18
18
SUPPLY CHAINS TO ADMIRE | 2025
Improving The Value of the Firm Through Supply Chain When I wrote the book Bricks Matter, one of the reviewers asked, " How do you define value? " I struggled to answer. The focus of the traditional supply chain organization is cost management. Saving money does not drive value, and improving cost does not necessarily improve margin. So, as part of this analysis, our goal was to answer the questions, " What drives value? " and " What steps should companies take to improve Price to Book Value? " The definition is: Price to Book Value = Book VMaalurkee/tShSharaereOPurtiscteanding Our research finds that companies with strong organizational alignment between supply chain and R&D, operate an effective S&OP process, and drive supplier development programs to improve supplier reliability are more likely to enhance value. These processes have become even more critical to managing the supply chain during the pandemic. Winning companies have longer tenures of their leadership teams and focus on driving long-term outcomes. They avoid supply chain fads and multiple consulting-based projects and constantly emphasize supply chain excellence.
Made with FlippingBook - PDF hosting