, new product introduction, customer profitability, compliance and governance, and IT benefit realization. More information is available at www.amrresearch.com.
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