ning to understand the potential to create value in a companys supply chain. Supply chain management is growing more popu- lar in executive suites, leading to questions about how it creates protable growth. The importance of supply chains and their effectiveness, or lack thereof, never has been more apparent than it is today. Supply chains drive value, which ultimately reaches shareholders and investors. Todays CEOs and boards no longer can ignore the end-to-end business impacts of the supply chain. New understandings have surfaced about supply chains. The supply chain megaprocesses plan, buy, make, move, store, sell, return comprise the operations of the business. And the four flows mate- rials/products, information, cash and work flow determine the effectiveness and effi- ciency of the operations. Traditionally, each megaprocess was treated as a functional silo. Little infor- mation crossed boundaries. Now, supply chains likely have many interrelated trad- ing partners spanning geographies, time zones and cultures. Using what we call the supply chain value framework which encompasses the goals, objectives, actions and value drivers for creating value is an excellent way to engage these areas and partners to create shareholder value. As companies examine opportunities for profitable growth, margin improve- ment and capital efficiency, this framework keeps process leaders focused on results. Ensuring that key value drivers are identi- fied and prioritized is vital. Benchmarking and adapting best practices are essential to ensure the right actions are taken. Compa- nies can leverage their megaprocesses to increase or create value by analyzing the following 10 areas: Procurement: Accept procurement as a much broader responsibility, beginning with strategic sourcing, to include all mega- processes and encompass responsibility of supplier relationship management. Outsourcing: Focus on core compe- tencies and outsource all other tasks. Inventory: Increase inventory turns and fill rates simultaneously. Put advanced sales and operations planning processes in place to unleash working capital and drive customer service. Transportation: Establish efforts to develop core carrier programs, implement transportation management systems, decouple inbound freight and enhance shipment planning and execution oppor- tunities. Network: Changes such as globaliza- tion, mergers and acquisitions, and the evolution of your marketplace all demand an annual review of your network. Evalu- ate the number of and justification for your locations, along with the operation strate- gies, to establish the lowest cost/highest customer service network. Service supply chain: View this as a profit center. Assess reverse logistics and end-of-life product opportunities with an eye toward enhancing profitable growth. Speed, agility and productivity: Successful organizations will boost speed, agility and productivity across the mega- processes. Tax-effective supply chain: Supply chain managers need to understand the effective tax rate, and tax managers need to understand the supply chain. Cash-to-cash cycle (C2C) manage- ment: The C2C cycle is the length of time a companys cash is tied up in working capital before it is returned in the form of collections of receivables. Consider the C2C cycle in all supply chain improve- ments. Technology: Move forward with tech- nology upgrades that provide a strong business case. For more details about achieving profit- able growth through supply chain strategy, download the white paper Leveraging the Supply Chain for Increased Shareholder Value from www.tompkinsinc.com/ publications. d James A. Tompkins is president and CEO of Tompkins Associates and Tompkins International. He has written or contributed to more than 30 books, hosts the Global Supply Chain Podcast series and writes the GoGoGo! blog. Contact him at jtompkins@tompkinsinc.com. Creating value New understandings have surfaced. supply chain BY JAMES A. TOMPKINS Copyright of Industrial Engineer: IE is the property of Institute of Industrial Engineers and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.