AMR Research’s Supply Chain Top 25 includes a Peer Opinion component in its ranking methodology.  This component comprises 20% of the total point score upon which the final rank is based. The other components are an AMR Research Opinion score (20%) and financial metrics (e.g., return on assets, inventory turns, and growth), which collectively account for 60% of the score.

Q. Who is eligible for the Peer Opinion Panel?

A. Any supply chain professional working for a manufacturer or retailer. This excludes consultants, technology vendors, and people working in non-supply chain roles, including PR, marketing, and finance. AMR Research reserves the right to accept or reject any volunteer. AMR Research also monitors total representation, with an eye to reasonably balance the Panel across companies, industries, and functions. Only one panelist per company is accepted.

Q. What does the Panel do?

A. The polling procedure is designed explicitly to take no more than 60 minutes, and is administered as a web form on the AMR Research website. As with any online web form, explicit instructions are readily visible. There are no other absolute responsibilities for the Panel.

Q. When does the polling take place?

A. Polling is held in early April. Eligible panelists are notified of their acceptance during the week prior.

Q. Are there any preparatory materials available?

A. Yes. AMR Research has a number of published articles and Reports that provide background on definitions, terminology, and reference models that panelists may find useful. These are clearly identified on this page. This site is actively maintained as a venue for Panelists and others to comment on and debate intent, methodology, and other topics relating to supply chain leadership.

Q. How does the polling web form work?

A. Panelists are given a limited universe of public companies (the Fortune Global 500 manufacturers and retailers) and asked to select those they regard as “leaders,” meaning companies coming closest to an ideal that AMR Research has defined as Demand-Driven Supply Network. After this subset of leaders is chose, the form refreshes, bringing just those chosen companies (must be more than 25 in the first pass) to a list. Panelists are then asked to force-rank from 1 through 25 the companies, with 1 being the company most closely fitting the Demand-Driven Supply Network ideal, 2 being next closest, and so on. Individual votes are tallied across the entire Panel, with 25 points earned for a No. 1 ranking, 24 points for a No. 2 ranking, and so on. This procedure is identical to the polling procedure that is used for the AMR Research Opinion component.

Q. How many Peer Panelists are there?

A. For the 2008 voting process, the peer panel included 122 supply chain executives from a wide range of industries.

Cash-to-Cash and Asset-Intensive Industries

In our recent article on the cash-to-cash cycles of the Supply Chain Top 25 (see The AMR Research Top 25: A Cash-to-Cash Lens), we plotted the companies on a graphic that compared their levels of inventory and how well balanced they are between their accounts payables and accounts receivables cycles, all of which are components of cash-to-cash. We talked about the need for balance in this metric and concluded that the healthiest cash-to-cash performance is the one with a combination of right-sized inventories and a reasonable level of accounts payable that is well balanced with accounts receivable.

In response to the piece, one reader wrote:

Comment: Very good article. As always, the devil is in the detail. It is interesting to see how some of the process manufacturing-oriented segments fare on this chart especially when they try to balance asset utilization (under capital-intense structure) and WIP management. Curious to know your comments.

Response: We definitely agree that the devil is in the detail! The asset-intensive process segments do tend to hold more inventory which places them in the upper half of the chart. But a quick look at a few of them shows they are just as dispersed in terms of their accounts receivable (AR) versus accounts payable (AP) balance. (see Figure 1) For example, Dow Chemical is relatively balanced, while DuPont and BASF have longer receivables and Alcoa has longer payables. Rio Tinto, on the other hand, is pretty balanced in its AR versus AP but holds a whopping 95 days of inventory, which is fairly typical in its industry. The upshot is that, with the exception of retail, the balance part of the equation—how well balanced a company is in the time it takes to pay suppliers and the time customers take to pay it—seems to be more company-specific than industry- or sector-specific.

As always, we welcome your questions and comments. Please e-mail dhofman@amrresearch.com or visit our blog at chainreactionblog.com.

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The AMR Research Top 25 is about leadership. We research trends and technology in the global supply chain for our clients because they feel a responsibility to lead. These clients are busy building a world that is more bountiful, profitable, and sustainable than the hard, industrial economy of Dickens and Steinbeck. We publish the Top 25 each year to recognize the companies that take this leadership the farthest.
The Top 25 aims to send a message to those outside our profession about what the global supply chain means to business and society. Our hope is that the debate surrounding this topic can mobilize board-level executives and investors to look to supply chain for strategic impact. We welcome you to join the discussion as a voter or contributor to our published material.