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Presentation for Consumer Goods Technology

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Presentation given at Consumer Goods Technology on October 23rd

Presentation given at Consumer Goods Technology on October 23rd

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http://www.logistika.com.hr 1564
http://www.supplychainshaman.com 11
http://supplychaininsights.com 5
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    Presentation for Consumer Goods Technology Presentation for Consumer Goods Technology Presentation Transcript

    • Bricks Matter October 2012
    • BRICKS Book Publishes Matter December 2012 The Role of Supply Chains in Building Market-Driven Differentiation LORA M. CECERE CHARLES W. CHASE JR.
    • Right Use Expansion into Supply Chainof Assets BRIC Countries Process (Brazil, Russia, Knowledge India and China)
    • Three Lies and a Truth• Supply chain technology implementations have reduced inventory.• Companies should implement supply chain best practices.• Companies that have focused on collaboration in the supply chain have built competitive advantage.• Supply chain excellence matters. Supply Chain Insights LLC Copyright © 2012, p. 4
    • Average Days of Inventory by Year 250.0 200.0Days of Inventory 150.0 100.0 50.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Consumer Packaged Goods 59.0 57.0 62.0 64.0 67.0 67.0 68.0 70.0 70.0 64.0 64.0 67.0 Chemical 71.5 71.9 78.2 75.1 62.0 70.3 68.1 64.3 64.3 78.6 72.9 72.8 Pharma 122.2 133.7 190.1 171.0 184.3 175.6 167.8 149.8 154.9 198.7 154.3 131.8 High Tech 93.1 57.6 46.5 48.5 35.9 37.3 43.8 36.8 34.6 41.3 34.8 30.4 Average 86.5 80.0 94.2 89.6 87.3 87.5 86.9 80.2 81.0 95.6 81.5 75.5 Source: Supply Chain Insights 2012 Supply Chain Insights LLC Copyright © 2012, p. 5
    • Evolving Practices
    • Building End-to-End Value NetworksTrue collaboration only happens when there is asustaining win/win value proposition. Supply Chain Insights LLC Copyright © 2012, p. 8
    • Cash-to-Cash Cycle vs. Gross Margin (2000-2011) SUMMARY SLIDE Supply Chain Insights LLC Copyright © 2012, p. 10
    • 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. 11
    • Agenda Supply Chain Insights LLC Copyright © 2012, p. 12
    • 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. 13
    • 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. 14
    • Revenue Per Store Supply Chain Insights LLC Copyright © 2012, p. 15
    • Bar codes were first used at Marsh Supermarket in 1968 Supply Chain Insights LLC Copyright © 2012, p. 16
    • 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. 17
    • Mobile & Social Presence Growing Supply Chain Insights LLC Copyright © 2012, p. 18
    • “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. 19
    • 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. 20
    • 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. 21
    • Agenda Supply Chain Insights LLC Copyright © 2012, p. 22
    • A Look at History Supply Chain Insights LLC Copyright © 2012, p. 23
    • 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. 24
    • Rising Price of a Barrel of West Texas Intermediate (WTI) Supply Chain Insights LLC Copyright © 2012, p. 25
    • Ease of Getting Total Supply Chain Costs: Manufacturers, Retailers & Distributors USERS: Ease of Getting Total Supply Chain Costs Extremely/very easy 5 Neutral 3 Extremely/very difficultUsers 12% 12% 24% 24% 29% 24% EASY 53% DIFFICULT ___________________________________________________________ Source: Supply Chain Insights LLC, Transportation (Aug-Oct 2012) Base: Transportation Users (Manufacturers, Retailers and Distributors) (n=34) Q18. How easy is it for your company to get total supply chain costs for your operations? Supply Chain Insights LLC Copyright © 2012, p. 26
    • 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. 27
    • Agenda Supply Chain Insights LLC Copyright © 2012, p. 28
    • Supply Chain Management:Top 3 Elements of Pain for Respondent Supply Chain Insights LLC Copyright © 2012, p. 29
    • Evolution of Supply Chain Process ExcellenceAlign:MarketDriven Adapt: Demand Resilient Reliable Driven Right Product Efficient Absorb Demand Volatility Right Place Cost Right Time Procure to Absorb Supply pay/order to Volatility cash Right Cost Supply Chain Insights LLC Copyright © 2012, p. 30
    • Cash-to-Cash Cycle vs. Gross Margin (2000-2011) SUMMARY SLIDE Supply Chain Insights LLC Copyright © 2012, p. 31
    • 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 Absorb Sense Demand Demand Volatility Right Place Cost and Supply Right Time Procure to Shape Absorb Supply pay/order to Demand and Volatility cash Supply based Right Cost on Market Supply Chain Insights LLC Copyright © 2012, p. 32
    • 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. Supply Chain Insights LLC Copyright © 2012, p. 33
    • DefinitionsSupply Network: When the supply chain is extended to anetwork of trading partners, it is termed a supply network.Value Chain: When the emphasis of this extended supplychain shifts from cost to value, it is called a value chain.Value Network: When it becomes more strategic to thecompany, focused outside-in to drive value-based outcomes, itis termed a value network. Supply Chain Insights LLC Copyright © 2012, p. 34
    • A Supply Chain is a Complex System with Complex Processeswith Increasing Complexity
    • Looking at the Supply Chain as a Complex System Profitable Growth Revenue Cost of Goods Corporate Trade-offs Working Capital Corporate Social Responsibility Investment Trade-offs R&D Strategy and Investment Asset Strategy and Investment Forecast Accuracy Customer Service InventorySupply Chain Trade-offs Channel Strategy Product and Supplier Strategy Service Portfolio Sales Distribution Manufacturing Logistics ProcurementSupply Chain Policies Policies Policies Policies Policies Waste Returns Backorders First Pass Yield Empty Miles Material Yield
    • Useful RatiosGrowth Profitability Cycle ComplexityR&D Margin Cash on Hand C2C Cycle Altman Z Days of FinishedR&D to COGS Ratio Free Cash Flow Ratio Capital Turnover GoodsSGA Margin Gross Margin Days of Inventory Current Ratio Days of PayablesSGA/COGS Net Profit Quick Ratio OutstandingCOGS as Percent of Days of Raw Operating Margin Return on AssetsNet Sales Materials Days of Sales Pretax Margin (EBIT) Return on Equity Outstanding Days of Work in Return on Invested YoY Sales Growth Progress Capital Operating Margin DPO/DSO Return on Net Assets Inventory Turns Revenue/Employee Receivables Turns Cost of Sales Supply Chain Insights LLC Copyright © 2012, p. 37
    • What is Best in Class?• Performance better than peer group• Year-over-year improvements• Consistency in results• Leadership in managing trade-offs Supply Chain Insights LLC Copyright © 2012, p. 38
    • Corporate Summary Supply Chain Insights LLC Copyright © 2012, p. 39
    • Metrics Included for Comparison Supply Chain Insights LLC Copyright © 2012, p. 40
    • Cash-to-Cash Cycle vs. Gross Margin (2000-2003) Supply Chain Insights LLC Copyright © 2012, p. 41
    • Cash-to-Cash Cycle vs. Gross Margin (2004-2007) Supply Chain Insights LLC Copyright © 2012, p. 42
    • Cash-to-Cash Cycle vs. Gross Margin (2008-2011) Supply Chain Insights LLC Copyright © 2012, p. 43
    • Cash-to-Cash Cycle vs. Gross Margin (2000-2011) SUMMARY SLIDE Supply Chain Insights LLC Copyright © 2012, p. 44
    • Inventory Turns vs. Revenue per Employee (2002-2011) SUMMARY SLIDE Supply Chain Insights LLC Copyright © 2012, p. 45
    • 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. 46
    • Agenda Supply Chain Insights LLC Copyright © 2012, p. 47
    • 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. 48
    • 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. 49
    • 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. 50
    • 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. 51
    • Current State of Planning Supply Chain Insights LLC Copyright © 2012, p. 53
    • Future State of Planning Supply Chain Insights LLC Copyright © 2012, p. 54
    • Scenario Planning Supply Chain Insights LLC Copyright © 2012, p. 55
    • IT Trends Excited About (Top 3) Supply Chain Insights LLC Copyright © 2012, p. 56
    • DefinitionStructured • Transactional Challenges: Data • Time phased data • Social VolumeUnstructured • Channel Data • Customer Service • Warranty • Temperature Velocity Sensor • RFID Data • QR codes • GPS Variability New • Mapping and GPS • Video Data • Voice Types • Digital Images 57 Supply Chain Insights LLC Copyright © 2012, p. 57
    • Connecting the Extended Supply Chain 58 Supply Chain Insights LLC Copyright © 2012, p. 58
    • Connecting the Extended Supply Chain Supply Chain Insights LLC Copyright © 2012, p. 59
    • Opportunityat the Intersectionof the Social and Interest Graph(s) Supply Chain Insights LLC Copyright © 2012, p. 60
    • More than Just “Like” Supply Chain Insights LLC Copyright © 2012, p. 61
    • Newell Rubbermaid Gets IT! • Newell Rubbermaid#Future15SB @bwdumars Supply Chain Insights LLC Copyright © 2012, p. 62
    • Newell Rubbermaid Gets IT! #Future15SB @bwdumars Supply Chain Insights LLC Copyright © 2012, p. 63
    • Kellogg 2010“Kellogg’s cereal primarily in the U.S. due to anodor from waxy resins found in the packageliner. Total charges were $46 million with a$.09 impact on earnings per diluted share.” Kellogg Annual Report Supply Chain Insights LLC Copyright © 2012, p. 64
    • EDUCATESCI Research Supply Chain Index Ask a Supply Chain Wizard Supply Chain Wiki Blogs Videos, Webinars, and Share Your Own Podcasts Supply Chain Insights LLC Copyright © 2012, p. 66
    • ENRICHConsulting Technology NEW Supply Chain Insights LLC Copyright © 2012, p. 67
    • EVOLVE Job Postings EventsSalary Information Help Board NEW Supply Chain Insights LLC Copyright © 2012, p. 68
    • Agenda Supply Chain Insights LLC Copyright © 2012, p. 69
    • 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. 70 Supply Chain Insights LLC Copyright © 2012, p. 70
    • Where is Your Opportunity? Supply Chain Insights LLC Copyright © 2012, p. 71
    • 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. 72
    • Where Do You Find Lora? Contact Information: lora.cecere@supplychaininsights.com Blog: www.supplychainshaman.com (4000 pageviews/month) Twitter: lcecere 3350 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. 73