Apple tops supply chain survey

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Apple is top when it comes to supply chain, according to the latest annual survey by AMR Research.

Its Supply Chain Top 25 for 2009 shows strong performances from a number of companies in the IT sector including Dell, IBM, Cisco Systems, Samsung Electronics, Hewlett Packard, Texas Instruments, Sony Ericsson and Intel. Consumer goods suppliers and retailers are also well represented.

The AMR Research Supply Chain Top 25 for 2009

1 Apple
2. Dell
3. Procter & Gamble
4. IBM
5. Cisco Systems
6. Nokia
7. Wal-Mart
8. Samsung Electronics
9. Pepsico
10. Toyota Motor
11. Schlumberger
12. Johnson & Johnson
13. The Coca Cola Company
14. Nike
15. Tesco
16. Walt Disney
17. Hewlett Packard
18. Texas Instruments
19. Lockhead Martin
20. Colgate Palmolive
21. Best Buy
22. Unilever
23. Publix Supermarkets
24. Sony Ericsson
25. Intel

AMR’s rankings are based on a number of factors that go to make up a composite score. The two largest factors, each accounting for 25 per cent of the total score, are inventory turns and a weighted calculation of return on assets over a three year period. Ten per cent of the score is provided by a weighted calculation of revenue growth over a three year period.

The remainder of the score is made up of Peer and AMR opinion components (20 per cent each). The Peer panel consisted of 170 senior supply chain executives while the AMR component came from 20 panelists across industry and functional specialties.

Companies must receive votes from both panels to be included in the ranking. Therefore, a company that had a composite score fall within the Top 25 solely based on the financial metrics would not be included in the ranking.

The results show big differences between the companies in the different categories. Apple scored highly across the board: 12.6 per cent ROA, 45.5 inventory turns and 32.7 per cent revenue growth. It also came top with both the peer group and the AMR group. While Dell was impressive on inventory it was one of the lowest Top 25 companies for revenue growth (2.5 per cent).

Top for ROA was Schlumberger, oilfield services provider, at 17.3 per cent while Toyota was bottom at 5.1 per cent.

Inventory turns showed a huge range from 46.2 at Dell right down to 3.4 at Johnson & Johnson.

Apple was the clear leader for revenue growth while Texas Instruments showed a 2.6 per cent decline.

While Apple was top scorer in both opinion sections there was no agreement over who was bottom of the group. Colgate Palmolive came bottom with the AMR panel but the peer group put Publix Super Markets last.

AMR said: “Today we are experiencing a global recession of such depth that no company, however blue chip, can feel certain of its future. The collapse of credit and subsequent steep decline in demand have combined to kill off many, if not most, plans for expansion and investment throughout the global supply chain. In such an environment, it should come as little surprise that our 2009 list comprises companies of deeply established reputations and long histories.

“Investors, facing uncertain times, tend to shun risky bets and look for security in safe stocks. Sometimes called a flight to quality, this trend reflects a belief that the strong will survive. Our list this year has fewer new names than ever before (only three), each of which contributes to this sense of stability. Intel is back on the list at No. 25, along with consumer staples Unilever (No. 22) and Colgate-Palmolive (No. 20). Not only do these three also qualify as companies of established reputations and long histories, they are also clearly leaders in huge markets.

“Despite the fragile world economy, many of the companies on this year’s list remain convinced that winners will be those able to position for a return to growth. Privately, these companies will say that they expect to gain market share from their weaker competitors. Most saw the signs of trouble early and secured their cash positions well enough to maintain momentum on vital initiatives. 2010-11 will show where such foresight pays dividends, with greater supply chain agility enabling survivors to knock off competitors for good and deliver huge earnings in the climb out.”

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