"Visionaries, by themselves, have set a lofty bar of performance for others to emulate. Three-year average return on invested capital (ROIC) for this leadership population averaged 27 percent," Butner writes. "But what is also astounding is the three-year average revenue growth rate of nearly 25 percent. Despite the struggles and pressures most have felt during the past several years of global economic recession, this elite group of companies continues to enjoy healthy growth rates as they build smarter supply chain capabilities."
As shown in the graphic below, that financial performance was more than twice that of the Planners, and dwarfed the results of the Operators, who just barely improved either metric over the period.
Supply Chain Capabilities Highly Correlated with Financial Performance
Source: New Rules for New Decade, IBM Institute for Business Valu
Based on this data and its own view of where supply chain must go to be successful in the coming years, IBM suggests three key focus areas:
1. Know the customer as well as yourself. Smooth volatility with predictive demand: Predict demand and be in a position to react to demand variability with rapid response and allocation of all global resources.
2. See what others do not. Unveil visibility with collaborative insight: Collaborate with visibility to events, with suppliers, service providers and customers in an open, action-oriented environment.
3. Exploit global efficiencies. Enhance value with dynamic optimization: Optimize pipeline inventory, the global supply chain network and cost structures. Create cost-efficient sustainable products and practices while hedging risks with partners.
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New Rules for New Decade Report
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