Improving Supply Chain Strength and Resiliency
WebinarApril 24, 2014
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 2
Supply Chain Insights is focused on delivering independent, actionable and objective
advice for supply chain leaders.
A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know
and metrics that matter.
About Us
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 3
Presenters
Abby MayerResearch Associate
Lora CecereFounder and CEO
#sciwebinar
Dr. George RungerProfessor, CIDSE, ASU
Supply Chain Insights LLC Copyright © 2013, p. 4
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 5
A Supply Chain is a Complex System
with Complex Processes
with Increasing Complexity
Our Belief
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 6
Perform better than peer group
Improve year-over-year results
Align internally on metrics
Deliver against the business strategy
Demonstrate consistency in results
Use innovation in supply chain processes
Balance. Be leaders in managing trade-offs
Our Point of View: Definition of Supply Chain Excellence
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 7
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 © 2013, p. 8
The Supply Chain Effective Frontier:First Representation
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 9
The Supply Chain Effective Frontier: Second Representation
#sciwebinar
In most supply chains, complexity has risen throwing the supply chain out of balance. We find that nine out of ten companies are stuck at the intersection of inventory turns and operating margin.
Supply Chain Insights LLC Copyright © 2013, p. 10
Supply Chain FinanceIs a Barrier for Most
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 11
Today’s Supply Chain
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 12
A Business Continuity Risk
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 13
Overall Ranking per Company• Strength: Inventory Turns & Operating Margin Vector Trajectory (30%)• Balance: Return on Invested Capital & Revenue Growth 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: strength, balance, resiliency and peer rankings.
Supply Chain Index
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 14
Supply Chain Index= .3(Ranking on Growth/ROIC)+.3(Ranking on Operating Margin/Inventory)+.3(Resiliency Ranking)+.1 (Peer Assessment Ranking)
Supply Chain Index Calculation
NAICS Code
Growth/ROIC)Value
BalanceRanking
Operating Margin/Inventory Value
Strength Ranking
Resiliency Value
Resiliency Ranking
Peer Rating Peer Ranking
Total Score
For the period of 2006-2013
Supply Chain Insights LLC Copyright © 2013, p. 15
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 16
Mining 20 Years of Financial Data
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 17
How to Read an Orbit Chart
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 18
Available at www.supplychaininsights.com/report-archives
Supply Chain Metrics That Matter Reports
#sciwebinar
* Reports look at industry performance of a small peer group on growth, profitability, cycle and complexity metrics
* Includes cross industry analysis of cash-to-cash cycle, operating margin and resiliency
*19 reports to date
Supply Chain Insights LLC Copyright © 2013, p. 19
Supply Chain Metrics That Matter Reports
Supply Chain Insights LLC Copyright © 2013, p. 20
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 21
Considerations
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 22
Resiliency
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 23
A Look at Medical Device Companies:Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 24
Medical Device Company Resiliency
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 25
Inventory Turns vs. Operating Margin (2000-2012)
Supply Chain Insights LLC Copyright © 2013, p. 26
Consumer Products Resiliency
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 27
A Look at Chemical Companies:Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 28
Chemical Company Resiliency
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 29
A Look at Food:Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 30
Food Products Resiliency
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 31
Consumer Electronics: Inventory Turns vs. Operating Margin (2000-2012)
Supply Chain Insights LLC Copyright © 2013, p. 32
Consumer Electronics Resiliency
#sciwebinar
Company Panasonic Samsung Sanyo Harman LG Electronics
Sony
Resiliency .51 .59 .68 .93 1.12 1.46
Supply Chain Insights LLC Copyright © 2013, p. 33
Strength & Balance
• Strength: Inventory Turns & Operating Margin Vector Trajectory (30%)
• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%)
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 34
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 35
Why It Matters
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
BASF SE 0.10 5.3 39 .0.55
E. I. du Pont de Nemours and Co.
0.10 4.0 56 .0.67
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
Samsung Electronics Co., Ltd.
0.11 8.3 35 0.59
LG Electronics Inc. 0.04 6.7 49 1.13
Company Average Operating Margin
Average Inventory Turns
Average Days of Payables
Resiliency Ranking
Procter & Gamble Co. 0.18 5.6 55 .0.52
Unilever N.V. 0.13 5.3 93 0.74
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 36
• Benchmark against peers.• Improve reliability of inventory turns &
operating margin performance.• Understand that industries with high variability
pose risk to your supply chain.• Measure progress in centimeters, not
kilometers.
What Can You Do?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 37
Agenda
Supply Chain Index Vision
History of Our Work
Resiliency Patterns and Mathematical Calculation
Why It Matters To You
What's Next?
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 38
1. Finalize Strength & Balance metrics
2. Supply Chain Index methodology report in May
3. Consumer, Healthcare and Industrial Value Network reports through the summer
4. Final analysis of companies to be revealed at the 2014 Supply Chain Insights Global Summit
Next Steps
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 39
Metrics That Matter
• Lora Cecere’s 2nd book: Metrics That Matter
• To publish in Fall 2014
http://tinyurl.com/metricsthatmatter
Pre-orders available on Amazon:
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 40
What’s Happening at Supply Chain Insights?
www.supplychaininsights.com
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, 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)
#sciwebinar
Questions?
#sciwebinar
Top Related