Supply chains directly influence the differentiation and cost of a firm’s products and services and its exposure to risk. The purpose of this paper is to use secondary financial data to explore the relationship between supply chain and firm performance by developing a unified proxy for supply chain performance.
Design/methodology/approach – Established econometric techniques were used to validate the proxy using a sample frame comprising the annual reports of 117 publicly traded UK manufacturing firms from the period 1995 to 2004. Findings – Increases in change in the proxy lead to an increase in change in the rate of return on capital employed and a change in the rate of cash-to-cash cycle length, both of which are traditional measures of improved supply chain management.
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