SlideShare a Scribd company logo

Understanding the Supply Chain Index - 2015 - slide deck - 20 AUG 2015

Download as PPTX, PDF
Lora Cecere, profile picture
Lora Cecere

The document outlines insights from Supply Chain Insights LLC aimed at understanding supply chain performance, highlighting the complexities and challenges faced in the industry. It introduces methodologies like the Supply Chain Index, which measures supply chain improvement based on key metrics, and discusses rankings of notable companies based on their supply chain efficiency. Additionally, it presents details on upcoming research and reports concerning various industry sectors and their performance metrics.

Business
1 of 51
Downloaded 40 times
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Supply Chain Insights LLC Copyright © 2015, p. 1 Understanding the Supply Chain Index August 2015
Supply Chain Insights LLC Copyright © 2015, p. 2 About Me • Founder of Supply Chain Insights • LinkedIn Influencer • Guest Blogger for Forbes • Author of three books: Bricks Matter (2012), The Shaman’s Journal (2014) and Supply Chain Metrics That Matter (December 2014) • Partner at Altimeter Group (leader in open research) • Seven Years of Management Experience Leading Analyst Teams at Gartner and AMR Research • Eight Years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA) • Fifteen Years Leading Teams in Manufacturing and Distribution Operations for Clorox, Kraft/General Foods, Nestlé/Dreyer’s Grand Ice Cream and Procter & Gamble Contact Information: • Email: lora.cecere@supplychaininsights.com • Blog: www.supplychainshaman.com (10,000 page views/month) • Forbes: www.forbes.com/sites/loracecere/ • Twitter: lcecere (6200 followers) • LinkedIn: www.linkedin.com/in/loracecere (46,000 followers)
Supply Chain Insights LLC Copyright © 2015, p. 3 Our Goal Is to Help the Average Joe
Supply Chain Insights LLC Copyright © 2015, p. 4 Four Years of Work Wiley December 2012 Wiley December 2014 Self-published September 2014 Self-publishing September 2015
Supply Chain Insights LLC Copyright © 2015, p. 5 The Goal
Supply Chain Insights LLC Copyright © 2015, p. 6 A Supply Chain Is a Complex System with Complex Processes with Increasing Complexity What We Learned….
Supply Chain Insights LLC Copyright © 2015, p. 7 Descriptors Used by Leaders #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 8 The Supply Chain Effective Frontier
Supply Chain Insights LLC Copyright © 2015, p. 9 9 out of 10 Supply Chains are Stuck
Supply Chain Insights LLC Copyright © 2015, p. 10 • Metrics That Matter: Metrics that can be improved by the supply chain leader and have high correlation to market capitalization. • Market-Driven: The ability to sense and respond from market-to-market (from the customer’s customer to the supplier’s supplier) • NAICS Codes: US census classification(s) of industry groupings. • Orbit Chart: A comparison of year-over-year improvement between two supply chain metrics. • Supply Chain Index: A methodology developed by Supply Chain Insights in 2014 to measure supply chain improvement based on orbit chart measurements. • Supply Chains to Admire: An objective, and independent analysis of supply chains that are outperforming in the Supply Chain Metrics That Matter and are driving supply chain improvement as measured by the Supply Chain Index. • The Effective Frontier: Representation of a balanced set of measurements for the supply chain. Let’s Start with Definitions #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 11 Methodology Comparison Gartner Top 25 Supply Chains to Admire Focus Fortune 1000 Companies Companies by Industry Irrespective of Size Calculation -25% ROA (3 Year Weighted Average) -15% Inventory Turns (2014)10% Growth (2013 versus 2014) -50 % Opinion Performance Better than Peer Group for the Period of 2009-2014 on the Metrics That Matter Improvement Greater than the Average of the Peer Group for 2009-2014 Experience 10th Year 2nd Year #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 12 New Research Coming Soon! Individual Industries Automotive Consumer Electronics August 25, 2015 September 1, 2015 Supply Chains to Admire Final Report September 8, 2015 Metrics That Matter Correlations New Report on the Connection of Financial Metrics to Supply Chain Performance October 1, 2015 Industries (20) 3-PL A&D Apparel Automotive Automotive Suppliers Beauty Beverages Chemical Contract Manufacturing Consumer Packaged Goods Consumer Durables Consumer Electronics Department Stores Food Grocery Retail Hi-Tech and Electronics Heavy Equipment Mass Merchants Medical Device Packaging and Closures Semiconductor #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 13 Progress: All Industries Industry Snapshots (2006-2013) Industry Year –over- Year Revenue Growth Operating Margin Inventory Turns Cash-to- Cash Cycle Revenue per Employee (K$) SG&A Ratio Retail Apparel Industry 18% 39% 0.39 27% 05 05% 68 26% 325 18% 27% 05% Apparel Manufacturing Industry 14% 82% 0.12 32% 05 68% 150 08% 400 355% 27% 63% Mass Retail Industry 09% 50% 0.06 20% 06 06% 03 148% 350 48% 23% 6% Beverage Industry 09% 61% 0.19 16% 02 04% 53 46% 512 NC 24% 16% Pharmaceutical Industry 08% 47% 0.23 29% 03 16% 155 47% 572 32% 27% 08% Chemical Industry 08% 45% 0.10 10% 06 04% 87 23% 557 23% 14% 27% Medical Device Industry 06% 38% 0.14 32% 02 13% 206 16% 351 12% 34% 04% Grocery Retail Industry 06% 31% 0.03 37% 17 01% 10 50% 405 54% 14% 06% Consumer Packaged Goods 05% 25% 0.14 73% 08 482% 72 17% 333 14% 26% 09% Food Industry 05% 55% 0.10 19% 07 17% 40 04% 534 55% 20% 18% Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2013 Industry Average comprised of public companies (combined food & beverage industry: NAICS 3112% where % is any number from 0-9, 311320, 311520, 311821, 311941 & 312111), (chemical: NAICS 325188 & 325998), (consumer packaged goods: NAICS 3256% where % is any number from 0-9), (medical device industry: NAICS 339112), (pharmaceutical industry: NAICS 325412) reporting in One Source with 20123annual sales greater than $1billion NC=no change #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 14 Which Metrics Matter? #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 15 Correlations to Market Capitalization #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 16 What We Expected #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 17 A Supply Chain is a Complex System with Complex Processes with Increasing Complexity What We Learned…. #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 18 The Supply Chain Effective Frontier #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 19 Orbit Chart: Wal-Mart (Inventory Turns and Operating Margin) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 20 Orbit Chart: Apple (Inventory Turns and Operating Margin) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 21 Orbit Charts: Dow Chemical Company #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 22 Measuring Supply Chain Improvement Overall Ranking per Company • Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%) • Strength: Inventory Turns & Operating Margin Vector Trajectory (30% of score) • Resiliency: Inventory Turns & Operating Margin Mean Distance (30%) 𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙 = 𝟏 𝟑 𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 23 Supply Chains to Admire Methodology Performance Beats the industry average for operating margin, inventory turns and ROIC for 2006- 2014 and 2009-2014 Improvement Ranks above peer group average on The Supply Chain Index for 2006- 2014 or 2009-2014 + #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 24 Annual Study: Supply Chains To Admire Supply Chains to Admire 2015 to be Announced at the Supply Chain Insights Global Summit on September 9th and 10th #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 25 Consumer Products #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 26 Consumer Packaged Goods #SCIWEBINAR Company 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 Church & Dwight Co. Inc. 0.17 0.18 0.19 12.4 13.0 13.3 11% 13% 13% 4 2 Colgate-Palmolive 0.21 0.22 0.22 12.8 12.7 12.7 32% 33% 31% 7 8 The Clorox Company 0.17 0.17 0.16 14.9 14.5 14.4 21% 21% 22% 5 6 Kimberly Clark 0.13 0.13 0.13 8.7 8.9 9.0 16% 16% 16% 9 4 Newell Rubbermaid 0.09 0.10 0.09 7.7 8.0 8.2 7% 8% 9% 3 9 Procter & Gamble Co. 0.19 0.19 0.18 11.6 11.6 12.0 12% 12% 12% 6 5 Reckitt Benckiser Group 0.23 0.24 0.24 14.2 13.5 12.8 28% 26% 24% 8 7 Tupperware Brands Corp. 0.12 0.14 0.14 8.2 8.4 8.6 17% 20% 20% 1 1 Unilever plc 0.14 0.14 0.15 10.7 11.0 11.1 17% 17% 19% 2 3 Average 0.15 0.16 0.16 10.6 10.7 10.7 16% 17% 17% Performance and Improvement Operating Margin Inventory Turns Return on Invested Capital Supply Chain Index Rankings
Supply Chain Insights LLC Copyright © 2015, p. 27 9% 14% 19% -0.07 -0.02 0.03 0.08 0.13 0.18 RevenueGrowth Return on Invested Capital (ROIC) Procter & Gamble 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20122013 P&G: Growth and ROIC Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario PG 0.06, 14% Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Procter & Gamble Co. (PG) has an average of .06 for ROIC and 14% for revenue growth. Ideally, companies are increasing growth and Return on Invested Capital (ROIC) moving towards the upper right corner of the graph over time. Here, we Growth (y-axis) vs. ROIC (x- axis). Average (Return on Invested Capital, Revenue Growth) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 28 10.00 11.00 12.00 13.00 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 InventoryTurns Operating Margin Procter & Gamble 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 P&G: Inventory Turns and Operating Margins Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario PG 0.18, 11.75 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Procter & Gamble Co. (PG) has an average of .18 for operating margin and 11.75 for inventory turns. Ideally, companies are increasing inventory turns and operating margins moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margins(x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 29 10.00 11.00 12.00 13.00 14.00 15.00 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 InventoryTurns Operating Margin Colgate-Palmolive 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Colgate: Operating Margins and Inventory Turns Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario CL 0.21, 13.03 Trace the line from 2000 point to 2014 point to follow performance over time. The diamond shows the company’s average over the period. Ex: The Colgate-Palmolive Co. (CL) has an average of .21 for operating margin and 13.03 for inventory turns. Ideally, companies are increasing inventory turns and operating margin, moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 30 7.50 8.00 8.50 9.00 9.50 10.00 10.50 11.00 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 InventoryTurns Operating Margin Kimberly Clark 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Biggest Loser: Kimberly-Clark Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario KMB 0.15, 9.01 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Kimberly Clark Co. (KMB) has an average of .15 for operating margin and 9.01 for inventory turns. Ideally, companies are increasing inventory turns and operating margin moving towards the upper right corner of the graph over time. Average (Operating Margin, Inventory Turns) Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 31 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 InventoryTurns Operating Margin Unilever 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Unilever: Impressive Gains Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.13, 8.66 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Unilever Co. (UN) has an average of .13 for operating margin and 8.66 for inventory turns. Ideally, companies are increasing inventory turns and operating margin moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin(x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 32 9.00 10.00 11.00 12.00 13.00 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 InventoryTurns Operating Margin Procter & Gamble Unilever 2014 2006 2014 2006 Procter & Gamble and Unilever Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.14, 10.74 Average (Operating Margin, Inventory Turns) PG 0.19, 11.59 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 33 9.50 10.50 11.50 12.50 13.50 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 InventoryTurns Operating Margin Colgate Palmolive Unilever 2014 2006 2014 2006 Colgate and Unilever Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.14, 10.74 Average (Operating Margin, Inventory Turns) CL 0.21, 12.77 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 34 Procter & Gamble and Colgate Inventory Turns vs. Operating Margin (2006 – 2014) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 35 Pharmaceuticals Webinar August 4, 2015 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 36 Pharmaceuticals #SCIWEBINAR Company 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 Abbott Laboratories 0.11 0.11 0.12 8.98 8.79 8.11 12% 11% 10% 3 6 AstraZeneca plc 0.27 0.27 0.22 14.96 15.79 14.28 22% 19% 15% 9 8 Bristol-Myers Squibb Co. 0.08 0.08 0.08 7.77 7.76 7.48 7% 6% 7% 4 4 Eli Lilly and Company 0.20 0.23 0.21 8.24 8.42 8.40 16% 21% 18% 7 7 Merck and Company 0.15 0.13 0.16 9.12 7.35 7.22 15% 13% 11% 8 2 Novo Nordisk A/S 0.36 0.35 0.37 6.47 7.31 8.16 42% 51% 60% 5 4 Novartis AG 0.21 0.21 0.20 8.09 8.32 8.44 13% 11% 11% 1 1 Pfizer, Inc. 0.50 0.23 0.26 8.13 7.83 8.10 12% 0.10 12% 7 5 Teva Pharmaceutical Industries Limited 0.16 0.16 0.14 4.23 4.13 4.00 7% 8% 7% 2 3 Average 0.19 0.20 0.20 8.44 8.41 8.95 16% 18% 17% Operating Margin Inventory Turns Return on Invested Capital Supply Chain Index Performance and Improvement
Supply Chain Insights LLC Copyright © 2015, p. 37 9.00 10.00 11.00 12.00 13.00 14.00 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 InventoryTurns Operating Margin Johnson & Johnson 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Visualizing the Patterns Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2014 from YCharts Best Scenario JNJ 0.25,11.36 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Johnson & Johnson Co. (JNJ) has an average of .25 for operating margin and 11.36 for inventory turns. Ideally, companies are increasing inventory turns and operating margin, moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 38 Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 2006 4.0 5.0 6.0 7.0 8.0 9.0 10.0 -0.10 0.00 0.10 0.20 0.30 0.40 0.50 0.60 Operating Margin Eli Lilly and Company Novo Nordisk 2014 NVO 0.31, 6.48 2014 2006 Best Scenario LLY 0.24, 8.30 Average (Operating Margin, Inventory Turns) InventoryTurns Novo Nordisk Making Progress #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 39 7.00 8.00 9.00 10.00 11.00 12.00 13.00 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 InventoryTurns Operating Margin Johnson & Johnson Novartis 2014 2006 2014 2006 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts Best Scenario JNJ 0.25, 11.11 Average (Operating Margin, Inventory Turns) NVS 0.21, 8.30 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 40 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 InventoryTurns Operating Margin Johnson & Johnson Pfizer 2014 2006 2014 2006 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts Best Scenario JNJ 0.25, 11.11 Average (Operating Margin, Inventory Turns) PFE 0.21, 8.13 #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 41 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 TEVA 0.16, 4.28 Average (Operating Margin, Inventory Turns) 2006 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 0.00 0.10 0.20 0.30 Operating Margin TEVA Pharmaceutical Industries Mylan N.V. 2014 MYL 0.16, 4.83 2014 2006 Best Scenario InventoryTurns #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 42 The Journey #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 43 Metrics Maturity #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 44 • Which metrics matter? – Growth, operating margin, inventory turns, ROIC, customer service (in the eyes of the customer) • How do we get unstuck? – Focus cross-functionally on a balanced portfolio. Bonus employees against the portfolio. – Augment with functional metrics focused on improving RELIABILITY. • What are the functional reliability metrics? – Examples include: Forecasting, first pass yield, OEE, on-time delivery, orders shipped complete, hands-free orders, schedule attainment, safety metrics, employee turnover Insights #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 45 • Continuity of leadership • Supply chain talent development • Focus on a multi-year supply chain strategy • Clear governance to guide cross-functional decision-making • Strength in horizontal processes • Excellence in supply chain planning, network design and inventory management What Drives Top Performance? #SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 46#SCIWEBINAR
Supply Chain Insights LLC Copyright © 2015, p. 47 #SCIWEBINAR
#SCIWEBINAR
Understanding the Supply Chain Index - 2015 - slide deck - 20 AUG 2015
Supply Chain Insights LLC Copyright © 2015, p. 50 About Me • Founder of Supply Chain Insights • LinkedIn Influencer • Guest Blogger for Forbes • Author of three books: Bricks Matter (2012), The Shaman’s Journal (2014) and Supply Chain Metrics That Matter (December 2014) • Partner at Altimeter Group (leader in open research) • Seven Years of Management Experience Leading Analyst Teams at Gartner and AMR Research • Eight Years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA) • Fifteen Years Leading Teams in Manufacturing and Distribution Operations for Clorox, Kraft/General Foods, Nestlé/Dreyer’s Grand Ice Cream and Procter & Gamble Contact Information: • Email: lora.cecere@supplychaininsights.com • Blog: www.supplychainshaman.com (10,000 page views/month) • Forbes: www.forbes.com/sites/loracecere/ • Twitter: lcecere (6200 followers) • LinkedIn: www.linkedin.com/in/loracecere (46,000 followers)
Supply Chain Insights LLC Copyright © 2015, p. 51 Definition: Metric Equations Source: Supply Chain Insights LLC, Corporate Annual Reports (2000-2014) Metric Equations Cash-to-Cash Cycles = (Avg. Inventory/COGS + Avg. Accounts Receivable/Sales - Avg. Accounts Payable/Purchases)*91.5 Days of Inventory = (Average Inventory/COGS)*91.5 Days of Payables = (Average Accounts Payables/Purchases)*91.5 Days of Receivables = (Average Accounts Receivable/Sales)*91.5 Inventory Turns = (Cost of Sales/Average Inventory) Operating Margin = (Operating Income/Revenue) Return on Invested Capital = (Net Income/Invested Capital) Return on Net Assets = (Trailing 12 Month Net Income/Total Assets from the most recent quarter) Revenue Growth = (Quarterly Revenuei/Quarterly Revenuei-4 -1) Revenue per Employees = (Revenue/Average Annual Employee) #SCIWEBINAR

More Related Content

PPTX
Supply Chains to Admire - Slides - 24 SEP 2015
Lora Cecere
 
PPTX
Supply Chain Metrics That Matter in a Market-Driven World
Lora Cecere
 
PPTX
Metrics That Matter in a Market-Driven World
Lora Cecere
 
PPTX
Presentation for the OM Partners Conference end of September
Lora Cecere
 
PPTX
Presentation by Lora Cecere at the Foundation of Strategic Sourcing
Lora Cecere
 
PPTX
Future of Supply Chain Technologies
Lora Cecere
 
PPTX
Pharmaceutical versus Consumer Products: The Race for Supply Chain Excellence
Lora Cecere
 
PPTX
Cscmp4
Lora Cecere
 
Supply Chains to Admire - Slides - 24 SEP 2015
Lora Cecere
 
Supply Chain Metrics That Matter in a Market-Driven World
Lora Cecere
 
Metrics That Matter in a Market-Driven World
Lora Cecere
 
Presentation for the OM Partners Conference end of September
Lora Cecere
 
Presentation by Lora Cecere at the Foundation of Strategic Sourcing
Lora Cecere
 
Future of Supply Chain Technologies
Lora Cecere
 
Pharmaceutical versus Consumer Products: The Race for Supply Chain Excellence
Lora Cecere
 
Cscmp4
Lora Cecere
 

What's hot (20)

PPTX
Improving supply chain strength resiliency webinar lora final_loras comments2
Lora Cecere
 
PPTX
Presentation on the Future of Supply Chain Technologies
Lora Cecere
 
PDF
Lora Cecere “Market Driven Value Network”
Elemica
 
PPTX
The Future of Supply Chain Technologies
Lora Cecere
 
PDF
The modern supply chain present and future (by IDG, KaizenVietnam distributed)
KAIZEN Group Experts
 
PDF
Comparison for the Supply Chains to Admire and the Gartner Top 25
Lora Cecere
 
PPTX
Supply Chain Index – Part III – Technology and Apparel
Lora Cecere
 
PPTX
Post Covid-19 Recovery: Building Better Supply Chains
Lora Cecere
 
PPTX
Presentation at CSCMP Chicago Roundtable event on April 8, 2014
Lora Cecere
 
PPTX
Case Studies on the End-To-End Journey - Slide Deck - 30 MAR 2016
Lora Cecere
 
PDF
The Deloitte Consumer Tracker Q1 2016
Deloitte UK
 
PPTX
Llamasoft presentation2
Lora Cecere
 
PPTX
Summary of the Supply Chains to Admire Analysis
Lora Cecere
 
PDF
Opening Presentation for the Supply Chain Insights Global Summit
Lora Cecere
 
PPTX
Driving Analytics Strategy at Intel
Lora Cecere
 
PPTX
Comparison of the Supply Chains to Admire and Gartner Top 25 Winners for 2011...
Lora Cecere
 
PPTX
Supply Chain Risk Management Study slide deck - 18 NOV 2015
Lora Cecere
 
PPTX
2016 Supply Chains to Admire - Slide Deck - 20 July 2016
Lora Cecere
 
PDF
The Supply Chains To Admire Report for 2021
Lora Cecere
 
PPTX
Supply Chain Insights Webinar on Supply Chains to Admire
Lora Cecere
 
Improving supply chain strength resiliency webinar lora final_loras comments2
Lora Cecere
 
Presentation on the Future of Supply Chain Technologies
Lora Cecere
 
Lora Cecere “Market Driven Value Network”
Elemica
 
The Future of Supply Chain Technologies
Lora Cecere
 
The modern supply chain present and future (by IDG, KaizenVietnam distributed)
KAIZEN Group Experts
 
Comparison for the Supply Chains to Admire and the Gartner Top 25
Lora Cecere
 
Supply Chain Index – Part III – Technology and Apparel
Lora Cecere
 
Post Covid-19 Recovery: Building Better Supply Chains
Lora Cecere
 
Presentation at CSCMP Chicago Roundtable event on April 8, 2014
Lora Cecere
 
Case Studies on the End-To-End Journey - Slide Deck - 30 MAR 2016
Lora Cecere
 
The Deloitte Consumer Tracker Q1 2016
Deloitte UK
 
Llamasoft presentation2
Lora Cecere
 
Summary of the Supply Chains to Admire Analysis
Lora Cecere
 
Opening Presentation for the Supply Chain Insights Global Summit
Lora Cecere
 
Driving Analytics Strategy at Intel
Lora Cecere
 
Comparison of the Supply Chains to Admire and Gartner Top 25 Winners for 2011...
Lora Cecere
 
Supply Chain Risk Management Study slide deck - 18 NOV 2015
Lora Cecere
 
2016 Supply Chains to Admire - Slide Deck - 20 July 2016
Lora Cecere
 
The Supply Chains To Admire Report for 2021
Lora Cecere
 
Supply Chain Insights Webinar on Supply Chains to Admire
Lora Cecere
 
Ad

Viewers also liked (17)

PDF
Crosscheck: Intergation Methods, Supply Chain Management and the Boeing 787 D...
Herbert Ferguson-Augustus
 
PPTX
Why 80/20 is really 50/50
PowerAdvocate
 
PDF
2015 MHI Annual Industry Report – Supply chain innovation – Making the imposs...
Leon Eymael
 
PDF
industry-report-2016
David Schwebel
 
PPTX
Supply Chain Metrics that Matter in Market-driven World
Lora Cecere
 
PPTX
2014 CSCMP Presentation of the 2015 3PL Study
Shanton Wilcox
 
PPTX
Inventory Optimization 2015 Preliminary Summary Charts
Lora Cecere
 
PPTX
What Drives Inventory Effectiveness in a Market-Driven World? Summary Charts
Lora Cecere
 
PPTX
How can you position for growth in future ecosystems of trade and supply chai...
Misys
 
PDF
Workshop Supply Chain Finance (SCF)
Michelle Marsé
 
PDF
Supply Chain Collaboration: Consumer Packaged Goods Manufacturers & Retailers
Angela Carver
 
PDF
Up coming Opportunities in Offshore, Paul Savvides, SIEMENS
Invest Northern Ireland
 
PPTX
Imagine the Supply Chain of the Future
Lora Cecere
 
PPTX
Supply Chain Finance: Win-Win Working Capital Benefits for Buyers and Suppliers
SAP Ariba
 
PPT
Supply Chain Engineering
guestea0519
 
PPTX
Supply Chain Risk Management 2015 Summary Charts
Lora Cecere
 
PPT
Gas Turbine Theory - Principle of Operation and Construction
Sahyog Shishodia
 
Crosscheck: Intergation Methods, Supply Chain Management and the Boeing 787 D...
Herbert Ferguson-Augustus
 
Why 80/20 is really 50/50
PowerAdvocate
 
2015 MHI Annual Industry Report – Supply chain innovation – Making the imposs...
Leon Eymael
 
industry-report-2016
David Schwebel
 
Supply Chain Metrics that Matter in Market-driven World
Lora Cecere
 
2014 CSCMP Presentation of the 2015 3PL Study
Shanton Wilcox
 
Inventory Optimization 2015 Preliminary Summary Charts
Lora Cecere
 
What Drives Inventory Effectiveness in a Market-Driven World? Summary Charts
Lora Cecere
 
How can you position for growth in future ecosystems of trade and supply chai...
Misys
 
Workshop Supply Chain Finance (SCF)
Michelle Marsé
 
Supply Chain Collaboration: Consumer Packaged Goods Manufacturers & Retailers
Angela Carver
 
Up coming Opportunities in Offshore, Paul Savvides, SIEMENS
Invest Northern Ireland
 
Imagine the Supply Chain of the Future
Lora Cecere
 
Supply Chain Finance: Win-Win Working Capital Benefits for Buyers and Suppliers
SAP Ariba
 
Supply Chain Engineering
guestea0519
 
Supply Chain Risk Management 2015 Summary Charts
Lora Cecere
 
Gas Turbine Theory - Principle of Operation and Construction
Sahyog Shishodia
 
Ad

Similar to Understanding the Supply Chain Index - 2015 - slide deck - 20 AUG 2015 (20)

PPTX
Supply Chain Planning: A look Back and a Look Forward
Lora Cecere
 
PPTX
Presentation for the Demand-Driven Institute Conference on Friday
Lora Cecere
 
PPTX
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Lora Cecere
 
PPTX
Presentation for the Nexus Conference on the Internet of Things and the Evolu...
Lora Cecere
 
PPTX
Supply chain index webinar june 11 final
Lora Cecere
 
PPTX
Presentation for GHX on Cost to Serve
Lora Cecere
 
PPTX
Presentation at the Chief Supply Chain Officer Conference on June 19th
Lora Cecere
 
PPTX
Supply Chain Index Webinar May 19, 2014
Lora Cecere
 
PDF
Supply Chain Edge: Building a Better Supply Chain Survey Results
joebradySCE
 
PDF
Medical Device Supply Chain: An Analysis of the Supply Chain Metrics That Matter
Lora Cecere
 
PPTX
Evaluating Industry Performance in Supply Chain Metrics
Lora Cecere
 
PPTX
Cscmp metrics that matter
Lora Cecere
 
PDF
Supply Chains to Admire Analysis
Lora Cecere
 
PPTX
Supply Chain Metrics That Matter
Lora Cecere
 
PPTX
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Lora Cecere
 
PPTX
Logimed may7
Lora Cecere
 
PPTX
Why is Sales and Operations Planning So Hard?
Lora Cecere
 
PPTX
Steelwedge powerpoint webinar november15
Lora Cecere
 
PDF
Supply Chains To Admire 2020
Lora Cecere
 
PPTX
What Does Customer Service Mean? - Slide deck from webinar - 20 JAN 2016
Lora Cecere
 
Supply Chain Planning: A look Back and a Look Forward
Lora Cecere
 
Presentation for the Demand-Driven Institute Conference on Friday
Lora Cecere
 
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Lora Cecere
 
Presentation for the Nexus Conference on the Internet of Things and the Evolu...
Lora Cecere
 
Supply chain index webinar june 11 final
Lora Cecere
 
Presentation for GHX on Cost to Serve
Lora Cecere
 
Presentation at the Chief Supply Chain Officer Conference on June 19th
Lora Cecere
 
Supply Chain Index Webinar May 19, 2014
Lora Cecere
 
Supply Chain Edge: Building a Better Supply Chain Survey Results
joebradySCE
 
Medical Device Supply Chain: An Analysis of the Supply Chain Metrics That Matter
Lora Cecere
 
Evaluating Industry Performance in Supply Chain Metrics
Lora Cecere
 
Cscmp metrics that matter
Lora Cecere
 
Supply Chains to Admire Analysis
Lora Cecere
 
Supply Chain Metrics That Matter
Lora Cecere
 
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Lora Cecere
 
Logimed may7
Lora Cecere
 
Why is Sales and Operations Planning So Hard?
Lora Cecere
 
Steelwedge powerpoint webinar november15
Lora Cecere
 
Supply Chains To Admire 2020
Lora Cecere
 
What Does Customer Service Mean? - Slide deck from webinar - 20 JAN 2016
Lora Cecere
 

More from Lora Cecere (20)

PDF
2023 Reset Report v3.1.pdf
Lora Cecere
 
DOCX
Submission to Journal of Logistics
Lora Cecere
 
PDF
River of Demand - ALL RIVERS with QR.pdf
Lora Cecere
 
PPTX
NOW 2022 Conference Lora Cecere
Lora Cecere
 
PPTX
Digital Transformation Western Digital
Lora Cecere
 
PPTX
Imagine 2022 Rick McDonald Content rev5.pptx
Lora Cecere
 
PPTX
Sleep Number Supply Chain's To Admire.pptx
Lora Cecere
 
PPTX
Future of Healthcare--2030
Lora Cecere
 
PDF
AmeriCare Royal
Lora Cecere
 
PPTX
Supply Chains to Admire Award Winner
Lora Cecere
 
PPTX
Navigating the Talent Crunch
Lora Cecere
 
PPTX
Use of Social Tokens in Supply Chain
Lora Cecere
 
PPTX
Lora Cecere Opening Presentation Imagine 2022.pptx
Lora Cecere
 
PPTX
Summary Pilot Work Project Zebra
Lora Cecere
 
PDF
Rivers of Demand
Lora Cecere
 
PPTX
Building Outside-in Planning Processes
Lora Cecere
 
PDF
Supply Chains to Admire 2022
Lora Cecere
 
PPTX
Supply Chains to Admire Analysis 2022_2022 presentation.pptx
Lora Cecere
 
PPTX
Building Outside-in Supply Chain Processes
Lora Cecere
 
PDF
The Role of Analytics In Defining The Art Of The Possible
Lora Cecere
 
2023 Reset Report v3.1.pdf
Lora Cecere
 
Submission to Journal of Logistics
Lora Cecere
 
River of Demand - ALL RIVERS with QR.pdf
Lora Cecere
 
NOW 2022 Conference Lora Cecere
Lora Cecere
 
Digital Transformation Western Digital
Lora Cecere
 
Imagine 2022 Rick McDonald Content rev5.pptx
Lora Cecere
 
Sleep Number Supply Chain's To Admire.pptx
Lora Cecere
 
Future of Healthcare--2030
Lora Cecere
 
AmeriCare Royal
Lora Cecere
 
Supply Chains to Admire Award Winner
Lora Cecere
 
Navigating the Talent Crunch
Lora Cecere
 
Use of Social Tokens in Supply Chain
Lora Cecere
 
Lora Cecere Opening Presentation Imagine 2022.pptx
Lora Cecere
 
Summary Pilot Work Project Zebra
Lora Cecere
 
Rivers of Demand
Lora Cecere
 
Building Outside-in Planning Processes
Lora Cecere
 
Supply Chains to Admire 2022
Lora Cecere
 
Supply Chains to Admire Analysis 2022_2022 presentation.pptx
Lora Cecere
 
Building Outside-in Supply Chain Processes
Lora Cecere
 
The Role of Analytics In Defining The Art Of The Possible
Lora Cecere
 

Recently uploaded (20)

PDF
Digital Marketing & E-commerce Certificate Glossary.pdf.................
RoobaV2
 
PPTX
Board-Reporting-Package-by-Umbrex-5-23-23.pptx
Pars Six Sigma Excellence
 
PDF
ANALYZING THE OPPORTUNITIES OF DIGITAL MARKETING IN BANGLADESH TO PROVIDE AN ...
IJMIT JOURNAL
 
PDF
Tortilla Mexican Grill 发射点犯得上发射点发生发射点犯得上发生
ssun243
 
PDF
Blood Collected straight from the donor into a blood bag and mixed with an an...
UsamaJaved91
 
PPTX
CTG - Business Update 2Q2025 & 6M2025.pptx
HcTrSoros
 
PDF
Tata consultancy services case study shri Sharda college, basrur
nityanema19
 
PDF
1911 Gold Corporate Presentation Aug 2025.pdf
Shaun Heinrichs
 
PDF
Keppel_Proposed Divestment of M1 Limited
KeppelCorporation
 
PPTX
TRAINNING, DEVELOPMENT AND APPRAISAL.pptx
sy2773667
 
PDF
Satish NS: Fostering Innovation and Sustainability: Haier India’s Customer-Ce...
red402426
 
PPTX
BUSINESS CYCLE_INFLATION AND UNEMPLOYMENT.pptx
TasmiaThalil
 
PDF
Module 2 - Modern Supervison Challenges - Student Resource.pdf
OmoobaOrun1
 
PDF
Charisse Litchman: A Maverick Making Neurological Care More Accessible
The lifescience magaizne
 
PPTX
Slide gioi thieu VietinBank Quy 2 - 2025
hoadm5190
 
DOCX
Handbook of Entrepreneurship- Chapter 5: Identifying business opportunity.docx
DrSubinKMohan
 
PPTX
Principles of Marketing, Industrial, Consumers,
efranciscaantoinette
 
PPTX
basic introduction to research chapter 1.pptx
sangeethanagaraj8
 
DOCX
Hand book of Entrepreneurship 4 Chapters.docx
DrSubinKMohan
 
PPTX
Slide gioi thieu VietinBank Quy 2 - 2025
hoadm5190
 
Digital Marketing & E-commerce Certificate Glossary.pdf.................
RoobaV2
 
Board-Reporting-Package-by-Umbrex-5-23-23.pptx
Pars Six Sigma Excellence
 
ANALYZING THE OPPORTUNITIES OF DIGITAL MARKETING IN BANGLADESH TO PROVIDE AN ...
IJMIT JOURNAL
 
Tortilla Mexican Grill 发射点犯得上发射点发生发射点犯得上发生
ssun243
 
Blood Collected straight from the donor into a blood bag and mixed with an an...
UsamaJaved91
 
CTG - Business Update 2Q2025 & 6M2025.pptx
HcTrSoros
 
Tata consultancy services case study shri Sharda college, basrur
nityanema19
 
1911 Gold Corporate Presentation Aug 2025.pdf
Shaun Heinrichs
 
Keppel_Proposed Divestment of M1 Limited
KeppelCorporation
 
TRAINNING, DEVELOPMENT AND APPRAISAL.pptx
sy2773667
 
Satish NS: Fostering Innovation and Sustainability: Haier India’s Customer-Ce...
red402426
 
BUSINESS CYCLE_INFLATION AND UNEMPLOYMENT.pptx
TasmiaThalil
 
Module 2 - Modern Supervison Challenges - Student Resource.pdf
OmoobaOrun1
 
Charisse Litchman: A Maverick Making Neurological Care More Accessible
The lifescience magaizne
 
Slide gioi thieu VietinBank Quy 2 - 2025
hoadm5190
 
Handbook of Entrepreneurship- Chapter 5: Identifying business opportunity.docx
DrSubinKMohan
 
Principles of Marketing, Industrial, Consumers,
efranciscaantoinette
 
basic introduction to research chapter 1.pptx
sangeethanagaraj8
 
Hand book of Entrepreneurship 4 Chapters.docx
DrSubinKMohan
 
Slide gioi thieu VietinBank Quy 2 - 2025
hoadm5190
 

Understanding the Supply Chain Index - 2015 - slide deck - 20 AUG 2015

  • 1. Supply Chain Insights LLC Copyright © 2015, p. 1 Understanding the Supply Chain Index August 2015
  • 2. Supply Chain Insights LLC Copyright © 2015, p. 2 About Me • Founder of Supply Chain Insights • LinkedIn Influencer • Guest Blogger for Forbes • Author of three books: Bricks Matter (2012), The Shaman’s Journal (2014) and Supply Chain Metrics That Matter (December 2014) • Partner at Altimeter Group (leader in open research) • Seven Years of Management Experience Leading Analyst Teams at Gartner and AMR Research • Eight Years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA) • Fifteen Years Leading Teams in Manufacturing and Distribution Operations for Clorox, Kraft/General Foods, Nestlé/Dreyer’s Grand Ice Cream and Procter & Gamble Contact Information: • Email: lora.cecere@supplychaininsights.com • Blog: www.supplychainshaman.com (10,000 page views/month) • Forbes: www.forbes.com/sites/loracecere/ • Twitter: lcecere (6200 followers) • LinkedIn: www.linkedin.com/in/loracecere (46,000 followers)
  • 3. Supply Chain Insights LLC Copyright © 2015, p. 3 Our Goal Is to Help the Average Joe
  • 4. Supply Chain Insights LLC Copyright © 2015, p. 4 Four Years of Work Wiley December 2012 Wiley December 2014 Self-published September 2014 Self-publishing September 2015
  • 5. Supply Chain Insights LLC Copyright © 2015, p. 5 The Goal
  • 6. Supply Chain Insights LLC Copyright © 2015, p. 6 A Supply Chain Is a Complex System with Complex Processes with Increasing Complexity What We Learned….
  • 7. Supply Chain Insights LLC Copyright © 2015, p. 7 Descriptors Used by Leaders #SCIWEBINAR
  • 8. Supply Chain Insights LLC Copyright © 2015, p. 8 The Supply Chain Effective Frontier
  • 9. Supply Chain Insights LLC Copyright © 2015, p. 9 9 out of 10 Supply Chains are Stuck
  • 10. Supply Chain Insights LLC Copyright © 2015, p. 10 • Metrics That Matter: Metrics that can be improved by the supply chain leader and have high correlation to market capitalization. • Market-Driven: The ability to sense and respond from market-to-market (from the customer’s customer to the supplier’s supplier) • NAICS Codes: US census classification(s) of industry groupings. • Orbit Chart: A comparison of year-over-year improvement between two supply chain metrics. • Supply Chain Index: A methodology developed by Supply Chain Insights in 2014 to measure supply chain improvement based on orbit chart measurements. • Supply Chains to Admire: An objective, and independent analysis of supply chains that are outperforming in the Supply Chain Metrics That Matter and are driving supply chain improvement as measured by the Supply Chain Index. • The Effective Frontier: Representation of a balanced set of measurements for the supply chain. Let’s Start with Definitions #SCIWEBINAR
  • 11. Supply Chain Insights LLC Copyright © 2015, p. 11 Methodology Comparison Gartner Top 25 Supply Chains to Admire Focus Fortune 1000 Companies Companies by Industry Irrespective of Size Calculation -25% ROA (3 Year Weighted Average) -15% Inventory Turns (2014)10% Growth (2013 versus 2014) -50 % Opinion Performance Better than Peer Group for the Period of 2009-2014 on the Metrics That Matter Improvement Greater than the Average of the Peer Group for 2009-2014 Experience 10th Year 2nd Year #SCIWEBINAR
  • 12. Supply Chain Insights LLC Copyright © 2015, p. 12 New Research Coming Soon! Individual Industries Automotive Consumer Electronics August 25, 2015 September 1, 2015 Supply Chains to Admire Final Report September 8, 2015 Metrics That Matter Correlations New Report on the Connection of Financial Metrics to Supply Chain Performance October 1, 2015 Industries (20) 3-PL A&D Apparel Automotive Automotive Suppliers Beauty Beverages Chemical Contract Manufacturing Consumer Packaged Goods Consumer Durables Consumer Electronics Department Stores Food Grocery Retail Hi-Tech and Electronics Heavy Equipment Mass Merchants Medical Device Packaging and Closures Semiconductor #SCIWEBINAR
  • 13. Supply Chain Insights LLC Copyright © 2015, p. 13 Progress: All Industries Industry Snapshots (2006-2013) Industry Year –over- Year Revenue Growth Operating Margin Inventory Turns Cash-to- Cash Cycle Revenue per Employee (K$) SG&A Ratio Retail Apparel Industry 18% 39% 0.39 27% 05 05% 68 26% 325 18% 27% 05% Apparel Manufacturing Industry 14% 82% 0.12 32% 05 68% 150 08% 400 355% 27% 63% Mass Retail Industry 09% 50% 0.06 20% 06 06% 03 148% 350 48% 23% 6% Beverage Industry 09% 61% 0.19 16% 02 04% 53 46% 512 NC 24% 16% Pharmaceutical Industry 08% 47% 0.23 29% 03 16% 155 47% 572 32% 27% 08% Chemical Industry 08% 45% 0.10 10% 06 04% 87 23% 557 23% 14% 27% Medical Device Industry 06% 38% 0.14 32% 02 13% 206 16% 351 12% 34% 04% Grocery Retail Industry 06% 31% 0.03 37% 17 01% 10 50% 405 54% 14% 06% Consumer Packaged Goods 05% 25% 0.14 73% 08 482% 72 17% 333 14% 26% 09% Food Industry 05% 55% 0.10 19% 07 17% 40 04% 534 55% 20% 18% Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2013 Industry Average comprised of public companies (combined food & beverage industry: NAICS 3112% where % is any number from 0-9, 311320, 311520, 311821, 311941 & 312111), (chemical: NAICS 325188 & 325998), (consumer packaged goods: NAICS 3256% where % is any number from 0-9), (medical device industry: NAICS 339112), (pharmaceutical industry: NAICS 325412) reporting in One Source with 20123annual sales greater than $1billion NC=no change #SCIWEBINAR
  • 14. Supply Chain Insights LLC Copyright © 2015, p. 14 Which Metrics Matter? #SCIWEBINAR
  • 15. Supply Chain Insights LLC Copyright © 2015, p. 15 Correlations to Market Capitalization #SCIWEBINAR
  • 16. Supply Chain Insights LLC Copyright © 2015, p. 16 What We Expected #SCIWEBINAR
  • 17. Supply Chain Insights LLC Copyright © 2015, p. 17 A Supply Chain is a Complex System with Complex Processes with Increasing Complexity What We Learned…. #SCIWEBINAR
  • 18. Supply Chain Insights LLC Copyright © 2015, p. 18 The Supply Chain Effective Frontier #SCIWEBINAR
  • 19. Supply Chain Insights LLC Copyright © 2015, p. 19 Orbit Chart: Wal-Mart (Inventory Turns and Operating Margin) #SCIWEBINAR
  • 20. Supply Chain Insights LLC Copyright © 2015, p. 20 Orbit Chart: Apple (Inventory Turns and Operating Margin) #SCIWEBINAR
  • 21. Supply Chain Insights LLC Copyright © 2015, p. 21 Orbit Charts: Dow Chemical Company #SCIWEBINAR
  • 22. Supply Chain Insights LLC Copyright © 2015, p. 22 Measuring Supply Chain Improvement Overall Ranking per Company • Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%) • Strength: Inventory Turns & Operating Margin Vector Trajectory (30% of score) • Resiliency: Inventory Turns & Operating Margin Mean Distance (30%) 𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙 = 𝟏 𝟑 𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓 #SCIWEBINAR
  • 23. Supply Chain Insights LLC Copyright © 2015, p. 23 Supply Chains to Admire Methodology Performance Beats the industry average for operating margin, inventory turns and ROIC for 2006- 2014 and 2009-2014 Improvement Ranks above peer group average on The Supply Chain Index for 2006- 2014 or 2009-2014 + #SCIWEBINAR
  • 24. Supply Chain Insights LLC Copyright © 2015, p. 24 Annual Study: Supply Chains To Admire Supply Chains to Admire 2015 to be Announced at the Supply Chain Insights Global Summit on September 9th and 10th #SCIWEBINAR
  • 25. Supply Chain Insights LLC Copyright © 2015, p. 25 Consumer Products #SCIWEBINAR
  • 26. Supply Chain Insights LLC Copyright © 2015, p. 26 Consumer Packaged Goods #SCIWEBINAR Company 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 2011- 2014 2006- 2014 2009- 2014 Church & Dwight Co. Inc. 0.17 0.18 0.19 12.4 13.0 13.3 11% 13% 13% 4 2 Colgate-Palmolive 0.21 0.22 0.22 12.8 12.7 12.7 32% 33% 31% 7 8 The Clorox Company 0.17 0.17 0.16 14.9 14.5 14.4 21% 21% 22% 5 6 Kimberly Clark 0.13 0.13 0.13 8.7 8.9 9.0 16% 16% 16% 9 4 Newell Rubbermaid 0.09 0.10 0.09 7.7 8.0 8.2 7% 8% 9% 3 9 Procter & Gamble Co. 0.19 0.19 0.18 11.6 11.6 12.0 12% 12% 12% 6 5 Reckitt Benckiser Group 0.23 0.24 0.24 14.2 13.5 12.8 28% 26% 24% 8 7 Tupperware Brands Corp. 0.12 0.14 0.14 8.2 8.4 8.6 17% 20% 20% 1 1 Unilever plc 0.14 0.14 0.15 10.7 11.0 11.1 17% 17% 19% 2 3 Average 0.15 0.16 0.16 10.6 10.7 10.7 16% 17% 17% Performance and Improvement Operating Margin Inventory Turns Return on Invested Capital Supply Chain Index Rankings
  • 27. Supply Chain Insights LLC Copyright © 2015, p. 27 9% 14% 19% -0.07 -0.02 0.03 0.08 0.13 0.18 RevenueGrowth Return on Invested Capital (ROIC) Procter & Gamble 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20122013 P&G: Growth and ROIC Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario PG 0.06, 14% Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Procter & Gamble Co. (PG) has an average of .06 for ROIC and 14% for revenue growth. Ideally, companies are increasing growth and Return on Invested Capital (ROIC) moving towards the upper right corner of the graph over time. Here, we Growth (y-axis) vs. ROIC (x- axis). Average (Return on Invested Capital, Revenue Growth) #SCIWEBINAR
  • 28. Supply Chain Insights LLC Copyright © 2015, p. 28 10.00 11.00 12.00 13.00 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 InventoryTurns Operating Margin Procter & Gamble 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 P&G: Inventory Turns and Operating Margins Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario PG 0.18, 11.75 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Procter & Gamble Co. (PG) has an average of .18 for operating margin and 11.75 for inventory turns. Ideally, companies are increasing inventory turns and operating margins moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margins(x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
  • 29. Supply Chain Insights LLC Copyright © 2015, p. 29 10.00 11.00 12.00 13.00 14.00 15.00 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 InventoryTurns Operating Margin Colgate-Palmolive 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Colgate: Operating Margins and Inventory Turns Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario CL 0.21, 13.03 Trace the line from 2000 point to 2014 point to follow performance over time. The diamond shows the company’s average over the period. Ex: The Colgate-Palmolive Co. (CL) has an average of .21 for operating margin and 13.03 for inventory turns. Ideally, companies are increasing inventory turns and operating margin, moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
  • 30. Supply Chain Insights LLC Copyright © 2015, p. 30 7.50 8.00 8.50 9.00 9.50 10.00 10.50 11.00 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 InventoryTurns Operating Margin Kimberly Clark 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Biggest Loser: Kimberly-Clark Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from YCharts Best Scenario KMB 0.15, 9.01 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Kimberly Clark Co. (KMB) has an average of .15 for operating margin and 9.01 for inventory turns. Ideally, companies are increasing inventory turns and operating margin moving towards the upper right corner of the graph over time. Average (Operating Margin, Inventory Turns) Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). #SCIWEBINAR
  • 31. Supply Chain Insights LLC Copyright © 2015, p. 31 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 InventoryTurns Operating Margin Unilever 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Unilever: Impressive Gains Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.13, 8.66 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Unilever Co. (UN) has an average of .13 for operating margin and 8.66 for inventory turns. Ideally, companies are increasing inventory turns and operating margin moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin(x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
  • 32. Supply Chain Insights LLC Copyright © 2015, p. 32 9.00 10.00 11.00 12.00 13.00 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 InventoryTurns Operating Margin Procter & Gamble Unilever 2014 2006 2014 2006 Procter & Gamble and Unilever Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.14, 10.74 Average (Operating Margin, Inventory Turns) PG 0.19, 11.59 #SCIWEBINAR
  • 33. Supply Chain Insights LLC Copyright © 2015, p. 33 9.50 10.50 11.50 12.50 13.50 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 InventoryTurns Operating Margin Colgate Palmolive Unilever 2014 2006 2014 2006 Colgate and Unilever Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2002-2012 from One Source & YCharts Best Scenario UN 0.14, 10.74 Average (Operating Margin, Inventory Turns) CL 0.21, 12.77 #SCIWEBINAR
  • 34. Supply Chain Insights LLC Copyright © 2015, p. 34 Procter & Gamble and Colgate Inventory Turns vs. Operating Margin (2006 – 2014) #SCIWEBINAR
  • 35. Supply Chain Insights LLC Copyright © 2015, p. 35 Pharmaceuticals Webinar August 4, 2015 #SCIWEBINAR
  • 36. Supply Chain Insights LLC Copyright © 2015, p. 36 Pharmaceuticals #SCIWEBINAR Company 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 2011-2014 2006-2014 2009-2014 Abbott Laboratories 0.11 0.11 0.12 8.98 8.79 8.11 12% 11% 10% 3 6 AstraZeneca plc 0.27 0.27 0.22 14.96 15.79 14.28 22% 19% 15% 9 8 Bristol-Myers Squibb Co. 0.08 0.08 0.08 7.77 7.76 7.48 7% 6% 7% 4 4 Eli Lilly and Company 0.20 0.23 0.21 8.24 8.42 8.40 16% 21% 18% 7 7 Merck and Company 0.15 0.13 0.16 9.12 7.35 7.22 15% 13% 11% 8 2 Novo Nordisk A/S 0.36 0.35 0.37 6.47 7.31 8.16 42% 51% 60% 5 4 Novartis AG 0.21 0.21 0.20 8.09 8.32 8.44 13% 11% 11% 1 1 Pfizer, Inc. 0.50 0.23 0.26 8.13 7.83 8.10 12% 0.10 12% 7 5 Teva Pharmaceutical Industries Limited 0.16 0.16 0.14 4.23 4.13 4.00 7% 8% 7% 2 3 Average 0.19 0.20 0.20 8.44 8.41 8.95 16% 18% 17% Operating Margin Inventory Turns Return on Invested Capital Supply Chain Index Performance and Improvement
  • 37. Supply Chain Insights LLC Copyright © 2015, p. 37 9.00 10.00 11.00 12.00 13.00 14.00 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 InventoryTurns Operating Margin Johnson & Johnson 2000 2014 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Visualizing the Patterns Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2014 from YCharts Best Scenario JNJ 0.25,11.36 Trace the line from 2000 point to 2014 point to follow the performance over time. The diamond shows the company’s average over the period. Ex: The Johnson & Johnson Co. (JNJ) has an average of .25 for operating margin and 11.36 for inventory turns. Ideally, companies are increasing inventory turns and operating margin, moving towards the upper right corner of the graph over time. Here, we plot inventory turns (y-axis) vs. operating margin (x-axis). Average (Operating Margin, Inventory Turns) #SCIWEBINAR
  • 38. Supply Chain Insights LLC Copyright © 2015, p. 38 Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 2006 4.0 5.0 6.0 7.0 8.0 9.0 10.0 -0.10 0.00 0.10 0.20 0.30 0.40 0.50 0.60 Operating Margin Eli Lilly and Company Novo Nordisk 2014 NVO 0.31, 6.48 2014 2006 Best Scenario LLY 0.24, 8.30 Average (Operating Margin, Inventory Turns) InventoryTurns Novo Nordisk Making Progress #SCIWEBINAR
  • 39. Supply Chain Insights LLC Copyright © 2015, p. 39 7.00 8.00 9.00 10.00 11.00 12.00 13.00 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 InventoryTurns Operating Margin Johnson & Johnson Novartis 2014 2006 2014 2006 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts Best Scenario JNJ 0.25, 11.11 Average (Operating Margin, Inventory Turns) NVS 0.21, 8.30 #SCIWEBINAR
  • 40. Supply Chain Insights LLC Copyright © 2015, p. 40 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 InventoryTurns Operating Margin Johnson & Johnson Pfizer 2014 2006 2014 2006 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts Best Scenario JNJ 0.25, 11.11 Average (Operating Margin, Inventory Turns) PFE 0.21, 8.13 #SCIWEBINAR
  • 41. Supply Chain Insights LLC Copyright © 2015, p. 41 Inventory Turns vs. Operating Margin (2006 – 2014) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 TEVA 0.16, 4.28 Average (Operating Margin, Inventory Turns) 2006 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 0.00 0.10 0.20 0.30 Operating Margin TEVA Pharmaceutical Industries Mylan N.V. 2014 MYL 0.16, 4.83 2014 2006 Best Scenario InventoryTurns #SCIWEBINAR
  • 42. Supply Chain Insights LLC Copyright © 2015, p. 42 The Journey #SCIWEBINAR
  • 43. Supply Chain Insights LLC Copyright © 2015, p. 43 Metrics Maturity #SCIWEBINAR
  • 44. Supply Chain Insights LLC Copyright © 2015, p. 44 • Which metrics matter? – Growth, operating margin, inventory turns, ROIC, customer service (in the eyes of the customer) • How do we get unstuck? – Focus cross-functionally on a balanced portfolio. Bonus employees against the portfolio. – Augment with functional metrics focused on improving RELIABILITY. • What are the functional reliability metrics? – Examples include: Forecasting, first pass yield, OEE, on-time delivery, orders shipped complete, hands-free orders, schedule attainment, safety metrics, employee turnover Insights #SCIWEBINAR
  • 45. Supply Chain Insights LLC Copyright © 2015, p. 45 • Continuity of leadership • Supply chain talent development • Focus on a multi-year supply chain strategy • Clear governance to guide cross-functional decision-making • Strength in horizontal processes • Excellence in supply chain planning, network design and inventory management What Drives Top Performance? #SCIWEBINAR
  • 46. Supply Chain Insights LLC Copyright © 2015, p. 46#SCIWEBINAR
  • 47. Supply Chain Insights LLC Copyright © 2015, p. 47 #SCIWEBINAR
  • 50. Supply Chain Insights LLC Copyright © 2015, p. 50 About Me • Founder of Supply Chain Insights • LinkedIn Influencer • Guest Blogger for Forbes • Author of three books: Bricks Matter (2012), The Shaman’s Journal (2014) and Supply Chain Metrics That Matter (December 2014) • Partner at Altimeter Group (leader in open research) • Seven Years of Management Experience Leading Analyst Teams at Gartner and AMR Research • Eight Years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA) • Fifteen Years Leading Teams in Manufacturing and Distribution Operations for Clorox, Kraft/General Foods, Nestlé/Dreyer’s Grand Ice Cream and Procter & Gamble Contact Information: • Email: lora.cecere@supplychaininsights.com • Blog: www.supplychainshaman.com (10,000 page views/month) • Forbes: www.forbes.com/sites/loracecere/ • Twitter: lcecere (6200 followers) • LinkedIn: www.linkedin.com/in/loracecere (46,000 followers)
  • 51. Supply Chain Insights LLC Copyright © 2015, p. 51 Definition: Metric Equations Source: Supply Chain Insights LLC, Corporate Annual Reports (2000-2014) Metric Equations Cash-to-Cash Cycles = (Avg. Inventory/COGS + Avg. Accounts Receivable/Sales - Avg. Accounts Payable/Purchases)*91.5 Days of Inventory = (Average Inventory/COGS)*91.5 Days of Payables = (Average Accounts Payables/Purchases)*91.5 Days of Receivables = (Average Accounts Receivable/Sales)*91.5 Inventory Turns = (Cost of Sales/Average Inventory) Operating Margin = (Operating Income/Revenue) Return on Invested Capital = (Net Income/Invested Capital) Return on Net Assets = (Trailing 12 Month Net Income/Total Assets from the most recent quarter) Revenue Growth = (Quarterly Revenuei/Quarterly Revenuei-4 -1) Revenue per Employees = (Revenue/Average Annual Employee) #SCIWEBINAR