The Direction of Causality Between Supply Chain Excellence and Firm Performance.

A widely-accepted measure of supply chain excellence is the Supply Chain Top 25 List published annually by Gartner Research. It evaluates firms from five quality dimensions: return on assets, inventory turns, revenue growth, peer evaluation, and Gartner opinion. However, subjective voting by industrial experts and Gartner consultants are likely to be influenced by financial market variables, such as a firm's market value, alpha, beta, and market return. This article investigates whether the Gartner list is a true reflection of a firm's SCM excellence and how market variables affect the Gartner list, especially its subjective quality dimensions. Correlation and regression analysis show that the Gartner list is largely affected by a firm's market value and alpha, but is not associated with the firm's beta and market return. Moreover, the Gartner list is influenced by a firm's prior market information, but is not capable to predict its future performance.