supply chain index june10

The Supply Chain IndexSupply Chain Improvement for 2006-2012

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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

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Agenda

Vision

History of Our Work

Resiliency Patterns and Mathematical Calculation

Why It Matters To You

What's Next?

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A Supply Chain is a Complex System

with Complex Processes

with Increasing Complexity

Our Belief

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Resilient and predictable

Balanced across the set of metrics to maximize value

Showing year-over-year strength against peer group

Desired Corporate Performance

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The Supply Chain Effective Frontier:First Representation

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While we like this Framework. There is no good source of consistent and accurate data for:

– Forecast Accuracy– Case Fill Rate– Corporate Social Responsibility

Our Problem with this Framework

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The Supply Chain Effective Frontier: Second Representation

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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.

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Industry Overview

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Industry Progress at the Intersection of Operating Margin and Inventory Turns

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Companies Get More Serious with A Recession

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Today’s Supply Chain

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A Business Continuity Risk

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Agenda

Vision

History of Our Work

Resiliency Patterns and Mathematical Calculation

Supply Chain Index

What's Next?

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Mining 20 Years of Financial Data

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Correlations to Market Capitalization

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How to Read an Orbit Chart

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Supply Chain Metrics That Matter Reports

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Agenda

Vision

History of Our Work

Resiliency Patterns and Mathematical Calculation

Supply Chain Index

What's Next?

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Supply Chain Metrics That Matter Reports

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Definition of Resiliency: Tightness of the Pattern on the Orbit Chart for Operating Margin and Inventory Turns

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Industry Resiliency: 2000-2012

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Resiliency: 2000-2012

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Agenda

Vision

History of Our Work

Resiliency Patterns and Mathematical Calculation

Supply Chain Index

What's Next?

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Supply Chain Insights LLC Copyright © 2014, p. 24

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 IndexA 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

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The Index Framework

Supply Chain Index: 2006-2012

30% 30% 30% 10%

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A Supply Chain is a Complex System

with Complex Processes

with Increasing Complexity

Review of 2006-2012

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Supply Chain Index: Food and Beverage

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Supply Chain Index: Pharmaceuticals

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Supply Chain Index: Retail

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Supply Chain Index: Consumer Products

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Supply Chain Index: Automotive

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Supply Chain Index: Automotive Suppliers

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Supply Chain Index: Semiconductor Industries

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Supply Chain Index: Next Steps

Date Release

May 13Supply Chain Index Report:Strength, Balance and Resiliency

May 19Supply Chain Index Webinar Part II:Improving Strength, Balance and Resiliency

June 172 Consumer Value Chain Report

July 17 Healthcare Value Chain Report

Aug 19 Industrial Value Chain Report

Sept 10-11Final results (including peer evaluations) to be presented at the Supply Chain Insights Global Summit

• NOTE: Supply Chain Index results will be released one industry at a time for the first 3 components (strength, balance and resiliency). Peer evaluations will be added later.

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• Nine out of ten companies are stuck on the Effective Frontier. The project approach versus a clear operating strategy was detrimental.

• Supply chain resiliency is improving. However, the lack of resiliency of contract manufacturing and 3PLs should be a risk concern for manufacturers.

• Large companies, that were early adopters, made great progress at the beginning of the decade, but progress has slowed. The Supply Chain Index shows that their progress has been eclipsed by late followers.

What Have I Learned?

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1. Supply Chain Improvement: Finalize Strength & Balance comparison for 2000-2012, 2006-2012, and 2009-2012

2. Supply Chain Index Reports of Value Networks through the Summer

– Consumer Value Networks on June 17

– Healthcare Value Networks on July 22

– Industrial Value Networks on August 19

3. Final analysis of companies to be revealed at the 2014 Supply Chain Insights Global Summit

Next Steps

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Questions?

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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:

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What’s Happening at Supply Chain Insights?

www.supplychaininsights.com

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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)

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