These companies also use a broader definition of the supply chain—one that includes planning, information sharing, and value-adding activities, from raw material to final distribution, rather than just logistics.

Leading companies have made strategic investments in their supply-chain capabilities and set up efficient and effective organizations that overcome cross-functional silos. By outperforming the overall level of maturity in their sectors, they have been able to disrupt them, as Amazon has done in retail, for example. These companies have redefined their customers’ expectations of service and their ability to bring innovation to the market, turning their excellence in supply-chain execution into a powerful source of competitive advantage.

Critically, the very best companies continue to evolve and reinvent their supply chains, even if they have already achieved a leading position in their industry. By doing so, they are able to manage risks; respond to changes in the economic, technological, and competitive environment; and exploit new opportunities more effectively than their competitors.

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