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Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
Supply Chain Insights Webinar on the Supply Chain Index on May 23rd
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Supply Chain Insights Webinar on the Supply Chain Index on May 23rd

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Second presentation on the Supply Chain Index. The Supply Chain Insights team is working on building formulaic representations of supply chain excellence by industry. This is a second in a series of …

Second presentation on the Supply Chain Index. The Supply Chain Insights team is working on building formulaic representations of supply chain excellence by industry. This is a second in a series of webinars where the team explains which metrics matter by industry.

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  • 1. Supply Chain Index Part IIHow & Why?May 23, 2013#sciwebinar
  • 2. Supply Chain Insights LLC Copyright © 2013, p. 2Supply Chain Insights is focused on deliveringindependent, actionable and objective advicefor supply chain leaders. A company dedicated toresearch, turn to us when you want the latestinsights on supply chain trends, technologies toknow and metrics that matter.About Us#sciwebinar
  • 3. Supply Chain Insights LLC Copyright © 2013, p. 3PresentersAbby MayerResearch AssociateLora CecereFounder and CEO#sciwebinar
  • 4. Supply Chain Insights LLC Copyright © 2013, p. 4This is the new bible for all supply chainexecutives. It provides an insider’sperspective that will prove incrediblyvaluable to even the most grizzled supplychain veteran. This is the next must-havebusiness book.--Bruce Richardson, Chief Enterprise Strategist,Salesforce.comToday, the worlds of social business andsupply chain management have manydegrees of separation. I enjoyed workingwith Lora to understand what the futuretransformation of digital marketing to digitalbusiness could look like.--Jeremiah Owyang, Research Director, AltimeterSecond Printing of Bricks Matter:15 Five-Star Reviews on Amazon#sciwebinarBook can be ordered: http://www.amazon.com/Bricks-Matter-Building-Market-Driven-Differentiation/dp/1118218310/ref=sr_1_1?ie=UTF8&qid=1369245253&sr=8-1&keywords=bricks+matter
  • 5. Supply Chain Insights LLC Copyright © 2013, p. 5Publishing Two eBooks in2013 on Metrics ThatMatter2013 Publications#sciwebinar
  • 6. Supply Chain Insights LLC Copyright © 2013, p. 618 Reports in 2012#sciwebinar
  • 7. Supply Chain Insights LLC Copyright © 2013, p. 7Over 30 Reports Planned for 2013#sciwebinar
  • 8. Supply Chain Insights LLC Copyright © 2013, p. 8Supply Chain Metrics That Matter ReadershipFocus of Report Date of Publication Readership (as of 5-21-2013)Retail August 2012 1,592Consumer Products September 2012 1,097Chemical Industry November 2012 693The Cash-to-Cash Cycle November 2012 1,823Pharmaceutical Industry December 2012 1,429Driving Reliability in Margins January 2013 1,298Hospitals January 2013 865Brick & Mortar Retail February 2013 545Medical Device Manufacturers February 2013 633Consumer Electronics April 2013 490Apparel May 2013 300Supply Chain Metrics That MatterReadership#sciwebinar
  • 9. Supply Chain Insights LLC Copyright © 2013, p. 9 What Is Best in Class? Understanding the Supply Chain as a ComplexSystem Which Companies Have Maximized MarketValuation Through Supply Chain Excellence? Using the InsightsAgenda#sciwebinar
  • 10. Supply Chain Insights LLC Copyright © 2013, p. 10 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 chainprocesses Balance. Leaders in managing trade-offsWhat Is Best in Class?#sciwebinar
  • 11. Supply Chain Insights LLC Copyright © 2013, p. 11 What Is Best in Class? Understanding the Supply Chain as aComplex System Which Companies Have Maximized MarketValuation Through Supply Chain Excellence? Using the InsightsAgenda#sciwebinar
  • 12. Supply Chain Insights LLC Copyright © 2013, p. 12What Is A Supply Chain?A Supply Chainis a Complex Systemwith ComplexProcesseswith IncreasingComplexity#sciwebinar
  • 13. Supply Chain Insights LLC Copyright © 2013, p. 13The Supply Chain Effective Frontier:First Representation#sciwebinar
  • 14. Supply Chain Insights LLC Copyright © 2013, p. 14Mining 20 Years of Financial DataFinancial MetricsGrowth Profitability Cycle ComplexityCommon Shares Cash Cash-to-Cash Cycle Altman ZEmployee Growth Cash Change in Period Days of Finished Goods Capital TurnoverEmployees Cash on Hand Days of Inventory Current RatioMarket Capitalization Cash Ratio TTM Days of Payables Outstanding Quick RatioR&D Margin Cash Ratio Quarter Days of Raw Materials Return on AssetsR&D Ratio Cash Ratio Year Days of Sales Outstanding Return on EquityR&D to COGS Ratio Cost of Goods Sold Days of Work in Progress Return on Invested CapitalRevenue EBITDA DPO/DSO Return on Net AssetsRevenue Growth Free Cash Flow Ratio Finished Goods Inventory Revenue per EmployeeRevenue Growth TTM Gross Margin Inventory Working Capital RatioRevenue TTM Gross Profit Inventory TurnsSG&A Margin Net Profit Margin Receivables TurnsSG&A Ratio Operating Cash Flow Ratio Raw Materials InventorySG&A to COGS Ratio Operating Margin Work in Progress InventoryOPEX RatioPretax Margin#sciwebinar
  • 15. Supply Chain Insights LLC Copyright © 2013, p. 15The Supply Chain Effective Frontier:Second Representation#sciwebinar
  • 16. Supply Chain Insights LLC Copyright © 2013, p. 16• Supply Chain Index: A formulaic representation ofsupply chain financial ratios correlated to stockmarket capitalization valuation.• Supply Chain Effective Frontier: The balance ofgrowth, profitability, cycle and complexity metrics todeliver the supply chain strategy. It may or may notmaximize the company’s market valuation.• Supply Chain Excellence: The behavior ofcompanies working to maximize value through thesetting of targets for supply chain financial ratios andaligning metrics that matter (tied to value chainstrategy).Definitions#sciwebinar
  • 17. Supply Chain Insights LLC Copyright © 2013, p. 17A Look at History: Progress in Productivity#sciwebinar
  • 18. Supply Chain Insights LLC Copyright © 2013, p. 18Cash-to-Cash Cycle vs. Gross Margin(2000-2011): Medical Device Industry#sciwebinar
  • 19. Supply Chain Insights LLC Copyright © 2013, p. 19Cash-to-Cash Cycle vs. Gross Margin(2000-2011): Pharmaceutical Industry#sciwebinar
  • 20. Supply Chain Insights LLC Copyright © 2013, p. 20Inventory Turns vs. Revenue perEmployee (2002-2011): Hospital Industry#sciwebinar
  • 21. Supply Chain Insights LLC Copyright © 2013, p. 21Cash-to-Cash Cycle vs. Gross Margin(2000-2011): Cross Industry Analysis#sciwebinar
  • 22. Supply Chain Insights LLC Copyright © 2013, p. 22Financial Metrics Across theHealthcare Value Chain (2000-2011)#sciwebinar
  • 23. Supply Chain Insights LLC Copyright © 2013, p. 23 What Is Best in Class? Understanding the Supply Chain as a ComplexSystem Which Companies Have Maximized MarketValuation Through Supply ChainExcellence? Using the InsightsAgenda#sciwebinar
  • 24. Supply Chain Insights LLC Copyright © 2013, p. 24Introducing theSupply Chain IndexA formulaic representation ofhow companies are trading offgrowth, profitability, cycle andcomplexity performance onselected supply chain financialmetrics against marketvaluation.#sciwebinar
  • 25. Supply Chain Insights LLC Copyright © 2013, p. 251. To better understand which supply chain metricsmatter to corporate balance sheet performance inpublic markets. We want to help leaders betteralign supply chain and financial performance.2. To create an objective system for evaluating andranking supply chains by industry peer group.3. To connect financial performance with supplychain excellence as measured throughquantitative surveys in an effort to better identifyand define best practices across industry groups.Why Did We Do This?#sciwebinar
  • 26. Supply Chain Insights LLC Copyright © 2013, p. 26• What it is: A way to understand the impact ofcompanies’ supply chain (relative to peers withinan industry sector) to market capitalization based aset of preselected supply chain ratio metrics.• What it is NOT: A way to evaluate overallcompany performance or compare the modelresults to actual market capitalization.What It Is. What It Is Not.#sciwebinar
  • 27. Supply Chain Insights LLC Copyright © 2013, p. 27• May 23rd: presentation of consumer value chainand healthcare value chain industries• June, July, August: release of results foradditional industries and discussion in SupplyChain Insights Community• Monthly Webinars (June 27, July 25, August 29)• Monthly Reports (June 11, July 9, August 13)• September 11-12th: 1st annual Global Summit withspeakers selected based on Index performanceNow and Then#sciwebinar
  • 28. Supply Chain Insights LLC Copyright © 2013, p. 28Selected 14 CoreSupply Chain Ratios to StudyFinancial MetricsGrowth Profitability Cycle ComplexityCommon Shares Cash Cash-to-Cash Cycle Altman ZEmployee Growth Cash Change in Period Days of Finished Goods Capital TurnoverEmployees Cash on Hand Days of Inventory Current RatioMarket Capitalization Cash Ratio TTM Days of Payables Outstanding Quick RatioR&D Margin Cash Ratio Quarter Days of Raw Materials Return on AssetsR&D Ratio Cash Ratio Year Days of Sales Outstanding Return on EquityR&D to COGS Ratio Cost of Goods Sold Days of Work in Progress Return on Invested CapitalRevenue EBITDA DPO/DSO Return on Net AssetsRevenue Growth Free Cash Flow Ratio Finished Goods Inventory Revenue per EmployeeRevenue Growth TTM Gross Margin Inventory Working Capital RatioRevenue TTM Gross Profit Inventory TurnsSG&A Margin Net Profit Margin Receivables TurnsSG&A Ratio Operating Cash Flow Ratio Raw Materials InventorySG&A to COGS Ratio Operating Margin Work in Progress InventoryOPEX RatioPretax MarginSource: Supply Chain Insights LLC#sciwebinarSelected Ratios
  • 29. Supply Chain Insights LLC Copyright © 2013, p. 29What is Altman Z?Source: Investopedia (http://www.investopedia.com/terms/a/altman.asp)#sciwebinar
  • 30. Supply Chain Insights LLC Copyright © 2013, p. 30Consumer Value ChainMetrics That Matter by IndustryRetail (Discount StoresHousehold & PersonalProductsChemicalOperating Margin Operating Margin Operating MarginWorking Capital Ratio Free Cash Flow Ratio Days of InventoryReturn on Invested Capital Return on Invested CapitalDays of PayablesOutstandingDPO/DSO Ratio Current Ratio Return on AssetsDays of Inventory SG&A to COGS RatioDays of PayablesOutstandingDays of Inventory#sciwebinar
  • 31. Supply Chain Insights LLC Copyright © 2013, p. 31Healthcare Peer Groups#sciwebinar
  • 32. Supply Chain Insights LLC Copyright © 2013, p. 32Pharmaceutical Value ChainMetrics That Matter by IndustryMedical CareMedicalDistributionPharmaceuticalMajorPharmaceuticalGenericFree Cash Flow Ratio Operating Margin Free Cash Flow Ratio Operating MarginWorking Capital RatioReturn on InvestedCapitalReturn on InvestedCapitalFree Cash Flow RatioOperating Margin Free Cash Flow Ratio Altman Z Working Capital RatioSG&A to COGS Ratio Working Capital Ratio Current Ratio DPO/DSO RatioYoY Revenue Growth Return on Net AssetsDays of PayablesOutstandingAltman ZCurrent Ratio DPO/DSO RatioReturn on InvestedCapitalDays of SalesOutstandingCurrent Ratio Current RatioDays of Inventory Days of Inventory SG&A to COGS RatioDays of PayablesOutstandingDays of SalesOutstandingDays of Inventory#sciwebinar
  • 33. Supply Chain Insights LLC Copyright © 2013, p. 33Medical Device Value ChainMetrics That Matter by IndustryMedical CareMedicalDistributionMedical DevicesMedicalInstruments &SuppliesFree Cash Flow Ratio Operating Margin Return on Assets DPO/DSO RatioWorking Capital RatioReturn on InvestedCapitalOperating Margin Altman ZOperating Margin Free Cash Flow Ratio Free Cash Flow RatioReturn on InvestedCapitalSG&A to COGS Ratio Working Capital Ratio DPO/DSO Ratio Free Cash Flow RatioYoY Revenue Growth Return on Net Assets Working Capital Ratio Working Capital RatioCurrent Ratio DPO/DSO Ratio Return on Net Assets YoY Revenue GrowthDays of SalesOutstandingCurrent Ratio YoY Revenue Growth SG&A to COGS RatioDays of Inventory Days of Inventory Altman Z Current RatioDays of PayablesOutstandingCurrent RatioDays of PayablesOutstandingDays of PayablesOutstandingDays of Inventory#sciwebinar
  • 34. Supply Chain Insights LLC Copyright © 2013, p. 34Medical Care EquationLn(market cap) = 6.24 + 16.33(FCF) + 10.34(WC) + 5.72(OM) –2.39(SGAC) + 1.09(YOY) – 1.01(CR) + 0.02(DSO) + 0.01(DOI) +0.01(DPO)Medical Care Equation#sciwebinar
  • 35. Supply Chain Insights LLC Copyright © 2013, p. 35Medical Care Ranking(2012)Medical Care Ranking (2012)Rank Company1 Fresenius Medical Care AG & Co. KGaA2 Community Health Systems3 DaVita HealthCare Partners Inc4 Health Management Associates, Inc.5 VCA Antech, Inc.6 Omnicare, Inc.7 Chemed Corporation8 Vanguard Health Systems, Inc.9 SunLink Health Systems, Inc.10 Cardionet IncSource: Supply Chain Insights LLCMorningstar peer group used as basis for equation included Acadia Healthcare Company Inc., Almost Family, Inc. Amedisys Inc., Amsurg Corp, GentivaHealth Services, Inc. Hanger Inc. HCA Holdings Inc. HEALTHSOUTH Corp, Healthways, Inc. IPC The Hospitalist Company Inc., LCA-Vision Inc., LHC Group,Inc., LifePoint Hospitals, Inc., Mednax Inc., Select Medical Holdings Corporation, Tenet Healthcare Corporation, The Providence Service Corporation, U.S.Physical Therapy, Inc., Universal Health Services, Inc. for which 2012 results were not available as of 5/9/2013.#sciwebinar
  • 36. Supply Chain Insights LLC Copyright © 2013, p. 36Medical Care Performance Ranking(2012)MedicalCareRanking (2012)Rank Company CR DOI DPO DSO FCF OM YOY SGAC WCEquationOutput1Fresenius MedicalCare AG & Co.KGaA1.77 41.19 29.62 81.97 0.097 0.157 0.102 0.272 0.1802 Community HealthSystems1.60 68.09 152.75 57.92 0.039 0.083 -0.044 0.138 0.0983 DaVita HealthCarePartners Inc1.43 5.11 27.10 63.37 0.067 0.158 0.216 0.161 0.1054HealthManagementAssociates, Inc.1.51 64.46 96.06 60.66 0.035 0.051 0.155 0.090 0.0855VCA Antech, Inc.1.31 14.18 10.86 12.01 0.094 0.058 0.144 0.094 0.034Source: Supply Chain Insights LLC, Corporate Annual Reports 2012 from One SourceRankings only include companies that had annual data available through One Source at time of calculation (May 2013).#sciwebinar
  • 37. Supply Chain Insights LLC Copyright © 2013, p. 37Medical Distribution EquationLn(market cap) = 6.04 + 33.39(OM) – 24.69(ROIC) +15.23(FCF) – 11.11(WC) + 1.49(RONA) + 1.37(DPODSO) +0.83(CR) + 0.02(DOI)Medical Distribution Equation#sciwebinar
  • 38. Supply Chain Insights LLC Copyright © 2013, p. 38Medical Distribution Ranking(2012)Medical Distribution Ranking (2012)Rank Company1 McKesson Corporation2 Cardinal Health, Inc.3 Henry Schein Inc.4 Patterson Companies Inc.5 Owens & Minor, Inc.6 MWI Veterinary Supply, Inc.Source: Supply Chain Insights LLCMorningstar peer group used as basis for equation included, AmerisourceBergen Corp., ALRTechnologies Inc. and Chindex International, Inc. for which 2012 results were not available asof 5/15/2013.#sciwebinar
  • 39. Supply Chain Insights LLC Copyright © 2013, p. 39Medical Distribution PerformanceRanking (2012)Medical Distribution Ranking (2012)Rank Company CR DOI DPODSO FCF OM ROIC RONA WCEquationOutput1 McKesson Corporation 1.09 31.66 1.91 0.021 0.017 0.065 0.474 0.0162 Cardinal Health, Inc. 1.24 27.86 1.85 0.008 0.017 0.074 0.210 0.0313 Henry Schein Inc. 1.84 68.10 0.78 0.040 0.069 0.116 0.259 0.1374Patterson CompaniesInc.2.65 49.08 0.45 0.082 0.101 0.131 0.200 0.2465 Owens & Minor, Inc. 1.76 34.92 1.09 0.020 0.022 0.089 0.122 0.079Source: Supply Chain Insights LLC, Corporate Annual Reports 2012 from One SourceRankings only include companies that had annual data available through One Source at time of calculation (May 2013).#sciwebinar
  • 40. Supply Chain Insights LLC Copyright © 2013, p. 40Drug Manufacturers:Major EquationLn(market cap) = 14.00 + 5.75(FCF) + 5.14(ROIC) – 4.02(AZ) –1.09(CR) – 0.003(DPO)Drug Manufacturers - Major Equation#sciwebinar
  • 41. Supply Chain Insights LLC Copyright © 2013, p. 41Drug Manufacturers:Generic EquationLn(market cap) = 8.21 + 2.39(OM) + 1.62(FCF) + 1.33(WC) –1.28(DPODSO) + 1.28(AZ) – 1.26(ROIC) – 0.49(CR) –0.24(SGAC) – 0.01(DSO) + 0.01(DOI)Drug Manufacturers - Generic Equation#sciwebinar
  • 42. Supply Chain Insights LLC Copyright © 2013, p. 42Medical Device EquationLn(market cap) = 5.19 – 5.84(ROA) + 5.17(OM) + 4.42(FCF) –3.68(DPODSO) + 2.76(WC) + 1.97(RONA) + 1.33(YOY) +1.21(AZ) – 0.29(CR) + 0.02(DPO)Medical Device Equation#sciwebinar
  • 43. Supply Chain Insights LLC Copyright © 2013, p. 43Medical Instruments & SuppliesEquationLn(market cap) = 9.74 – 2.97(DPODSO) – 2.00(AZ) +1.91(ROIC) + 1.25(FCF) + 0.90(WC) + 0.79(YOY) – 0.69(SGAC)– 0.30(CR) + 0.02(DPO) – 0.01(DOI)Medical Instruments & Supplies Equation#sciwebinar
  • 44. Supply Chain Insights LLC Copyright © 2013, p. 44 What Is Best in Class? Understanding Supply Chain as a ComplexSystem Which Companies Have Maximized MarketValuation Through Supply Chain Excellence? Using the InsightsAgenda#sciwebinar
  • 45. Supply Chain Insights LLC Copyright © 2013, p. 45Consumer Value ChainRetail(DiscountStores)Household& PersonalProductsChemicalEquations:Ln(market cap) =10.41+ 52.67(OM)-34.72(WC)- 16.02(ROIC)-0.09(DPODSO)+ 0.02(DOI)3.37+ 2.11(OM)+ 1.62(FCF)- 1.29(ROIC)- 1.17ln(CR)+ 0.25(SGAC)+ 0.02(DPO)– 0.01(DOI)7.85(OM)- 4.84(ROA)+ 1.81ln(DPO)+ 0.01(DOI)True collaboration only happens when there isa sustaining win-win value proposition.#sciwebinar
  • 46. Supply Chain Insights LLC Copyright © 2013, p. 46Pharmaceutical Value ChainMedicalCareMedicalDistributionDrugManufacturers- MajorEquations:Ln(market cap) =6.24+ 16.33(FCF)+ 10.34(WC)+ 5.72(OM)- 2.39(SGAC)+ 1.09(YOY)- 1.01(CR)+ 0.02(DSO)+ 0.01(DOI)+ 0.01(DPO)6.04+ 33.39(OM)- 24.69(ROIC)+ 15.23(FCF)- 11.11(WC)+ 1.49(RONA)+ 1.37(DPODSO)+ 0.83(CR)+ 0.02(DOI)14.00+ 5.75(FCF)+ 5.14(ROIC)- 4.02(AZ)- 1.09(CR)- 0.003(DPO)True collaboration only happens when there isa sustaining win-win value proposition.8.21+ 2.39(OM)+ 1.62(FCF)+ 1.33(WC)- 1.28(DPODSO)+ 1.28(AZ)- 1.26(ROIC)- 0.49(CR)- 0.24(SGAC)- 0.01(DSO)+ 0.01(DOI)#sciwebinarDrugManufacturers-GenericMajor Generic
  • 47. Supply Chain Insights LLC Copyright © 2013, p. 47Medical Device Value ChainMedicalCareMedicalDistributionMedicalDevicesEquations:Ln(market cap) =6.24+ 16.33(FCF)+ 10.34(WC)+ 5.72(OM)- 2.39(SGAC)+ 1.09(YOY)- 1.01(CR)+ 0.02(DSO)+ 0.01(DOI)+ 0.01(DPO)6.04+ 33.39(OM)- 24.69(ROIC)+ 15.23(FCF)- 11.11(WC)+ 1.49(RONA)+ 1.37(DPODSO)+ 0.83(CR)+ 0.02(DOI)5.19- 5.84(ROA)+ 5.17(OM)+ 4.42(FCF)- 3.68(DPODSO)+ 2.76(WC)+ 1.97(RONA)+ 1.33(YOY)+ 1.21(AZ)- 0.29(CR)+ 0.02(DPO)True collaboration only happens when there isa sustaining win-win value proposition.9.74- 2.97(DPODSO)- 2.00(AZ)+ 1.91(ROIC)+ 1.25(FCF)+ 0.90(WC)+ 0.79(YOY)- 0.69(SGAC)- 0.30(CR)+ 0.02(DPO)- 0.01(DOI)MedicalInstruments& Supplies#sciwebinarMedicalDevicesMedicalInstruments& Supplies
  • 48. Supply Chain Insights LLC Copyright © 2013, p. 48Step 1: Located data sourcesStep 2: Selected core supply chain ratios from over 50 financial metricsStep 3: Identified meaningful metrics per industry using regression analysisamong selected ratiosStep 4: Constructed industry equation based on correlation of industrymetrics to market capitalization valuesStep 5: Determined company rankings within industry by applying 2012company results to industry equationStep 6: Analyze peer group companies over the last decadeStep 7: Correlate Supply Chain Index findings to supply chain practices,technologies and organizational designOur Next Steps:Supply Chain Index Methodology#sciwebinar
  • 49. Supply Chain Insights LLC Copyright © 2013, p. 49• What drives value in each industry is different.• Financial markets reward supply chain balanceand alignment.• The supply chain is a complex system. Supplychain excellence must be carefully defined.• Relationships should be built upon cross-industrydefinitions of value to create win-winrelationships.• There is no substitute for leadership.• Supply chain excellence matters.Summary#sciwebinar
  • 50. Supply Chain Insights LLC Copyright © 2013, p. 501. Join the Supply Chain Index Group in the SupplyChain Insights Community for Peer Review andDiscussion: www.scicommunity.com2. Gain Insights from Supply Chain Leaders at theGlobal Summit www.supplychaininsightsglobalsummit.com3. Build the Next Generation of Supply ChainResearch Using the Index4. Leverage the Index to Connect Supply ChainProcesses, People and Technology Decisions toBalance Sheet ResultsWhat You Can Do#sciwebinar
  • 51. Supply Chain Insights LLC Copyright © 2013, p. 51Join Us!www.supplychaininsightsglobalsummit.com#sciwebinar
  • 52. Supply Chain Insights LLC Copyright © 2013, p. 52PAST SUPPLY CHAIN INDEX WEBINARS:AVAILABLE ON DEMAND• From September 24, 2012:The Supply Chain Index, 20 Years in the Making:A Focus on Process Industries• From October 26, 2012:The Supply Chain Index, 20 Years in the Making:A Focus on Discrete Industries• From April 25, 2012:Launch of the Supply Chain IndexWebinarswww.supplychaininsights.com/upcoming-webinars#sciwebinarUPCOMING WEBINARS• June 13th: Sales and Operations Planning: Stateof the Union• June 27th: Supply Chain Index Part III,Apparel/Food & Beverage• July 11th: Big Insights From Big Data SupplyChains• July 25th: Supply Chain Index Part IV, ConsumerElectronics & Technology
  • 53. Supply Chain Insights LLC Copyright © 2013, p. 53Supply Chain Insights Community#sciwebinar
  • 54. Supply Chain Insights LLC Copyright © 2013, p. 54Who Is Lora?• Founder of Supply Chain Insights• Partner at Altimeter Group (leader in openresearch)• 7 years of Management Experience leadingAnalyst Teams at Gartner and AMR Research• 8 years Experience in Marketing and SellingSupply Chain Software at Descartes SystemsGroup and Manugistics (now JDA)• 15 Years Leading teams in Manufacturing andDistribution operations for Clorox, Kraft/GeneralFoods, Nestle/Dreyers Grand Ice Cream andProcter & Gamble.#sciwebinar
  • 55. Supply Chain Insights LLC Copyright © 2013, p. 55Where Do You Find Lora?Contact Information:lora.cecere@supplychaininsights.comBlog: www.supplychainshaman.com(4000 pageviews/month)Twitter: lcecere 3850 followers. Rated as a toprated supply chain social network user.LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (3750 in the network)#sciwebinar
  • 56. Supply Chain Insights LLC Copyright © 2013, p. 56Where Do You Find Abby?#sciwebinarContact Information:abby.mayer@supplychaininsights.comBlog: www.supplychainindex.com(2600 pageviews/month)Twitter: @indexgirlLinkedIn: www.linkedin.com/pub/abby-mayer/40/941/972

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