By Lisa Doctrow – Lexmark is among a select group of companies recognized as “Supply Chains to Admire” by independent research firm Supply Chain Insights. The annual report recognizes companies that have excelled in driving performance and improving to a greater degree than the peers in their industry.

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Supply Chain Insights analyzed financial data for the period of 2006–2014 to determine the performance of 320 companies in 22 industries. Fewer than 10 percent of the companies rose to the top, with Lexmark among 26 winners named.

“Supply chain excellence makes a difference to corporate value,” states Supply Chain Insights in its “Supply Chains to Admire 2015” report. “Resilient, predictable, and forward-looking supply chain processes drive sustained balance sheet improvement.”

The report describes the key characteristics among the Supply Chains to Admire such as excellence in planning, network design and inventory management; strength in horizontal processes; and clear global governance.

Winners were grouped into three categories: retail, process manufacturing and discrete assembly. Specific to the discrete category that includes Lexmark, the characteristics of strong performance include areas such as strength in material sourcing and managing costs, and greater integration of supply chain processes into new product launches.

Why Lexmark stands out

Unlike most companies, Lexmark has an “end to end” view of supply chain, with all elements tied together in one global organization. This includes everything from initial planning, sourcing and procurement to manufacturing supplies and hardware, global logistics, distribution and customer fulfillment.

“By operating under one umbrella, we are able to optimize the entire flow of products to our customers — from cost efficiency to on-time-to-promise delivery,” said Jim Brucken, director of worldwide operations.

For example, one of our key metrics is cash cycle, which measures the amount of days cash is tied up within the operations of the business.

“We have seen this go from 30 days to 15 days to almost negative in recent years thanks to improvements in our operations,” Brucken said. “This is best in class in the industry.”

Another key metric is “on time to promise” delivery.

“We provide promise delivery dates on all of our customer orders and measure how well we hit those dates,” Brucken said. “We consistently see 95 percent on time to promise, and in the third quarter of this year we measured 97 percent — another best-in-class benchmark.”

Throughout Lexmark’s supply chain, continuous improvement is top of mind. The entire organization is focused on using Leantechniques such as pull replenishment, for which Lexmark was recognized with a Manufacturing Leadership 100 award in 2013.

“Right now we have hundreds of continuous improvement projects going on throughout supply chain, isolated down to very small processes every step of the way to make us even better,” said Michelle Rawlings, director of global sourcing and planning.
“Being recognized among the ‘Supply Chains to Admire’ is a result of the talent and dedication of our teams across the globe, having the passion to excel and continually improve,” said Tonya Jackson, vice president, Global Supply Chain Operations. “We are proud of our teams and the great work they deliver every day.”