If Your Supply Chain Is In Synch, Get Psyched

Investors tend to reward companies that run synchronized supply chains. Don’t take it from me; that came from the chairman and CEO of UPS. Granted, supply chain services are UPS’s stock in trade, but in a column in the current issue of Chief Executive magazine, UPS’s Mike Eskew backs up that statement with numbers, citing an Accenture study that found that, from 1995 to 2000, the companies with the best-run supply chains had stock market capitalization rates that were 7 to 26 percent above industry averages.

Eskew talks about supply chains “setting business free,” but his description of their role is more likely to set supply chains free. We ought not call it supply chain management anymore, he suggests, but rather synchronized commerce. Ahh, the relief. Now it is strategic—the province of CEOs! In fact, Eskew concedes: “Can you blame CEOs for thinking that supply chains are the province of the logistics department? After all, supply chains are tactical. They’re sweaty. They require mind-numbing attention to detail.” (Of note, a CIO column by Network Services’ CIO last year notes that supply chain management was already a semantic improvement over sellin’, warehousin’ and truck drivin’.) UPS’s Eskew lays out the benefits of synchronized commerce and makes it clear why the CEO should care.

And he says more and more of them do care. That may include yours. If it doesn’t, and you’ve been struggling to get support for supply chain investments, you might want to push the Sept. issue of Chief Executive across your boss’s desk.