Planning benchmarking webinar
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Transcript of Planning benchmarking webinar
Supply Chain Planning Benchmarking
June 2014
Supply Chain Insights LLC Copyright © 2014, p. 2
An independent supply chain analyst and research company, focused on delivering actionable and objective advice for supply
chain leaders.
Our Mission
Supply Chain Insights LLC Copyright © 2014, p. 3
Supply Chain Insights
Our Methodology
What is Supply Chain Excellence?
Planning Benchmarking
Next Steps
Wrap-up
Supply Chain Insights LLC Copyright © 2014, p. 4
Our Research Difference
Our Research DifferenceCompany Audience Inputs Research Methodology Outputs Paid Services
Our Model
(Supply Chain Insights)
Supply chain leader
InquiryResearch
hypothesis
Combination of quantitative and qualitative research, coupled with
financial benchmarking to unearth new insights. Survey
respondents are always known and kept confidential.
Open research(available to all):
• Blog posts• Podcasts• Reports• Webinars
• Advisory• Speeches• Event• Training• Custom
research
Conventional Analyst Model
CIO audience Inquiry
When a question is asked multiple times, the analyst digs in to do some “research” to determine the answer.
Research is based on a series of phone calls for a qualitative research project. On occasion, a quantitative research
project is completed.
Paid research (access to the
research is only allowed based on
membership):• Alerts• Reports
• Networking & peer group membership with access to written research
• Advisory• Research
subscription services
• Speaking
Networking Model
A peer group of members
Direction of the peer advisory
board
Belief that there are known best practices to mine from the participants.
Paid research (access to the
research is based on membership)
• Alerts• Reports
• Networking & peer group membership with access to written research
• Advisory• Research
subscription services
• Speaking
Business Development
Model
Based on the paid research project by
a vendor
A research question by a vendor for a paid survey
Respondents are tied to business development efforts for a technology vendor. Lists are shared and used in business development campaigns.
Research written for the vendor
• Marketing development campaigns
Supply Chain Insights LLC Copyright © 2014, p. 5
What Does Research Mean to Us?
3 Core Research Types 5 Research Services & Products
1. Quantitative Surveys
2. Financial Analyses
3. Qualitative Interviews
1. Research Projects
2. Supply Chain Index
3. Financial Benchmarking
4. Supply Chain Planning Benchmarking
5. Technology Market Share Project
Results Shared Openly & Free of Charge
Reports Webinars Infographics Podcasts Blogs
Supply Chain Insights LLC Copyright © 2014, p. 6
Supply Chain Insights
Our Methodology
What is Supply Chain Excellence?
Planning Benchmarking
Next Steps
Wrap-up
Supply Chain Insights LLC Copyright © 2014, p. 7
A Supply Chain is a Complex System
with Complex Processes
with Increasing Complexity
Our Belief
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 8
Resilient and predictable
Balanced across the set of metrics to maximize value
Showing year-over-year strength against peer group
Desired Corporate Performance
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 9
The Supply Chain Effective Frontier:First Representation
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 10
While we like this framework, there is no good source of consistent and accurate data for:
– Forecast Accuracy– Case Fill Rate– Corporate Social Responsibility
Problem with this Framework
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 11
We believe that supply chain practices are “evolving practices” and that we do not know what are “best practices.”
Nine out of ten companies are stuck at the intersection of margin and cycles. We want to help companies tackle the
Effective Frontier with new ways of thinking.
Our Philosophy
Supply Chain Insights LLC Copyright © 2014, p. 12
Correlations to Market Capitalization
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 13
How to Read an Orbit Chart
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 14
Overall Ranking per Company• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%)• Strength: Inventory Turns & Operating Margin Vector Trajectory (30%)• Resiliency: Inventory Turns & Operating Margin Mean Distance (30%)• Peer: Peer Rankings by Industry (10%)
The Supply Chain IndexA new way to measure relative supply chain performance by industry, based on 4 components: balance, strength, resiliency and peer rankings.
Supply Chain Index: A Measure of Supply Chain Improvement
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 15
The Index Framework
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 16
Supply Chain Index
30% 30% 30% 10%
#sciwebinar
What is the right weighting? What is the right time period?
Supply Chain Insights LLC Copyright © 2014, p. 17
An exclusive, invitation-only group of senior supply chain leaders (330 at present):• Two private networking events/year• One-on-one networking as needed• Invitations to rank companies for the
Supply Chain Index (one per company)• Monthly calls on specific topics
Shaman’s Circle
Food and Beverage
Supply Chain Insights LLC Copyright © 2014, p. 19
Supply Chain Index: Food and Beverage2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 20
Campbell Soup and Hershey(2000-2013)
Supply Chain Insights LLC Copyright © 2014, p. 21
General Mills and Kellogg’s2000-2012
Supply Chain Insights LLC Copyright © 2014, p. 22
Supply Chain Index: Food and Beverage2009-2012
#sciwebinar
Chemical
Supply Chain Insights LLC Copyright © 2014, p. 24
Supply Chain Index: Chemical2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 25
Inventory Turns vs. Operating Margin(2000-2012)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012
0.00 0.10 0.20 0.303
4
5
6
7
8
2000
2012
2000
2012
BASF SE E. I. du Pont de Nemours and Company
Operating Margin
Inv
en
tory
Tu
rns
Best Scenario
BAS0.10, 5.3
DD0.10, 4.0
Average (Operating Margin, Inventory Turns)
Supply Chain Insights LLC Copyright © 2014, p. 26
Supply Chain Index: Chemical2009-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 27
Supply Chain Insights
Our Methodology
What is Supply Chain Excellence?
Planning Benchmarking
Next Steps
Wrap-up
Supply Chain Insights LLC Copyright © 2014, p. 28
• Objective: To conduct a comprehensive study of supply chain planning effectiveness.
• Methodology: We combine financial ratio data, quantitative survey data and qualitative research to provide unique insights to companies, with a focus on demand, supply, and S&OP.
• Timing: June - December 2014
• Why Participate: To better assess business performance from multiple angles.
Supply Chain Planning Benchmarking
Supply Chain Insights LLC Copyright © 2014, p. 29
Planning Benchmarking
Quantitative Surveys
Qualitative Interviews
Financial Analyses
Views of Planners: Analytics, Ease of Use,
Satisfaction with Reporting and Optimization, Use of Excel,
Agility and Alignment, What-if Analysis, Satisfaction by Region
Organizational Design: Organizational Charts,
Training Programs, Turnover, Open
Positions, Salaries, Tenure
Output: Report and NetworkingPlanner Productivity, Organizational Alignment and Balance, The Relationship of Planning, Gap between User and Leadership Perspectives, IT Effectiveness, Effectiveness and Financial Metrics, Planning Effectiveness in Demand and Supply
Views of Leaders: Accuracy of Plan, Organizational Fit,
Overall Satisfaction, Satisfaction with Vendor
Corporate Performance: DOI, MAPE, BIAS, Case Fill, RONA, ROIC, ROA, Growth for 2000-2013,
2006-2013, and 2009-2013
Technology: Version of APS,
Number of Instances, Frequency of Planning, Custom Optimization
Supply Chain Insights LLC Copyright © 2014, p. 30
The Life of a Survey
Design
Develop Field Analy
ze Share
• Objectives• Hypothesis• Respondent requirements
• Questionnaire development
• Online programming and testing
• Conducted online
• SCI database, social networks
• Partner outreach
• Independent of partners
• Reported in aggregate
• Reports, charts & infographics
• Open content research
3 months on average from start to finish
Supply Chain Insights LLC Copyright © 2014, p. 31
Divisional Analysis
Supply Chain Insights LLC Copyright © 2014, p. 32
Supply Chain Planning Benchmarking
Input Data
• Planning Process Evaluation• Review of three months of demand planning
output• Analysis of Sales and Operations Planning
documentation for three months
• Planning Process Review• Silent participant on S&OP review for one month• Review of Forecast Value Add data (if available)• Analysis of Tactical Supply Planning plans
• Quantitative Survey Input• Analysis of supply chain planner data
(satisfaction with technologies, use of technologies, and current state of processes). Collection of at least 30 respondents per company per node analyzed.
• Financial Data• When benchmarking divisional and regional
processes the need for DOI, RONA, Growth, Operating Margin, Cost of Goods Sold for the period of 2006-2013 (all data to be kept confidential)
• Case Fill data by quarter by division and region for 2006-2013
• Qualitative Analysis• Interviews of five supply chain leaders per
company. Goal is to understand the importance and performance of planning based on their views. Identify leadership belief statements.
• Organizational Details• Time for implementation• Number of planners per region per application• Turn-over of planners• Training program details• Organizational reporting
• Technology Implementation• Type of software and implementation details• Set-up: Number of instances and frequency• ERP Landscape• % of Business Planned
• Supply Chain Index Analysis• Progress on operating margin and inventory
turns• Resiliency• Progress on growth and ROIC• Customer service fulfillment
Supply Chain Insights LLC Copyright © 2014, p. 33
Supply Chain Planning Benchmarking
Output Data
• Gap Analysis. Contrast of leadership’s perspectives versus planners’ beliefs. • Effectiveness of Demand Planning. Analysis of forecast-ability and actual results for bias,
MPE, MAPE and the connection to the changes in business outcome of margin, inventory, customer service (case fill), growth, and ROIC/RONA. Time to plan.
• Effectiveness of Supply Planning. Balance between S&OP, slush and freeze periods and the number of changes in the freeze duration, use of constraints and what-if analysis, analysis of inventory (cycle, safety, seasonal, promotional, build and Slow and obsolete, and write-offs). Analysis of inventory turns, manufacturing changes, and planning cycle.
• Effectiveness of Supply Planning. The impact of supply planning processes on agility, resiliency, and balance. Analysis of the use of constraints, bottlenecks, what-if analysis, and optimization techniques as compared to peer group.
• Organizational Insights. Understanding of employee productivity, satisfaction, alignment, experience, and turnover as compared to peer group.
• Technology Satisfaction. Analysis of the technology footprint versus user satisfaction. Cost of implementation and ongoing budgets. IT support efforts. Use of planning tools.
Supply Chain Insights LLC Copyright © 2014, p. 34
• Manufacturers greater than $1B • Deployed APS for Demand and Supply• Planning Group for at Least Five Years• Support by the Executive Team
Who Can Participate?
Supply Chain Insights LLC Copyright © 2014, p. 35
Founding Members Participating Members
Input into the Study Design Participates in the Study
Ability to Get Custom Cuts of the Data for Regions and Divisions
No Custom Data Cuts
Custom Report Standard Report
Types of Participation
Supply Chain Insights LLC Copyright © 2014, p. 36
Supply Chain Insights
Our Methodology
What is Supply Chain Excellence?
Planning Benchmarking
Next Steps
Wrap-up
Supply Chain Insights LLC Copyright © 2014, p. 37
• June Kick-off Project: Define Scope and Assign Project Manager
• Late June Refine Questionnaire and Begin the Process of Sending the Survey to Participants
• July Conduct Leadership Interviews and Begin to Gather Technology Data
• Late July Schedule S&OP Silent Participant Sessions• August Gather Planning Output Data from Demand, Supply
and S&OP• September Begin Analysis• October Refine Analysis• December Final Report• January Networking Session with Participants
(Optional)
Timetable
Supply Chain Insights LLC Copyright © 2014, p. 38
1. Define scope. Set-up a one hour call to discuss objectives, concerns and scope.
2. Assign a Project Manager, and socialize within the organization.
3. Set up interviews for the qualitative interviews with executives, and arrange for the silent participation in S&OP
4. Gather planning documents (demand, inventory, and S&OP documents) for the period of May-August of 2014.
5. Share details on the technology implementation. Footprint, data model, Software release, planning cycle.
6. Gather documents on organizational design: number of planners, reporting structures, training programs
7. Share data on customer service by business based on scope (monthly data for the last three years)
Next Steps
Questions?
Supply Chain Insights LLC Copyright © 2014, p. 40
What’s Happening at Supply Chain Insights
www.supplychaininsights.com
Supply Chain Insights LLC Copyright © 2014, p. 41
About Lora Cecere
• Founder of Supply Chain Insights
• Invited to be a “LinkedIn Influencer”
• Invited to write a guest blog for Forbes
• Author of 2 books: Bricks Matter (2012) and Metrics That Matter (to publish Fall of 2014)
• Partner at Altimeter Group (leader in open research)
• 7 years of management experience leading analyst teams at Gartner and AMR Research
• 8 years experience in marketing and selling supply chain software at Descartes Systems Group and Manugistics (now JDA)
• 15 years leading teams in manufacturing and distribution operations for Clorox, Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter & Gamble.
Contact Information: • Email: [email protected]• Blog: www.supplychainshaman.com (6000 pageviews/month)• Forbes: http://www.forbes.com/search/?q=lora+cecere• Twitter: lcecere (4800 followers)• LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (7000 in the network)