Supply Chain Index Webinar May 19, 2014

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Sometimes, as a supply chain leader, it is hard to know if you are making progress. We want to help. Supply chain excellence should not be a beauty contest. It needs to be about real results. We …

Sometimes, as a supply chain leader, it is hard to know if you are making progress. We want to help. Supply chain excellence should not be a beauty contest. It needs to be about real results. We believe that a company needs to be compared within an industry. We also think that there needs to be an objective measurement that is available to all companies independent of size. Listen to the webinar to understand the methodology.
The Supply Chain Index will rank all public companies by industry NAICS codes and compare their progress for the period of 2006-2013 on:

Strength: Progress at the intersection of Growth/ROIC and Inventory Turns/Operating Margin (30%)
Balance: The ability to manage a balanced portfolio to maximize growth and ROIC
Resiliency: The tightness of the pattern at the intersection of inventory turns and operating margin (30%)
Peer Ranking: Input from Supply Chain Peers(10%)
It is being launched on May 13, 2014. The webinar is on May 19, 2014.
Each industry will be ranked on the strength, balance and resiliency. The final scores and then the total score will be the composite of these. The formula is:
Supply Chain Index= .33(Strength Ranking)+.33(Balance Ranking)+.33(Resiliency Ranking)+.10(Peer Ranking)

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  • 1. The Supply Chain Index Webinar May 19, 2014 #sciwebinar
  • 2. Supply Chain Insights LLC Copyright © 2013, 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. Supply Chain Insights LLC Copyright © 2013, p. 3 Presenters Abby Mayer Research Associate Lora Cecere Founder and CEO #sciwebinar Dr. George Runger Professor, CIDSE, ASU
  • 4. Supply Chain Insights LLC Copyright © 2013, p. 4 Agenda #sciwebinar
  • 5. Supply Chain Insights LLC Copyright © 2013, p. 5 A Supply Chain is a Complex System with Complex Processes with Increasing Complexity Our Belief #sciwebinar
  • 6. Supply Chain Insights LLC Copyright © 2013, p. 6  Perform better than peer group  Improve year-over-year results  Align internally on metrics  Deliver against the business strategy  Demonstrate consistency in results  Use innovation in supply chain processes  Balance. Be leaders in managing trade-offs Our Point of View: Definition of Supply Chain Excellence #sciwebinar
  • 7. Supply Chain Insights LLC Copyright © 2013, p. 7  Resilient and predictable  Balanced across the set of metrics to maximize value  Showing year-over-year strength against peer group Desired Corporate Performance #sciwebinar
  • 8. Supply Chain Insights LLC Copyright © 2013, p. 8 The Supply Chain Effective Frontier: First Representation #sciwebinar
  • 9. Supply Chain Insights LLC Copyright © 2013, p. 9 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.
  • 10. Supply Chain Insights LLC Copyright © 2013, p. 10 Supply Chain Finance Is a Barrier for Most #sciwebinar
  • 11. Supply Chain Insights LLC Copyright © 2013, p. 11 Today’s Supply Chain #sciwebinar
  • 12. Supply Chain Insights LLC Copyright © 2013, p. 12 A Business Continuity Risk #sciwebinar
  • 13. Supply Chain Insights LLC Copyright © 2013, p. 13 Overall Ranking per Company • Strength: Inventory Turns & Operating Margin Vector Trajectory (30%) • Balance: Return on Invested Capital & Revenue Growth 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: strength, balance, resiliency and peer rankings. Supply Chain Index #sciwebinar
  • 14. Supply Chain Insights LLC Copyright © 2013, p. 14 Supply Chain Index Calculation For the period of 2006-2012 #sciwebinar
  • 15. Supply Chain Insights LLC Copyright © 2013, p. 15 Agenda #sciwebinar
  • 16. Supply Chain Insights LLC Copyright © 2013, p. 16 Mining 20 Years of Financial Data #sciwebinar
  • 17. Supply Chain Insights LLC Copyright © 2013, p. 17 How to Read an Orbit Chart #sciwebinar
  • 18. Supply Chain Insights LLC Copyright © 2013, p. 18 Available at www.supplychaininsights.com/report- archives Supply Chain Metrics That Matter Reports #sciwebinar * Reports look at industry performance of a small peer group on growth, profitability, cycle and complexity metrics * Includes cross industry analysis of cash-to-cash cycle, operating margin and resiliency *19 reports to date
  • 19. Supply Chain Insights LLC Copyright © 2013, p. 19 Supply Chain Metrics That Matter Reports #sciwebinar
  • 20. Supply Chain Insights LLC Copyright © 2013, p. 20 Agenda #sciwebinar
  • 21. Supply Chain Insights LLC Copyright © 2013, p. 21 Strength, Balance and Resiliency #sciwebinar 30% Inventory Turns & Operating Margin Trajectory 30% Return on Invested Capital & Revenue Growth Trajectory 30% Inventory Turns & Operating Margin Mean Distance Strength Balance Resiliency
  • 22. Supply Chain Insights LLC Copyright © 2013, p. 22 Resiliency by Industry #sciwebinar
  • 23. Supply Chain Insights LLC Copyright © 2013, p. 23 Results for Chemical Industry #sciwebinar
  • 24. Supply Chain Insights LLC Copyright © 2013, p. 24 Chemical Industry Orbit Chart #sciwebinar
  • 25. Supply Chain Insights LLC Copyright © 2013, p. 25 Chemical Industry Orbit Chart #sciwebinar
  • 26. Supply Chain Insights LLC Copyright © 2013, p. 26 Results for Consumer Packaged Goods Industry #sciwebinar
  • 27. Supply Chain Insights LLC Copyright © 2013, p. 27 Consumer Packaged Goods Industry Orbit Chart #sciwebinar
  • 28. Supply Chain Insights LLC Copyright © 2013, p. 28 Consumer Packaged Goods Industry Orbit Chart #sciwebinar
  • 29. Supply Chain Insights LLC Copyright © 2013, p. 29 Results for Pharmaceutical Industry #sciwebinar
  • 30. Supply Chain Insights LLC Copyright © 2013, p. 30 Pharmaceutical Industry Orbit Chart #sciwebinar
  • 31. Supply Chain Insights LLC Copyright © 2013, p. 31 Pharmaceutical Industry Orbit Chart #sciwebinar
  • 32. Supply Chain Insights LLC Copyright © 2013, p. 32 Agenda #sciwebinar
  • 33. Supply Chain Insights LLC Copyright © 2013, p. 33 Why It Matters Company Average Operating Margin Average Inventory Turns Average Days of Payables Resiliency Ranking BASF SE 0.10 5.3 39 .0.55 E. I. du Pont de Nemours and Co. 0.10 4.0 56 .0.67 Company Average Operating Margin Average Inventory Turns Average Days of Payables Resiliency Ranking Samsung Electronics Co., Ltd. 0.11 8.3 35 0.59 LG Electronics Inc. 0.04 6.7 49 1.13 Company Average Operating Margin Average Inventory Turns Average Days of Payables Resiliency Ranking Procter & Gamble Co. 0.18 5.6 55 0.52 Unilever N.V. 0.13 5.3 93 0.74 #sciwebinar
  • 34. Supply Chain Insights LLC Copyright © 2013, p. 34 • Supply Chain Index: Improving Strength, Balance and Resiliency • Our May 2014 research report examines the three industries and the methodology in great detail. • Find it here: www.supplychaininsights.com/the- supply-chain-index Index Research Report #sciwebinar
  • 35. Supply Chain Insights LLC Copyright © 2013, p. 35 • Read the report • Benchmark against peers. • Improve reliability of inventory turns & operating margin performance. • Understand that industries with high variability pose risk to your supply chain. • Measure progress in centimeters, not kilometers. What Can You Do? #sciwebinar
  • 36. Supply Chain Insights LLC Copyright © 2013, p. 36 Agenda #sciwebinar
  • 37. Supply Chain Insights LLC Copyright © 2013, p. 37 1. Consumer, Healthcare and Industrial Value Network reports through the summer 2. Final analysis of companies to be revealed at the 2014 Supply Chain Insights Global Summit Next Steps #sciwebinar
  • 38. Supply Chain Insights LLC Copyright © 2013, p. 38 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
  • 39. Supply Chain Insights LLC Copyright © 2013, p. 39 What’s Happening at Supply Chain Insights? www.supplychaininsights.com #sciwebinar
  • 40. Supply Chain Insights LLC Copyright © 2013, p. 40 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
  • 41. #sciwebinar