A Wake-up Call for CEOs: Get "Back to Basics"

For example, Pfizer recently has significantly improved its forecasting accuracy by developing new tools to evaluate the results of promotion events on consumption, and then using this information to improve shipping effectiveness. As a result, Pfizer's consumer health care division is an industry leader in forecast accuracy.

Companies making the biggest financial commitment to improving their supply chain management were most likely to feel they received the best return on their investment. Twenty-one percent of companies spending $25 million or more on supply chain improvements reported that the results exceeded expectations, compared to only 5 percent for companies who reported spending $1 million or less.

Booz Allen initiated this study of supply chain practices at companies around the globe to mark the 20th anniversary of the company's coining the term "supply chain management." In 1982, Keith Oliver, a vice president in Booz Allen's London office, developed a process to identify the trade-offs necessary to achieve his clients' desired inventory management and customer service goals. Oliver, now senior vice president in charge of global operations, called his innovation "supply chain management." The concept stuck; so did the name.