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Consumer Value Networks:
How Do You Measure UP?
The Supply Chain Index
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 2
Supply Chain Insights is focused on delivering
independent, actionable an...
Supply Chain Insights LLC Copyright © 2014, p. 3
Presenters
Abby Mayer
Research Associate
Lora Cecere
Founder and CEO
#sci...
Supply Chain Insights LLC Copyright © 2014, p. 4
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 5
To develop a methodology to help supply chain leaders define supply
chain...
Supply Chain Insights LLC Copyright © 2014, p. 6
Today’s Supply Chain
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 7
Supply Chain Risk
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 8
A Supply Chain
is a Complex System
with Complex
Processes
with Increasing...
Supply Chain Insights LLC Copyright © 2014, p. 9
 Resilient and predictable
 Balanced across the set of metrics
to maxim...
Supply Chain Insights LLC Copyright © 2014, p. 10
The Supply Chain Effective Frontier:
First Representation
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 11
While we like this framework, there is no good
source of consistent and ...
Supply Chain Insights LLC Copyright © 2014, p. 12
The Supply Chain Effective Frontier:
Second Representation
#sciwebinar
I...
Supply Chain Insights LLC Copyright © 2014, p. 13
Industry Overview: 2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 14
Intersection of Operating Margin and
Inventory Turns
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 15
Companies Get More Serious
With A Recession
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 16
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 17
Mining 20 Years of Financial Data
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 18
Correlations to Market Capitalization
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 19
How to Read an Orbit Chart
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 20
Supply Chain Metrics That Matter Reports
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 21
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 22
Supply Chain Metrics That Matter Reports
#sciwebinar
What is Resiliency?...
Supply Chain Insights LLC Copyright © 2014, p. 23
Resiliency 2000-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 24
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 25
Overall Ranking per Company
• Balance: Return on Invested Capital & Reve...
Supply Chain Insights LLC Copyright © 2014, p. 26
The Index Framework
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 27
Supply Chain Index
30% 30% 30% 10%
#sciwebinar
What is the right weighti...
Supply Chain Insights LLC Copyright © 2014, p. 28
An exclusive, invitation-only group
of senior supply chain leaders
(330 ...
Retail
Supply Chain Insights LLC Copyright © 2014, p. 30
Supply Chain Index: Retail
2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 31
Wal-Mart and Target
(2000-2012)
Source: Supply Chain Insights LLC, Corpo...
Supply Chain Insights LLC Copyright © 2014, p. 32
CVS and Walgreens
2000-2012
Supply Chain Insights LLC Copyright © 2014, p. 33
Retail Index:
2009-2012
Supply Chain Insights LLC Copyright © 2014, p. 34
• Drug channel rises.
• Kroger and Target make progress. Sainsbury and C...
Consumer Packaged Goods
Supply Chain Insights LLC Copyright © 2014, p. 36
Supply Chain Index: Consumer Products
2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 37
Colgate and P&G
(2000-2012)
Source: Supply Chain Insights LLC, Corporate...
Supply Chain Insights LLC Copyright © 2014, p. 38
P&G and Unilever
2000-2012
Supply Chain Insights LLC Copyright © 2014, p. 39
Supply Chain Index: Consumer Products
2009-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 40
• Beauty category gains ground. Heavier CPG products lose ground as
the ...
Food and Beverage
Supply Chain Insights LLC Copyright © 2014, p. 42
Supply Chain Index: Food and Beverage
2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 43
Campbell Soup and Hershey
(2000-2013)
Supply Chain Insights LLC Copyright © 2014, p. 44
General Mills and Kellogg’s
2000-2012
Supply Chain Insights LLC Copyright © 2014, p. 45
Supply Chain Index: Food and Beverage
2009-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 46
• Nestle, Smuckers, PepsiCo, Inbev and Conagra make significant
gains.
•...
Chemical
Supply Chain Insights LLC Copyright © 2014, p. 48
Supply Chain Index: Chemical
2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 49
Inventory Turns vs. Operating Margin
(2000-2012)
Source: Supply Chain In...
Supply Chain Insights LLC Copyright © 2014, p. 50
Supply Chain Index: Chemical
2009-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 51
• BASF and Dow Chemical move up the stack.
• Dow improves post Rohm and ...
Apparel
Supply Chain Insights LLC Copyright © 2014, p. 53
Supply Chain Index: Apparel
2006-2012
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 54
VF and Hanes Brands
Supply Chain Insights LLC Copyright © 2014, p. 55
Supply Chain Index: Apparel
2009-2012
Supply Chain Insights LLC Copyright © 2014, p. 56
• Hanes, Nike and Columbia Sportswear rise in the ranking. VF falls
due ...
Supply Chain Insights LLC Copyright © 2014, p. 57
• Retail: Dollar General and Kohl’s
• CPG: L’Oreal, Beiersdorf and Estee...
Supply Chain Insights LLC Copyright © 2014, p. 58
• Nine out of ten companies are stuck on the Effective Frontier. The
pro...
Supply Chain Insights LLC Copyright © 2014, p. 59
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 60
Next Steps
#sciwebinar
• Supply Chain Index Webinars
• July 17- Healthca...
#sciwebinar
Supply Chain Insights LLC Copyright © 2014, p. 62
Annual Event
Supply Chain Insights LLC Copyright © 2014, p. 63
Metrics That Matter
• Lora Cecere’s 2nd book:
Metrics That Matter
• To p...
Supply Chain Insights LLC Copyright © 2014, p. 64
What’s Happening at
Supply Chain Insights?
www.supplychaininsights.com
#...
Supply Chain Insights LLC Copyright © 2014, p. 65
About Lora Cecere
• Founder of Supply Chain Insights
• Invited to be a “...
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Supply chain index webinar june 11 final

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Supply Chain Index work for the periods of 2006-2012 and 2009-2012. In this deck, we share the background on the Supply Chain Index, and the performance of companies by industry on the Effective Frontier. The measurements used to evaluate balance, alignment and resiliency are year-over-year growth, Return on Invested Capital (ROIC), operating margin and inventory turns. The concept is that supply chain leaders need to drive year-over-year improvements that are balanced, aligned and reliable against their peer groups. The Supply Chain Index allows companies to compare themselves against tailored peer groups and over different time frames to understand how they are improving on the Effective Frontier of Supply Chain Performance.

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Transcript of "Supply chain index webinar june 11 final"

  1. 1. Consumer Value Networks: How Do You Measure UP? The Supply Chain Index #sciwebinar
  2. 2. Supply Chain Insights LLC Copyright © 2014, p. 2 Supply Chain Insights is focused on delivering independent, actionable and objective advice for supply chain leaders. A company dedicated to research, turn to us when you want the latest insights on supply chain trends, technologies to know and metrics that matter. About Us #sciwebinar
  3. 3. Supply Chain Insights LLC Copyright © 2014, p. 3 Presenters Abby Mayer Research Associate Lora Cecere Founder and CEO #sciwebinar Dr. George Runger Professor, CIDSE, ASU
  4. 4. Supply Chain Insights LLC Copyright © 2014, p. 4 Agenda #sciwebinar
  5. 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. 6. Supply Chain Insights LLC Copyright © 2014, p. 6 Today’s Supply Chain #sciwebinar
  7. 7. Supply Chain Insights LLC Copyright © 2014, p. 7 Supply Chain Risk #sciwebinar
  8. 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. 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. 10. Supply Chain Insights LLC Copyright © 2014, p. 10 The Supply Chain Effective Frontier: First Representation #sciwebinar
  11. 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. 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. 13. Supply Chain Insights LLC Copyright © 2014, p. 13 Industry Overview: 2006-2012 #sciwebinar
  14. 14. Supply Chain Insights LLC Copyright © 2014, p. 14 Intersection of Operating Margin and Inventory Turns #sciwebinar
  15. 15. Supply Chain Insights LLC Copyright © 2014, p. 15 Companies Get More Serious With A Recession #sciwebinar
  16. 16. Supply Chain Insights LLC Copyright © 2014, p. 16 Agenda #sciwebinar
  17. 17. Supply Chain Insights LLC Copyright © 2014, p. 17 Mining 20 Years of Financial Data #sciwebinar
  18. 18. Supply Chain Insights LLC Copyright © 2014, p. 18 Correlations to Market Capitalization #sciwebinar
  19. 19. Supply Chain Insights LLC Copyright © 2014, p. 19 How to Read an Orbit Chart #sciwebinar
  20. 20. Supply Chain Insights LLC Copyright © 2014, p. 20 Supply Chain Metrics That Matter Reports #sciwebinar
  21. 21. Supply Chain Insights LLC Copyright © 2014, p. 21 Agenda #sciwebinar
  22. 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. 23. Supply Chain Insights LLC Copyright © 2014, p. 23 Resiliency 2000-2012 #sciwebinar
  24. 24. Supply Chain Insights LLC Copyright © 2014, p. 24 Agenda #sciwebinar
  25. 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. 26. Supply Chain Insights LLC Copyright © 2014, p. 26 The Index Framework #sciwebinar
  27. 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. 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 Shaman’s Circle
  29. 29. Retail
  30. 30. Supply Chain Insights LLC Copyright © 2014, p. 30 Supply Chain Index: Retail 2006-2012 #sciwebinar
  31. 31. Supply Chain Insights LLC Copyright © 2014, p. 31 Wal-Mart and Target (2000-2012) Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012 2000 2012 2000 2012 5 6 7 8 9 10 0.05 0.06 0.07 0.08 InventoryTurns Operating Margin Target Corporation Wal-Mart Stores, Inc. Best Scenario TGT 0.06, 6.2 WMT 0.06, 7.8 Average (Operating Margin, Inventory Turns)
  32. 32. Supply Chain Insights LLC Copyright © 2014, p. 32 CVS and Walgreens 2000-2012
  33. 33. Supply Chain Insights LLC Copyright © 2014, p. 33 Retail Index: 2009-2012
  34. 34. Supply Chain Insights LLC Copyright © 2014, p. 34 • Drug channel rises. • Kroger and Target make progress. Sainsbury and Costco fall. Retail Summary
  35. 35. Consumer Packaged Goods
  36. 36. Supply Chain Insights LLC Copyright © 2014, p. 36 Supply Chain Index: Consumer Products 2006-2012 #sciwebinar
  37. 37. Supply Chain Insights LLC Copyright © 2014, p. 37 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)
  38. 38. Supply Chain Insights LLC Copyright © 2014, p. 38 P&G and Unilever 2000-2012
  39. 39. Supply Chain Insights LLC Copyright © 2014, p. 39 Supply Chain Index: Consumer Products 2009-2012 #sciwebinar
  40. 40. Supply Chain Insights LLC Copyright © 2014, p. 40 • 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
  41. 41. Food and Beverage
  42. 42. Supply Chain Insights LLC Copyright © 2014, p. 42 Supply Chain Index: Food and Beverage 2006-2012 #sciwebinar
  43. 43. Supply Chain Insights LLC Copyright © 2014, p. 43 Campbell Soup and Hershey (2000-2013)
  44. 44. Supply Chain Insights LLC Copyright © 2014, p. 44 General Mills and Kellogg’s 2000-2012
  45. 45. Supply Chain Insights LLC Copyright © 2014, p. 45 Supply Chain Index: Food and Beverage 2009-2012 #sciwebinar
  46. 46. Supply Chain Insights LLC Copyright © 2014, p. 46 • Nestle, Smuckers, PepsiCo, Inbev and Conagra make significant gains. • General Mills and Coca-Cola Enterprises fall. Food and Beverage Comparison
  47. 47. Chemical
  48. 48. Supply Chain Insights LLC Copyright © 2014, p. 48 Supply Chain Index: Chemical 2006-2012 #sciwebinar
  49. 49. Supply Chain Insights LLC Copyright © 2014, p. 49 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)
  50. 50. Supply Chain Insights LLC Copyright © 2014, p. 50 Supply Chain Index: Chemical 2009-2012 #sciwebinar
  51. 51. Supply Chain Insights LLC Copyright © 2014, p. 51 • 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
  52. 52. Apparel
  53. 53. Supply Chain Insights LLC Copyright © 2014, p. 53 Supply Chain Index: Apparel 2006-2012 #sciwebinar
  54. 54. Supply Chain Insights LLC Copyright © 2014, p. 54 VF and Hanes Brands
  55. 55. Supply Chain Insights LLC Copyright © 2014, p. 55 Supply Chain Index: Apparel 2009-2012
  56. 56. Supply Chain Insights LLC Copyright © 2014, p. 56 • Hanes, Nike and Columbia Sportswear rise in the ranking. VF falls due to M&A and coalition rationalization strategies. Insights on Apparel
  57. 57. Supply Chain Insights LLC Copyright © 2014, p. 57 • Retail: Dollar General and Kohl’s • CPG: L’Oreal, Beiersdorf and Estee Lauder • Food: Campbell’s, Hershey and Nestle • Chemical: Lanxess, Monsanto, and BASF • Apparel: Hanes, Columbia Sportswear and VF Our Winners Circle
  58. 58. Supply Chain Insights LLC Copyright © 2014, p. 58 • 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. What Have We Learned? #sciwebinar
  59. 59. Supply Chain Insights LLC Copyright © 2014, p. 59 Agenda #sciwebinar
  60. 60. Supply Chain Insights LLC Copyright © 2014, p. 60 Next Steps #sciwebinar • Supply Chain Index Webinars • July 17- Healthcare Value Network • August 12- Industrial Value Network • Monthly Research Reports • June 17- Consumer Value Network • July 22- Healthcare Value Network • August 19- Industrial Value Network • Final analysis of companies to be revealed at the 2014 Supply Chain Insights Global Summit
  61. 61. #sciwebinar
  62. 62. Supply Chain Insights LLC Copyright © 2014, p. 62 Annual Event
  63. 63. Supply Chain Insights LLC Copyright © 2014, p. 63 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
  64. 64. Supply Chain Insights LLC Copyright © 2014, p. 64 What’s Happening at Supply Chain Insights? www.supplychaininsights.com #sciwebinar
  65. 65. Supply Chain Insights LLC Copyright © 2014, p. 65 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
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