Abstract
The purpose of this paper is to explore which financial performance indicators (FPIs) evaluate the level of supply chain capability (SCC) that explicitly touches all of the business functions and processes within and beyond the company. The authors investigated nine FPIs that were selected from the financial statements of 155 companies within nine industries from 2011 to 2017 using Morningstar financial database and Gartner’s report. The authors find that suitable FPIs to measure SCC for shareholders’ value are return-on-assets (ROA), days-sales-outstanding (DSO), and current ratio (CR). This means that higher ROA, shortened DSO, and an appropriate level of CR could reach a sustainable supply chain. These results will help the industry to avert a major disruption in supply chain processes and activities using suitable financial performance indicators.
Highlights
Researchers in various fields have published numerous articles with diverse research designs that examine the financial impacts on supply chain capability (SCC)
Despite the increased attention paid to financial performance and Supply chain management (SCM), relatively few studies utilize a wide range of financial indicators to cover company-wide financial performance ratios to evaluate supply chain capability
To address this research gap, difficult to acquire related data for the entirejoint supply chain andefforts. Toimprove addressshareholder this researchvalue gap, we provide a general framework to evaluate supply chain we provide a general framework to evaluate joint supply chain efforts to improve shareholder value using common SCC related financial performance indicators (FPIs) beyond C2C and categories of using common relatedcompany-wide financial performance indicators (FPIs) beyond C2Cdifferentiator and categories of financial ratios to analyze health and try to find a competitive that financial ratios to analyze company-wide health and try to find a competitive differentiator that influences shareholder value
Summary
Researchers in various fields have published numerous articles with diverse research designs that examine the financial impacts on supply chain capability (SCC). Chain management has a direct impact on financial indicators and the marketing performance of an organization [6], such as increased market share and return on investments [7,8], lower total costs [9], improved customer relations [10], and increased operational efficiency, which includes higher-order fulfillment rates and shorter-order cycle times [9] It influences competitive advantage [6,11], and the supply chain strategy has a central position in creating shareholder value (SHV) [12] to assure sustainable supply chain [13]. Many studies attempt to analyze working capital efficiency using cash-to-cash
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