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Presentation for the Upcoming Llamasoft Event Summercon. Looking forward to discussing the evolution of value networks and the use of network design technologies at this event on June 20th in Ann ...

Presentation for the Upcoming Llamasoft Event Summercon. Looking forward to discussing the evolution of value networks and the use of network design technologies at this event on June 20th in Ann Arbor, MI.

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  • 1. Defining Supply Chain Excellence June 2014
  • 2. Supply Chain Insights LLC Copyright © 2014, p. 2 Do we Have Best Practices?
  • 3. Supply Chain Insights LLC Copyright © 2014, p. 3 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
  • 4. Supply Chain Insights LLC Copyright © 2014, p. 4 Agenda #sciwebinar
  • 5. Supply Chain Insights LLC Copyright © 2014, p. 5 To develop a methodology to help supply chain leaders define supply chain improvement. To be effective, it had to: • Evaluate progress over time by peer group. • Be objective and data driven. • Compare progress of companies across currencies. • Enable the comparison of progress of companies regardless of size: very large to mid-market companies. • Connect supply chain performance to corporate performance. • Use standardized, and available data. Our Vision
  • 6. Supply Chain Insights LLC Copyright © 2014, p. 6 Today’s Supply Chain #sciwebinar
  • 7. Supply Chain Insights LLC Copyright © 2014, p. 7 Supply Chain Risk #sciwebinar
  • 8. Supply Chain Insights LLC Copyright © 2014, p. 8 A Supply Chain is a Complex System with Complex Processes with Increasing Complexity Our Belief #sciwebinar
  • 9. Supply Chain Insights LLC Copyright © 2014, p. 9  Resilient and predictable  Balanced across the set of metrics to maximize value  Showing year-over-year strength against peer group Desired Corporate Performance #sciwebinar
  • 10. Supply Chain Insights LLC Copyright © 2014, p. 10 The Supply Chain Effective Frontier: First Representation #sciwebinar
  • 11. Supply Chain Insights LLC Copyright © 2014, p. 11 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
  • 12. Supply Chain Insights LLC Copyright © 2014, p. 12 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.
  • 13. Supply Chain Insights LLC Copyright © 2014, p. 13 The Efficient Supply Chain is Not Effective
  • 14. Supply Chain Insights LLC Copyright © 2014, p. 14 Intersection of Operating Margin and Inventory Turns #sciwebinar
  • 15. Supply Chain Insights LLC Copyright © 2014, p. 15 Companies Get More Serious With A Recession #sciwebinar
  • 16. Supply Chain Insights LLC Copyright © 2014, p. 16 Agenda #sciwebinar
  • 17. Supply Chain Insights LLC Copyright © 2014, p. 17 Mining 20 Years of Financial Data #sciwebinar
  • 18. Supply Chain Insights LLC Copyright © 2014, p. 18 Correlations to Market Capitalization #sciwebinar
  • 19. Supply Chain Insights LLC Copyright © 2014, p. 19 How to Read an Orbit Chart #sciwebinar
  • 20. Supply Chain Insights LLC Copyright © 2014, p. 20 Consumer Value Network Performance 2006-2012
  • 21. Supply Chain Insights LLC Copyright © 2014, p. 21 Agenda #sciwebinar
  • 22. Supply Chain Insights LLC Copyright © 2014, p. 22 Supply Chain Metrics That Matter Reports #sciwebinar What is Resiliency? Tightness of the Pattern on the Orbit Chart for Operating Margin and Inventory Turns
  • 23. Supply Chain Insights LLC Copyright © 2014, p. 23 Resiliency 2000-2012 #sciwebinar
  • 24. Supply Chain Insights LLC Copyright © 2014, p. 24 Agenda #sciwebinar
  • 25. Supply Chain Insights LLC Copyright © 2014, p. 25 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 Index A 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
  • 26. Supply Chain Insights LLC Copyright © 2014, p. 26 The Index Framework #sciwebinar
  • 27. Supply Chain Insights LLC Copyright © 2014, p. 27 Supply Chain Index 30% 30% 30% 10% #sciwebinar What is the right weighting? What is the right time period?
  • 28. Supply Chain Insights LLC Copyright © 2014, p. 28 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 Next Steps: Shaman’s Circle
  • 29. Consumer Packaged Goods
  • 30. Supply Chain Insights LLC Copyright © 2014, p. 30 Supply Chain Index: Consumer Products 2006-2012 #sciwebinar
  • 31. Supply Chain Insights LLC Copyright © 2014, p. 31 Colgate and P&G (2000-2012) Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012 2000 2012 2000 2012 4 5 6 7 0.10 0.15 0.20 0.25 InventoryTurns Operating Margin Colgate-Palmolive Company Procter & Gamble Company Best Scenario CL 0.21, 5.7 PG 0.18, 5.7 Average (Operating Margin, Inventory Turns)
  • 32. Supply Chain Insights LLC Copyright © 2014, p. 32 P&G and Unilever 2000-2012
  • 33. Supply Chain Insights LLC Copyright © 2014, p. 33 Supply Chain Index: Consumer Products 2009-2012 #sciwebinar
  • 34. Supply Chain Insights LLC Copyright © 2014, p. 34 • Beauty category gains ground. Heavier CPG products lose ground as the cost of transportation increases. • L’Oreal, Beiersdorf and Unilever improve. Colgate falls. Consumer Products Comparison
  • 35. Food and Beverage
  • 36. Supply Chain Insights LLC Copyright © 2014, p. 36 Supply Chain Index: Food and Beverage 2006-2012 #sciwebinar
  • 37. Supply Chain Insights LLC Copyright © 2014, p. 37 Campbell Soup and Hershey (2000-2013)
  • 38. Supply Chain Insights LLC Copyright © 2014, p. 38 General Mills and Kellogg’s 2000-2012
  • 39. Supply Chain Insights LLC Copyright © 2014, p. 39 Supply Chain Index: Food and Beverage 2009-2012 #sciwebinar
  • 40. Supply Chain Insights LLC Copyright © 2014, p. 40 • Nestle, Smuckers, PepsiCo, Inbev and Conagra make significant gains. • General Mills and Coca-Cola Enterprises fall. Food and Beverage Comparison
  • 41. Chemical
  • 42. Supply Chain Insights LLC Copyright © 2014, p. 42 Supply Chain Index: Chemical 2006-2012 #sciwebinar
  • 43. Supply Chain Insights LLC Copyright © 2014, p. 43 Inventory Turns vs. Operating Margin (2000-2012) Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012 2000 2012 2000 2012 3 4 5 6 7 8 0.00 0.10 0.20 0.30 InventoryTurns Operating Margin BASF SE E. I. du Pont de Nemours and Company Best Scenario BAS 0.10, 5.3 DD 0.10, 4.0 Average (Operating Margin, Inventory Turns)
  • 44. Supply Chain Insights LLC Copyright © 2014, p. 44 Supply Chain Index: Chemical 2009-2012 #sciwebinar
  • 45. Supply Chain Insights LLC Copyright © 2014, p. 45 • BASF and Dow Chemical move up the stack. • Dow improves post Rohm and Haas acquisition. • DuPont, FMC and Ecolab drop in the rankings. Insights on Chemical
  • 46. Supply Chain Insights LLC Copyright © 2014, p. 46 Agenda #sciwebinar
  • 47. Supply Chain Insights LLC Copyright © 2014, p. 47 Study Overview
  • 48. Supply Chain Insights LLC Copyright © 2014, p. 48 Definition Given to Respondents
  • 49. Supply Chain Insights LLC Copyright © 2014, p. 49 Who Uses the Technology
  • 50. Supply Chain Insights LLC Copyright © 2014, p. 50 Focus
  • 51. Supply Chain Insights LLC Copyright © 2014, p. 51 Frequency
  • 52. Supply Chain Insights LLC Copyright © 2014, p. 52 • Nine out of ten companies are stuck on the Effective Frontier. The project approach versus a clear operating strategy is detrimental. • Supply chain resiliency is improving. However, the lack of resiliency of contract manufacturing and 3PLs should be a risk concern for manufacturers. • The Index favors companies with a high ROIC. Companies that have increased complexity, lost margin and have not more fully utilized assets are penalized in the rankings. • Those the score higher on the Effective Frontier within a peer group are good at planning and network design. What Have We Learned? #sciwebinar
  • 53. Supply Chain Insights LLC Copyright © 2014, p. 53 Do we Have Best Practices? My Answer: I think that we have past practices that are evolving.
  • 54. #sciwebinar
  • 55. Supply Chain Insights LLC Copyright © 2014, p. 55 Annual Event
  • 56. Supply Chain Insights LLC Copyright © 2014, p. 56 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
  • 57. Supply Chain Insights LLC Copyright © 2014, p. 57 What’s Happening at Supply Chain Insights? www.supplychaininsights.com #sciwebinar
  • 58. Supply Chain Insights LLC Copyright © 2014, p. 58 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: lora.cecere@supplychaininsights.com • 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