The traditional view of supply chain management was that it helped reduce a company's costs but had little to do with the revenue side of the business. More recently, with the rise of companies such as Dell Computer and Wal-Mart, it was suspected that it may also have an impact on a company's market share, profits and market capitalisation. However, this was mere conjecture. A recent study by Accenture conducted in collaboration with top business schools Standford in the United States and INSEAD in France has ended all speculation. Based on data from more than 600 Global 300 companies, 'A global study of supply chain leadership and its impact on business performance' found conclusive evidence of a correlation between companies' financial success and the depth and sophistication of their supply chains. 'The study showed that companies in Asia and around the world which transform their supply chain operations can expect to be substantially rewarded through their financial performance,' says Robert Easton, managing partner supply chain Asia Pacific, Accenture. 'It is the first study to establish a proven connection between performance and shareholder value growth. Supply chain leaders [companies with frequent inventory turns, low cost of goods sold as a per cent of revenue, and high return on assets] were shown to have a market capitalisation compound annual growth rate between 7 and 26 percentage points higher than their industry averages. 'By contrast, those at the other end of the spectrum trailed the industry growth rate by up to 5 percentage points.' Supply chain management is not the only factor affecting a company's long-term success, says Mr Easton, but it is nevertheless significant if competitors are taking market share consistently by using cheaper, more consumer-friendly supply chains. 'Just look at Wal-Mart and Dell. They have remained leaders because they continue to have innovative operating models. Their competitors - Kmart and Gateway, for example - tried but failed to innovate in supply chain, and are bankrupt or near it,' Mr Easton says. The research concluded that several factors differentiate the leaders from the laggards. First, the chief executives and senior executives of these companies see their supply chains as decisive factors in generating competitive differentiation and shareholder value. Second, leaders incorporate their supply chains into their business strategies and operating models. 'They focus their strategies on low cost, rapid time to market and great service and devote much more attention than their competitors to designing and implementing models that connect functions within their organisations,' says Mr Easton. Mastery of supply chain management can also elevate a company to market-leading status. 'It is entirely true that supply chain excellence has the potential to transform companies into market leaders. There are scores of examples where companies have attained market leadership through supply chain innovation.'