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SUPPLY CHAINS TO ADMIRE | 2025
Fundamental Score This year, we released the Supply Chain Fundamental Score to help companies visualize their company’s performance on consistency of results on orbit charts when compared to their peer group. We do not use this measure to calculate the Supply Chain to Admire winners. The Fundamental Score is a compound measure that analyzes improvement and the size of the company’s pattern on two orbit charts:
1. Orbit Chart A. Intersection of Operating Margin and Inventory Turns for 2015-2024. 2. Orbit Chart B. Intersection of Annual Growth and ROCE for 2015-2024. The calculation is:
Fundamental Score = (Score of Relative Improvement on Orbit Chart A as Compared to Peer Group) + (Score of Relative Improvement on Orbit Chart B as Compared to Peer Group) +(Score of Size of Pattern of Company on Orbit Chart A as Compared to Peer Group) + .(Score of Size of Pattern of Company on Orbit Chart B as Compared to Peer Group). The larger the pattern on the orbit chart, the less control the company has on the Metrics That Matter. The companies are then stacked and ranked in a peer group in each of the four measurements, and given a score of 0-3. If the company is below the peer group on each of the four metrics, the score is a 0. If the company is at peer group potential, the score is a 1. If the company is above the industry average, the score is a 2. As a result, the maximum value a company can receive on the Fundamental Score is an 8. Most Supply Chains to Admire winners score a 6. All industries score an average of four on the Supply Chain Fundamental Score. However, a solid performance on the Fundamental Score does not necessarily land a company in the Supply Chains to Admire winner’s circle. For example, Anheuser-Busch and Coca-Cola score three out of eight in the beverage industry. The issue is control at the intersection of growth and ROCE. Take Boston Beer as an example. The company has historically been a strong performer in the beer industry. With the launch of vodka-based seltzers, the company lost control and could not adapt its model.
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