From sdcexec.com: “Supply chain integrity is a risk management issue that affects not only business operations but also long-term shareholder value, according to a new report from consultancy PricewaterhouseCoopers. In the study, “From Vulnerable to Valuable: How Integrity Can Transform a Supply Chain,” PwC reports that the average stock return of companies suffering from supply chain disruptions was almost 19 percentage points lower over a two-year period relative to the benchmark group.”
“When compared to benchmark groups, three material consequences were consistently found in the study of 600 companies that experienced supply chain disruptions between 1998 and 2007: average shareholder value plummeted; stock prices experienced greater volatility; and return on sales and return on assets declined.
“The traditional emphasis in supply chain management has been to squeeze out costs,” said Dave Pittman, U.S. advisory operations leader at PricewaterhouseCoopers. “But the very practices that drive costs out also open the door to increased risks. No longer can supply chain management be viewed solely as an operational issue, since disruptions directly affect financial performance and decrease shareholder value.” Supply Chain Risks Threaten Shareholder Value