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The AMR Research Supply Chain Top 25 Lessons from Leaders

Kevin OMarah
Chief Strategy Officer June 9, 2009

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The AMR Research Supply Chain Top 25 Lessons from Leaders

Kevin OMarah
Chief Strategy Officer AMR Research

Agenda Overview of the ranking Top 25 and financial performance What distinguishes leaders

1. Apple 2. Dell 3. Procter & Gamble 4. IBM 5. Cisco Systems 6. Nokia 7. Wal-Mart Stores 8. Samsung Electronics 9. PepsiCo 10. Toyota Motor 11. Schlumberger 12. Johnson & Johnson 13. The Coca-Cola Company

14. Nike 2009 15. Tesco 16. Walt Disney 17. Hewlett-Packard 18. Texas Instruments 19. Lockheed Martin 20. Colgate Palmolive 21. Best Buy 22. Unilever 23. Publix Super Markets 24. SonyEricsson 25. Intel

The Supply Chain Top 25 Identifying the Leaders


The Universe: Fortune Global 500 manufacturers and retailers Historic value chain performance: 60% of the total score
Inventory Turns (quarterly average) Return on Assets (three year weighted average) Revenue Growth (three year weighted average)

Future potential: 40% of the total score


Peer Opinion (20%), AMR Research Opinion (20%) Companies demonstrating leadership toward DDSN Ideal 177 Peer Panelist voting companies; 20 AMR Research voters

Operations and innovation drive value


Leader

Higher cash flow, profits, p/e


Product
Demand

Winners
Supply

Operational Excellence
(Perfect Order, Total Supply Chain Cost)

P
Laggard

Losers

D
Laggard

S
Innovation Excellence
(Time to Value, Return on R&D)
Leader

2007 Supply Chain Top 25: Stock performance

Top 25 DJIA S&P 500

5/31/07 12/31/07 6.00% -2.70% -4.04%

2007 Full Year 17.89% 6.43% 3.53%

2008 Supply Chain Top 25: Stock performance

Top 25 DJIA S&P 500

5/29/08 12/31/08 -28.85% -30.60% -35.40%

2008 Full Year -29.11% -33.84% -38.49%

Plan, source, and deliver are typically included


Top 25 versus all other companies

-1

+4

+1

Top 25 n=9, All n=198

but leaders extend supply chain to value chain


Top 25 versus all other companies

+13

+8

+15

+36

Top 25 n=9, All n=198

What distinguishes leaders: themes


Outside-in focus Embedded innovation Extended supply chains Balanced excellence Attitude Metrics Supply chain talent Supply chains that are Predictable and reliable Flexible

Outcome

and have: Profitable demand response Sustainable growth Satisfied customers

Content is key

Register to vote in the 2010 Supply Chain Top 25

Questions and Answers

Kevin OMarah
Chief Strategy Officer AMR Research Email: komarah@amrresearch.com

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