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UO Business: The Magazine, Summer 2017

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Page 20 of 35

L UNDQU I S T C OL L E GE OF BUS I NE S S 21 F A C U LT Y S uperb product design with outstanding marketing and merchandising is essential to the success of any sports product. But nothing happens without the product delivered to customers on time, as ordered. Recent research by Emeritus Professor Roger Best, cofounder of the UO Sports Product Management Program and Director of SPM Research; John McPhee, program lead for Supply Chain University at Nike; and Andrew Hamburg, business planner for U.S. team sports at adidas, examines the impact of supply chain management on profits. Based on that research, the authors also created a web application for others to use to evaluate and benchmark their supply chain performance relative to 23 sports product companies. The web app is available at business.uoregon.edu/spm-supply-chain-app. To understand and evaluate the impact of supply chain management on return on assets, the authors defined the concept of supply chain impact days and its influence on return on assets. Typically, once the product is sold, supply chain management has completed its job with the exception of reverse logistics. In most cases, collecting payment from customers is someone else's responsibility. However, if the company's supply chain fails to deliver on time, or delivers damaged or defective products, or incorrect assortments and/or quantities and/or has incorrect labeling and/or invoicing, then a supply chain management failure occurs. This failure would likely cause retailers to take longer to pay for purchased merchandise and increase accounts receivable and a company's investment in assets. Some of these delivery errors are not caused by supply chain management. However, supply chain management is at the company-customer interface where the problem is recognized and must be resolved. While much more goes into late payment and higher accounts receivable days, the authors assert supply chain management can play a bigger role in this process. With this concept in place, the researchers defined supply chain metrics needed to quantify a measure of supply chain impact days. To better understand these performance metrics, they used Skechers as a sample company and its financial data. They then expanded that analysis to incorporate the financial data from 23 well- known sports product companies. The results unearthed a strong relationship (0.82 correlation) between supply chain impact days and return on assets. Thus, companies with a lower number of supply chain impact days had a higher return on assets than companies with a higher number of supply chain impact days. SPORTS PRODUCT SUPPLY CHAIN I m pa c t D ay s Inventory days D ay s R e c e i va b l e CHECK OUT THE APP: BUSINESS.UOREGON. EDU/SPM-SUPPLY- CHAIN-APP

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