Supply Chainby the Numbers   September 2012
BRICKS                              Book                                  Publishes Matter                                ...
Evolving Practices              Supply Chain Insights LLC Copyright © 2012, p. 3
Agenda         Supply Chain Insights LLC Copyright © 2012, p. 4
Retail Shifts•   Power shifting to the shopper•   Amazon seizing “center store”•   Anytime, anywhere becoming the norm•   ...
Year-over-Year Growth   Years       1990-1994 1995-1999   2000-2004      2005-2009             2010-2012   RETAIL         ...
Retail: Revenue Per Employee                                                         Revenue per Employee                 ...
Revenue Per Store              Supply Chain Insights LLC Copyright © 2012, p. 8
Bar codes were first used at Marsh Supermarket in 1968                                   Supply Chain Insights LLC Copyrig...
Suppliers Still Do Not Know How to Use                  the Data     Weather Data      Market-survey Data        Contract ...
Mobile & Social Presence Growing                     Supply Chain Insights LLC Copyright © 2012, p. 11
“Where’s My Bud” Viral Campaign          Campaign         Objectives:Reduce Out of Stocks attargeted retailers by 5%      ...
Retailer Experience     New text message to     612-961-7802:     A customer at Denny     and Doug’s Liquor     Emporium h...
Here are some locations near you where you canfind Bud Light. Be sure to use this promotion codeto get your discount:ABBL1...
Agenda         Supply Chain Insights LLC Copyright © 2012, p. 15
A Look at History              Supply Chain Insights LLC Copyright © 2012, p. 16
Price VolatilityIn your best estimate, how much has commodity price volatility affected your EBITover the past 12 months? ...
Data Latency and Distortion              Retailer DC   Manufacturer DC             Suppliers Store                        ...
Building End-to-End Value NetworksToday True collaboration only happens when there is a sustaining win/win value propositi...
Supply Chain Insights LLC Copyright © 2012, p. 20
Collaboration: The Right Stuff  SHARED   VISION                 +    SKILLS   +   INCENTIVE   +   RESOURCES   +   PLAN   +...
Agenda         Supply Chain Insights LLC Copyright © 2012, p. 22
Evolution of Supply Chain Process                  ExcellenceAlign:                                 Continuous           B...
Supply Chain “Excellence”        Definition                 Supply Chain Insights LLC Copyright © 2012, p. 24
A Supply Chain   is a Complex System with Complex Processeswith Increasing Complexity                  Supply Chain Insigh...
The Effective Frontier                            Profitable Growth                  Revenue                    Cost of Go...
Corporate Summary           Supply Chain Insights LLC Copyright © 2012, p. 27
Metric Equations           Supply Chain Insights LLC Copyright © 2012, p. 28
Cash-to-Cash Cycle vs. Revenue per       Employee (2000-2011)                    Supply Chain Insights LLC Copyright © 201...
Days of Working Capital vs. Return on         Assets (2000-2011)                      Supply Chain Insights LLC Copyright ...
Corporate Summary           Supply Chain Insights LLC Copyright © 2012, p. 31
Metric Equations           Supply Chain Insights LLC Copyright © 2012, p. 32
Cash-to-Cash Cycle vs. Revenue per       Employee (2002-2011)                    Supply Chain Insights LLC Copyright © 201...
Cash-to-Cash Cycle vs. Gross     Margin (2000-2011)                   Supply Chain Insights LLC Copyright © 2012, p. 34
Value Network Strategy                                                       Business Strategy                           W...
Rethinking Manufacturing Strategies                                       Lean                Short Cycles                ...
Agenda         Supply Chain Insights LLC Copyright © 2012, p. 37
The Supply Chain of the Future            World          Population           North America                               ...
Supply Chain Tipping Points1987 1988     1989     1990      1991   1992   1993    1994    1995    1996     1997      1998 ...
Supply Chain Tipping Points 2000   2001   2002   2003   2004   2005   2006    2007    2008    2009      2010     2011     ...
What is a Market-driven Value Network? An adaptive network focused on a value-based outcome that senses and translatesmark...
Supply Chain 2020 Tipping Points   2013    2014     2015   2016      2017   2018   2019   2020   2021      2022     2023  ...
Supply Chain Insights LLC Copyright © 2012, p. 43
Current State of Planning                  Supply Chain Insights LLC Copyright © 2012, p. 44
Future State of Planning                 Supply Chain Insights LLC Copyright © 2012, p. 45
Scenario Planning             Supply Chain Insights LLC Copyright © 2012, p. 46
IT Trends Excited About (Top 3)                     Supply Chain Insights LLC Copyright © 2012, p. 47
Evolution of VisibilityValue Networks                                                                                  Val...
Connecting the Extended Supply Chain                                  49                     Supply Chain Insights LLC Cop...
Connecting the Extended Supply Chain                     Supply Chain Insights LLC Copyright © 2012, p. 50
Opportunityat the Intersectionof the Social and Interest Graph(s)                      Supply Chain Insights LLC Copyright...
Newell Rubbermaid Gets IT!                  • Newell Rubbermaid#Future15SB @bwdumars                                 Suppl...
Newell Rubbermaid Gets IT! #Future15SB @bwdumars                         Supply Chain Insights LLC Copyright © 2012, p. 53
Agenda         Supply Chain Insights LLC Copyright © 2012, p. 54
Historically, We Have…• Tried to get precise on inaccurate data.• Been sales-driven or marketing-driven not market-  drive...
Where is Your Opportunity?                  Supply Chain Insights LLC Copyright © 2012, p. 56
Who is Lora?• Founder of Supply Chain Insights• Partner at Altimeter Group (leader in open  research)• 7 years of Manageme...
Where Do You Find Lora? Contact Information: loracecere@gmail.com Blog: www.supplychainshaman.com (4000 pageviews/month) T...
Presentation at Logility Conference 2012
Upcoming SlideShare
Loading in...5
×

Presentation at Logility Conference 2012

562

Published on

Presentation given at the Logility conference in New Orleans on September 2012

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
562
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
24
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Presentation at Logility Conference 2012

  1. 1. Supply Chainby the Numbers September 2012
  2. 2. BRICKS Book Publishes Matter December 2012 The Role of Supply Chains in Building Market-Driven Differentiation LORA M. CECERE CHARLES W. CHASE JR.
  3. 3. Evolving Practices Supply Chain Insights LLC Copyright © 2012, p. 3
  4. 4. Agenda Supply Chain Insights LLC Copyright © 2012, p. 4
  5. 5. Retail Shifts• Power shifting to the shopper• Amazon seizing “center store”• Anytime, anywhere becoming the norm• More and more costs are being pushed backwards in the supply chain Supply Chain Insights LLC Copyright © 2012, p. 5
  6. 6. Year-over-Year Growth Years 1990-1994 1995-1999 2000-2004 2005-2009 2010-2012 RETAIL 17.05% 42.46% 12.89% 8.76% 5.15% AVERAGECPG AVERAGE 2.12% 0.84% 3.91% 7.26% 2.32% FOOD CPG 3.68% 2.97% 8.13% 2.59% 4.27% AVERAGEBEVERAGE CPG 12.87% 2.00% 9.59% 11.53% 4.92% AVERAGE Supply Chain Insights LLC Copyright © 2012, p. 6
  7. 7. Retail: Revenue Per Employee Revenue per Employee 1200 Revenue per Employee (K$) 1000 800 600 400 200 0 1990- 1995- 2000- 2005 2006 2007 2008 2009 2010 2011 2012 1994 1999 2004 eCommerce 343 456 549 758 848 1016 998 1073 Grocery 198 182 425 479 475 520 612 611 572 518 504 Mass 112 144 253 348 379 617 487 474 533 464 348 Specialty 296 384Source: Supply Chain Index Analysis from Annual Reports 1990-2012 414 458 479 527 534 282 312Mean values utilized excluding outlier data Supply Chain Insights LLC Copyright © 2012, p. 7
  8. 8. Revenue Per Store Supply Chain Insights LLC Copyright © 2012, p. 8
  9. 9. Bar codes were first used at Marsh Supermarket in 1968 Supply Chain Insights LLC Copyright © 2012, p. 9
  10. 10. Suppliers Still Do Not Know How to Use the Data Weather Data Market-survey Data Contract Data Retail Warehouse Withdrawal DataLoyalty DataSyndicated Data POS Data Panel Data Enrichment Data Social Data Distributor Data T-Log Data Ratings and Reviews Coupon Redemption Web Click-through Data Orders Shipments Returns Supply Chain Insights LLC Copyright © 2012, p. 10
  11. 11. Mobile & Social Presence Growing Supply Chain Insights LLC Copyright © 2012, p. 11
  12. 12. “Where’s My Bud” Viral Campaign Campaign Objectives:Reduce Out of Stocks attargeted retailers by 5% Increase Shopper satisfaction and brand loyalty Validation: Identify a key leader or market that wants to pilot. 50/50 shared risk in effort and resources to pursue. Keep costs to a minimum for Concept: pilot, under $75K Execute a viral campaign focused on leveraging shoppers to identify out of stocks and potentially pricing compliance issuesLeverage a combination ofconsumer, internet, and in-store technical capabilities Supply Chain Insights LLC Copyright © 2012, p. 12
  13. 13. Retailer Experience New text message to 612-961-7802: A customer at Denny and Doug’s Liquor Emporium has just snapped a tag. You’re out of stock on Bud Light. Please contact your wholesaler. Supply Chain Insights LLC Copyright © 2012, p. 13
  14. 14. Here are some locations near you where you canfind Bud Light. Be sure to use this promotion codeto get your discount:ABBL12456 Supply Chain Insights LLC Copyright © 2012, p. 14
  15. 15. Agenda Supply Chain Insights LLC Copyright © 2012, p. 15
  16. 16. A Look at History Supply Chain Insights LLC Copyright © 2012, p. 16
  17. 17. Price VolatilityIn your best estimate, how much has commodity price volatility affected your EBITover the past 12 months? What do you expect over the next 12 months?Decrease EBIT Increase Over past 24% 34% 18% 15% 9% 12 months Over next 17% 36% 23% 19% 5% 12 months Decrease Decrease Increase Increase No effect >50 basis pts <50 basis pts <50 basis pts >50 basis pts Percentage of Respondents Supply Chain Insights LLC Copyright © 2012, p. 17
  18. 18. Data Latency and Distortion Retailer DC Manufacturer DC Suppliers Store Demand Signal Accurate Almost WeeklyTrivial Easy Difficult Impossible Forecasting is ...Instant 3-10 Days 10-20 Days Delay from 20-50 Days 20-45 Days Purchase toVariable 7-20 Days 45-80 Days Signal Red Represents Emerging Economies with Distributor Trade Supply Chain Insights LLC Copyright © 2012, p. 18
  19. 19. Building End-to-End Value NetworksToday True collaboration only happens when there is a sustaining win/win value proposition. Supply Chain Insights LLC Copyright © 2012, p. 19
  20. 20. Supply Chain Insights LLC Copyright © 2012, p. 20
  21. 21. Collaboration: The Right Stuff SHARED VISION + SKILLS + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = CHANGE SKILLS + INCENTIVE + RESOURCES + PLAN = CONFUSION SHARED VISION + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = ANXIETY SHARED FALSE + SKILLS + INCENTIVE + RESOURCES + LEADERSHIP = VISION STARTS SHARED VISION + SKILLS + INCENTIVE + PLAN + LEADERSHIP = FRUSTRATION SHARED GRADUAL + SKILLS + RESOURCES + PLAN + LEADERSHIP = VISION CHANGESource: J.P. Kotter Supply Chain Insights LLC Copyright © 2012, p. 21
  22. 22. Agenda Supply Chain Insights LLC Copyright © 2012, p. 22
  23. 23. Evolution of Supply Chain Process ExcellenceAlign: Continuous Building Horizontal Testing OrchestrateMarket Process Connectors Learning Improving Demand and SupplyDriven In Market Adapt: Demand Resilient Reliable Driven Right Product Efficient Sense Demand Demand Volatility Cost Right Place and Supply Right Time Procure to Shape Supply pay/order to Demand and Volatility cash Supply based Right Cost on Market Supply Chain Insights LLC Copyright © 2012, p. 23
  24. 24. Supply Chain “Excellence” Definition Supply Chain Insights LLC Copyright © 2012, p. 24
  25. 25. A Supply Chain is a Complex System with Complex Processeswith Increasing Complexity Supply Chain Insights LLC Copyright © 2012, p. 25
  26. 26. The Effective Frontier Profitable Growth Revenue Cost of Goods Working Capital Corporate Social ResponsibilityR&D Strategy and Investment Asset Strategy and InvestmentForecast Accuracy Customer Service InventoryChannel Strategy Product and Supplier Strategy Service Portfolio Sales Distribution Manufacturing Logistics ProcurementPolicies Policies Policies Policies PoliciesReturns Backorders First Pass Yield Empty Miles Material Yield Supply Chain Insights LLC Copyright © 2012, p. 26
  27. 27. Corporate Summary Supply Chain Insights LLC Copyright © 2012, p. 27
  28. 28. Metric Equations Supply Chain Insights LLC Copyright © 2012, p. 28
  29. 29. Cash-to-Cash Cycle vs. Revenue per Employee (2000-2011) Supply Chain Insights LLC Copyright © 2012, p. 29
  30. 30. Days of Working Capital vs. Return on Assets (2000-2011) Supply Chain Insights LLC Copyright © 2012, p. 30
  31. 31. Corporate Summary Supply Chain Insights LLC Copyright © 2012, p. 31
  32. 32. Metric Equations Supply Chain Insights LLC Copyright © 2012, p. 32
  33. 33. Cash-to-Cash Cycle vs. Revenue per Employee (2002-2011) Supply Chain Insights LLC Copyright © 2012, p. 33
  34. 34. Cash-to-Cash Cycle vs. Gross Margin (2000-2011) Supply Chain Insights LLC Copyright © 2012, p. 34
  35. 35. Value Network Strategy Business Strategy What are the right things to do to increase company value? Value-network Supply Chain Strategy What are the right ways to support the business strategy? What are the right trade-offs between value drivers for each value network? Align demand Right product Design the Build Align supply Supply chain strategy relationships platforms supply organizational relationships response systems and manage talent Effective Supply Demand Networks Design Networks Continuous Networks Improvement Joint Value Creation Innovation Supply Chain Execution of buy- Strategies Methodologies Network Design Capabilities Required side strategies Business Process How do I do the right things right?Source: Supply Chain Insights, LLC Supply Chain Insights LLC Copyright © 2012, p. 35
  36. 36. Rethinking Manufacturing Strategies Lean Short Cycles HighVolume (Cases/Week) Outsource Manufacturing Theory of Lean for Make Constraints to Order (TOC) Low Low High Demand Capabilities Supply Chain Insights LLC Copyright © 2012, p. 36
  37. 37. Agenda Supply Chain Insights LLC Copyright © 2012, p. 37
  38. 38. The Supply Chain of the Future World Population North America Europe Asia 2007 2020 2007 2020 2007 2020 339M 342M 731M 722M 4.0B 4.6B L America 2007 2020 Africa Oceania 572M 660M 2007 2020 2007 2020 965M 1.3B 34M 40MSource: “The World at Six Billion” United Nations, 2004; The World UN Population Assessment 2006; “Unsustainable World,” 04/15/08, BBC MARCO TRENDS Supply Chain Insights LLC Copyright © 2012, p. 38
  39. 39. Supply Chain Tipping Points1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 JIT Supply Chain Internet/Email RFID Organization Evolution of eProcurement the PC Re-Engineering the Total Quality S&OP Organization Management Theory of Constraints (Michael Hammer)Supply Chain Excellence = Supply Chain Excellence = Islands of Manufacturing Vertical Silo Efficient Order to + + Excellence Excellence Excellence Cash Processes Inside-Out Inside-Out Supply Chain Insights LLC Copyright © 2012, p. 39
  40. 40. Supply Chain Tipping Points 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 .com Social Responsibility Y2K Demand Driven Concepts CSCO Lean Six Sigma Market-Driven Value NetworksSupply Chain Excellence = Supply Chain Excellence = Vertical Silo Outsourcing Value-Based Outcomes + Excellence Effectiveness Delivered by Horizontal Processes Inside-Out Outside-In Supply Chain Insights LLC Copyright © 2012, p. 40
  41. 41. What is a Market-driven Value Network? An adaptive network focused on a value-based outcome that senses and translatesmarket changes (buy and sell-side markets) bi-directionally with near-real time data latency to align sell, deliver, make and sourcing operations. 41 Supply Chain Insights LLC Copyright © 2012, p. 41
  42. 42. Supply Chain 2020 Tipping Points 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Orchestration Internet of Things TalentShortage Big Data Learning Supply Chains Supply Chains Compliance on Safe & Secure Digital Manufacturing Supply Chain Excellence = Value-Based Outcomes Delivered by Value Networks Outside-In Supply Chain Insights LLC Copyright © 2012, p. 42
  43. 43. Supply Chain Insights LLC Copyright © 2012, p. 43
  44. 44. Current State of Planning Supply Chain Insights LLC Copyright © 2012, p. 44
  45. 45. Future State of Planning Supply Chain Insights LLC Copyright © 2012, p. 45
  46. 46. Scenario Planning Supply Chain Insights LLC Copyright © 2012, p. 46
  47. 47. IT Trends Excited About (Top 3) Supply Chain Insights LLC Copyright © 2012, p. 47
  48. 48. Evolution of VisibilityValue Networks Value Network Sense/Act/Response Supply Chain Supply Chain Visualization Single Function Visibility Vertical Functions Where is My Stuff? Please Alert me of a Early Warning Learn a Better Way Track and Trace Problem Predictive Analytics Query Advanced Analytics Supply Chain Insights LLC Copyright © 2012, p. 48
  49. 49. Connecting the Extended Supply Chain 49 Supply Chain Insights LLC Copyright © 2012, p. 49
  50. 50. Connecting the Extended Supply Chain Supply Chain Insights LLC Copyright © 2012, p. 50
  51. 51. Opportunityat the Intersectionof the Social and Interest Graph(s) Supply Chain Insights LLC Copyright © 2012, p. 51
  52. 52. Newell Rubbermaid Gets IT! • Newell Rubbermaid#Future15SB @bwdumars Supply Chain Insights LLC Copyright © 2012, p. 52
  53. 53. Newell Rubbermaid Gets IT! #Future15SB @bwdumars Supply Chain Insights LLC Copyright © 2012, p. 53
  54. 54. Agenda Supply Chain Insights LLC Copyright © 2012, p. 54
  55. 55. Historically, We Have…• Tried to get precise on inaccurate data.• Been sales-driven or marketing-driven not market- driven• Believed that the most efficient supply chain is the most effective supply chain.• Built efficient chains, but not effective networks.• Focused inside-out, not outside-in.• Rewarded the urgent, not the important. 55 Supply Chain Insights LLC Copyright © 2012, p. 55
  56. 56. Where is Your Opportunity? Supply Chain Insights LLC Copyright © 2012, p. 56
  57. 57. Who is Lora?• Founder of Supply Chain Insights• 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. Supply Chain Insights LLC Copyright © 2012, p. 58
  58. 58. Where Do You Find Lora? Contact Information: loracecere@gmail.com Blog: www.supplychainshaman.com (4000 pageviews/month) Twitter: lcecere 3300 followers. Rated as the top rated supply chain social network user. LinkedIn: linkedin.com/pub/lora- cecere/0/196/573 (2300 in the network) Supply Chain Insights LLC Copyright © 2012, p. 59
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×