Many companies today are struggling with their supply chains. Supply chain globalization and product/channel diversification mean that supply chains are now more complex than ever. Corporations face unpredictable fuel and commodity costs, as well as rising inventory levels and increased service pressure. Yet a select cadre of companies has succeeded in turning their supply chains into a strategic advantage.

McKinsey research finds that companies with high-performing supply chains differentiate themselves from ordinary performers through the superior application of six management practices, As a result, these companies enjoy lower distribution and logistics costs, better service outcomes, and better inventory performance. Against a backdrop of economic uncertainty and rising supply chain risk, our research has implications for high-tech, manufacturing and assembly, packaged-goods, pharmaceutical, and retailing companies.