Sysco's Supply Chain Management Practices

In 2003, a study of the five-year annualized total return on capital of different corporations in the food market sector in the US revealed that SYSCO was one of the best in the market with an estimated return of 22.3 percent (Refer to Table I for the list of corporations in the study). One of the many reasons for SYSCO's better performance over its competitors was that it kept distribution costs under control, which was possible due to its supply chain management practices and extensive use of information technology (Refer to Exhibit VI for the brief profile of SYSCO's competitors). For a distribution company such as SYSCO, efficient supply chain management was crucial for the growth of the company...

Analysts noted that SYSCO had committed itself to maximize its supply chain efficiencies through continued investment in initiatives like the National Supply Chain Project. Given SYSCO's success in the foodservice distribution business, they felt that the main obstacle for it would be if the company became complacent of its own success. Some analysts were also concerned about the slowing growth prospects for the company. However, Schnieders opined that even though SYSCO was the largest foodservice marketer and distributor in North America, it only had a 14 percent market share and there were plenty of opportunities for long-term growth...