supply chain insights webinar on the supply chain index on may 23rd
DESCRIPTION
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.TRANSCRIPT
Supply Chain Index Part IIHow & Why?
May 23, 2013
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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
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Supply Chain Insights LLC Copyright © 2013, p. 3
Presenters
Abby MayerResearch Associate
Lora CecereFounder and CEO
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Supply Chain Insights LLC Copyright © 2013, p. 4
This is the new bible for all supply chain executives. It provides an insider’s perspective that will prove incredibly valuable to even the most grizzled supply chain veteran. This is the next must-have business book.
--Bruce Richardson, Chief Enterprise Strategist, Salesforce.com
Today, the worlds of social business and supply chain management have many degrees of separation. I enjoyed working with Lora to understand what the future transformation of digital marketing to digital business could look like.
--Jeremiah Owyang, Research Director, Altimeter
Second Printing of Bricks Matter: 15 Five-Star Reviews on Amazon
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Book 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
Supply Chain Insights LLC Copyright © 2013, p. 5
Publishing Two eBooks in 2013 on Metrics That Matter
2013 Publications
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Supply Chain Insights LLC Copyright © 2013, p. 6
18 Reports in 2012
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Supply Chain Insights LLC Copyright © 2013, p. 7
Over 30 Reports Planned for 2013
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Supply Chain Insights LLC Copyright © 2013, p. 8
Supply Chain Metrics That Matter Readership
Focus of Report Date of Publication Readership (as of 5-21-2013)
Retail August 2012 1,592
Consumer Products September 2012 1,097
Chemical Industry November 2012 693
The Cash-to-Cash Cycle November 2012 1,823
Pharmaceutical Industry December 2012 1,429
Driving Reliability in Margins January 2013 1,298
Hospitals January 2013 865
Brick & Mortar Retail February 2013 545
Medical Device Manufacturers February 2013 633
Consumer Electronics April 2013 490
Apparel May 2013 300
Supply Chain Metrics That Matter Readership
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Supply Chain Insights LLC Copyright © 2013, p. 9
What Is Best in Class?
Understanding the Supply Chain as a Complex System
Which Companies Have Maximized Market Valuation Through Supply Chain Excellence?
Using the Insights
Agenda
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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 chain processes
Balance. Leaders in managing trade-offs
What Is Best in Class?
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Supply Chain Insights LLC Copyright © 2013, p. 11
What Is Best in Class?
Understanding the Supply Chain as a Complex System
Which Companies Have Maximized Market Valuation Through Supply Chain Excellence?
Using the Insights
Agenda
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Supply Chain Insights LLC Copyright © 2013, p. 12
What Is A Supply Chain?
A Supply Chain is a Complex System
with Complex Processes
with Increasing Complexity
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Supply Chain Insights LLC Copyright © 2013, p. 13
The Supply Chain Effective Frontier:First Representation
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Supply Chain Insights LLC Copyright © 2013, p. 14
Mining 20 Years of Financial Data
Financial Metrics
Growth Profitability Cycle ComplexityCommon Shares Cash Cash-to-Cash Cycle Altman Z
Employee Growth Cash Change in Period Days of Finished Goods Capital Turnover
Employees Cash on Hand Days of Inventory Current Ratio
Market Capitalization Cash Ratio TTM Days of Payables Outstanding Quick Ratio
R&D Margin Cash Ratio Quarter Days of Raw Materials Return on Assets
R&D Ratio Cash Ratio Year Days of Sales Outstanding Return on Equity
R&D to COGS Ratio Cost of Goods Sold Days of Work in Progress Return on Invested Capital
Revenue EBITDA DPO/DSO Return on Net Assets
Revenue Growth Free Cash Flow Ratio Finished Goods Inventory Revenue per Employee
Revenue Growth TTM Gross Margin Inventory Working Capital Ratio
Revenue TTM Gross Profit Inventory Turns
SG&A Margin Net Profit Margin Receivables Turns
SG&A Ratio Operating Cash Flow Ratio Raw Materials Inventory
SG&A to COGS Ratio Operating Margin Work in Progress Inventory
OPEX Ratio
Pretax Margin
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Supply Chain Insights LLC Copyright © 2013, p. 15
The Supply Chain Effective Frontier: Second Representation
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Supply Chain Insights LLC Copyright © 2013, p. 16
• Supply Chain Index: A formulaic representation of supply chain financial ratios correlated to stock market capitalization valuation.
• Supply Chain Effective Frontier: The balance of growth, profitability, cycle and complexity metrics to deliver the supply chain strategy. It may or may not maximize the company’s market valuation.
• Supply Chain Excellence: The behavior of companies working to maximize value through the setting of targets for supply chain financial ratios and aligning metrics that matter (tied to value chain strategy).
Definitions
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Supply Chain Insights LLC Copyright © 2013, p. 17
A Look at History: Progress in Productivity
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Supply Chain Insights LLC Copyright © 2013, p. 18
Cash-to-Cash Cycle vs. Gross Margin (2000-2011): Medical Device Industry
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Supply Chain Insights LLC Copyright © 2013, p. 19
Cash-to-Cash Cycle vs. Gross Margin (2000-2011): Pharmaceutical Industry
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Supply Chain Insights LLC Copyright © 2013, p. 20
Inventory Turns vs. Revenue per Employee (2002-2011): Hospital Industry
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Supply Chain Insights LLC Copyright © 2013, p. 21
Cash-to-Cash Cycle vs. Gross Margin (2000-2011): Cross Industry Analysis
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Supply Chain Insights LLC Copyright © 2013, p. 22
Financial Metrics Across the Healthcare Value Chain (2000-2011)
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Supply Chain Insights LLC Copyright © 2013, p. 23
What Is Best in Class?
Understanding the Supply Chain as a Complex System
Which Companies Have Maximized Market Valuation Through Supply Chain Excellence?
Using the Insights
Agenda
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Supply Chain Insights LLC Copyright © 2013, p. 24
Introducing the Supply Chain Index
A formulaic representation of how companies are trading off growth, profitability, cycle and
complexity performance on selected supply chain financial
metrics against market valuation.
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Supply Chain Insights LLC Copyright © 2013, p. 25
1. To better understand which supply chain metrics matter to corporate balance sheet performance in public markets. We want to help leaders better align supply chain and financial performance.
2. To create an objective system for evaluating and ranking supply chains by industry peer group.
3. To connect financial performance with supply chain excellence as measured through quantitative surveys in an effort to better identify and define best practices across industry groups.
Why Did We Do This?
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Supply Chain Insights LLC Copyright © 2013, p. 26
• What it is: A way to understand the impact of companies’ supply chain (relative to peers within an industry sector) to market capitalization based a set of preselected supply chain ratio metrics.
• What it is NOT: A way to evaluate overall company performance or compare the model results to actual market capitalization.
What It Is. What It Is Not.
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Supply Chain Insights LLC Copyright © 2013, p. 27
• May 23rd: presentation of consumer value chain and healthcare value chain industries
• June, July, August: release of results for additional industries and discussion in Supply Chain 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 with speakers selected based on Index performance
Now and Then
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Supply Chain Insights LLC Copyright © 2013, p. 28
Selected 14 Core Supply Chain Ratios to Study
Financial Metrics
Growth Profitability Cycle ComplexityCommon Shares Cash Cash-to-Cash Cycle Altman Z
Employee Growth Cash Change in Period Days of Finished Goods Capital Turnover
Employees Cash on Hand Days of Inventory Current Ratio
Market Capitalization Cash Ratio TTM Days of Payables Outstanding Quick Ratio
R&D Margin Cash Ratio Quarter Days of Raw Materials Return on Assets
R&D Ratio Cash Ratio Year Days of Sales Outstanding Return on Equity
R&D to COGS Ratio Cost of Goods Sold Days of Work in Progress Return on Invested Capital
Revenue EBITDA DPO/DSO Return on Net Assets
Revenue Growth Free Cash Flow Ratio Finished Goods Inventory Revenue per Employee
Revenue Growth TTM Gross Margin Inventory Working Capital Ratio
Revenue TTM Gross Profit Inventory Turns
SG&A Margin Net Profit Margin Receivables Turns
SG&A Ratio Operating Cash Flow Ratio Raw Materials Inventory
SG&A to COGS Ratio Operating Margin Work in Progress Inventory
OPEX Ratio
Pretax Margin
Source: Supply Chain Insights LLC
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Selected Ratios
Supply Chain Insights LLC Copyright © 2013, p. 29
“The output of a credit-strength test that gauges a publicly traded manufacturing company's likelihood of bankruptcy.”
)
What is Altman Z?
Source: Investopedia (http://www.investopedia.com/terms/a/altman.asp)
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Supply Chain Insights LLC Copyright © 2013, p. 30
Consumer Value Chain
Metrics That Matter by Industry
Retail (Discount StoresHousehold & Personal
ProductsChemical
Operating Margin Operating Margin Operating Margin
Working Capital Ratio Free Cash Flow Ratio Days of Inventory
Return on Invested Capital Return on Invested CapitalDays of Payables
Outstanding
DPO/DSO Ratio Current Ratio Return on Assets
Days of Inventory SG&A to COGS Ratio
Days of Payables Outstanding
Days of Inventory
0.89 0.68
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Source: Supply Chain Insights LLC
Supply Chain Insights LLC Copyright © 2013, p. 31
Healthcare Peer Groups
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Supply Chain Insights LLC Copyright © 2013, p. 32
Pharmaceutical Value Chain
Source: Supply Chain Insights LLC
Metrics That Matter by Industry
Medical CareMedical
DistributionPharmaceutical
MajorPharmaceutical
Generic
Free Cash Flow Ratio Operating Margin Free Cash Flow Ratio Operating Margin
Working Capital RatioReturn on Invested
CapitalReturn on Invested
CapitalFree Cash Flow Ratio
Operating Margin Free Cash Flow Ratio Altman Z Working Capital Ratio
SG&A to COGS Ratio Working Capital Ratio Current Ratio DPO/DSO Ratio
YoY Revenue Growth Return on Net AssetsDays of Payables
OutstandingAltman Z
Current Ratio DPO/DSO RatioReturn on Invested
CapitalDays of Sales Outstanding
Current Ratio Current Ratio
Days of Inventory Days of Inventory SG&A to COGS Ratio
Days of Payables Outstanding
Days of Sales Outstanding
Days of Inventory
0.73 0.84 78 35
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Supply Chain Insights LLC Copyright © 2013, p. 33
Medical Device Value Chain
Source: Supply Chain Insights LLC
Metrics That Matter by Industry
Medical CareMedical
DistributionMedical Devices
Medical Instruments &
Supplies
Free Cash Flow Ratio Operating Margin Return on Assets DPO/DSO Ratio
Working Capital RatioReturn on Invested
CapitalOperating Margin Altman Z
Operating Margin Free Cash Flow Ratio Free Cash Flow RatioReturn on Invested
Capital
SG&A to COGS Ratio Working Capital Ratio DPO/DSO Ratio Free Cash Flow Ratio
YoY Revenue Growth Return on Net Assets Working Capital Ratio Working Capital Ratio
Current Ratio DPO/DSO Ratio Return on Net Assets YoY Revenue Growth
Days of Sales Outstanding
Current Ratio YoY Revenue Growth SG&A to COGS Ratio
Days of Inventory Days of Inventory Altman Z Current Ratio
Days of Payables Outstanding
Current RatioDays of Payables
OutstandingDays of Payables
OutstandingDays of Inventory
0.73 0.84 0.48 0.46
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Supply Chain Insights LLC Copyright © 2013, p. 34
Medical Care Equation
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)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) = 6.241727 + 16.32968(free cash flow) + 10.33977(working capital ratio) + 5.72111(operating margin) – 2.38969(sga to cogs ratio) + 1.087475(revenue growth) – 1.00962(current ratio) + 0.022692(days of sales outstanding) + 0.013903(days of inventory) + 0.008173(days of payables outstanding)We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Medical Care Equation
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Supply Chain Insights LLC Copyright © 2013, p. 35
Medical Care Ranking (2012)
Medical Care Ranking (2012)
Rank Company
1 Fresenius Medical Care AG & Co. KGaA
2 Community Health Systems
3 DaVita HealthCare Partners Inc
4 Health Management Associates, Inc.
5 VCA Antech, Inc.
6 Omnicare, Inc.
7 Chemed Corporation
8 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, Gentiva Health 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.
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Supply Chain Insights LLC Copyright © 2013, p. 36
Medical Care Performance Ranking (2012)
Medical Care Ranking (2012)
Rank Company CR DOI DPO DSO FCF OM YOY SGAC WC Equation Output
1Fresenius Medical Care AG & Co. KGaA
1.77 41.19 29.62 81.97 0.097 0.157 0.102 0.272 0.180
2 Community Health Systems
1.60 68.09 152.75 57.92 0.039 0.083 -0.044 0.138 0.098
3 DaVita HealthCare Partners Inc
1.43 5.11 27.10 63.37 0.067 0.158 0.216 0.161 0.105
4Health Management Associates, Inc.
1.51 64.46 96.06 60.66 0.035 0.051 0.155 0.090 0.085
5VCA Antech, Inc.
1.31 14.18 10.86 12.01 0.094 0.058 0.144 0.094 0.034
Source: 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).
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Supply Chain Insights LLC Copyright © 2013, p. 37
Medical Distribution Equation
Ln(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)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) =6.036327 + 33.38703(operating margin) -24.6924(return on invested capital) + 15.23431(free cash flow ratio) -11.1125(working capital ratio) + 1.488203(return on net assets) + 1.371671(dpo/dso ratio) + 0.83093(current ratio) + 0.018224(days of inventory)We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Medical Distribution Equation
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Supply Chain Insights LLC Copyright © 2013, p. 38
Medical Distribution Ranking (2012)
Medical Distribution Ranking (2012)
Rank Company
1 McKesson Corporation
2 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., ALR Technologies Inc. and Chindex International, Inc. for which 2012 results were not available as of 5/15/2013.
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Supply Chain Insights LLC Copyright © 2013, p. 39
Medical Distribution Performance Ranking (2012)
Medical Distribution Ranking (2012)
Rank Company CR DOI DPODSO FCF OM ROIC RONA WC Equation Output
1 McKesson Corporation 1.09 31.66 1.91 0.021 0.017 0.065 0.474 0.016
2 Cardinal Health, Inc. 1.24 27.86 1.85 0.008 0.017 0.074 0.210 0.031
3 Henry Schein Inc. 1.84 68.10 0.78 0.040 0.069 0.116 0.259 0.137
4 Patterson Companies Inc.
2.65 49.08 0.45 0.082 0.101 0.131 0.200 0.246
5 Owens & Minor, Inc. 1.76 34.92 1.09 0.020 0.022 0.089 0.122 0.079
Source: 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).
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Supply Chain Insights LLC Copyright © 2013, p. 40
Drug Manufacturers:Major Equation
Ln(market cap) = 14.00 + 5.75(FCF) + 5.14(ROIC) – 4.02(AZ) – 1.09(CR) – 0.003(DPO)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) = 14.00234 + 5.748799(free cash flow ratio) + 5.141905(return on invested capital) -4.02167(altman z) – 1.08604(current ratio) – 0.00253(days of payables outstanding)We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Drug Manufacturers - Major Equation
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Supply Chain Insights LLC Copyright © 2013, p. 41
Drug Manufacturers:Generic Equation
Ln(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)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) = 8.211013 + 2.391626(operating margin) + 1.616986(free cash flow ratio) + 1.334929(working capital ratio) – 1.27888(dpo/dso ratio)+ 1.277077(altman z) – 1.25889(return on invested capital) – 0.48899(current ratio) – 0.244(sga to cogs ratio) – 0.0128(days of sales outstanding) + 0.006356(days of inventory)We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Drug Manufacturers - Generic Equation
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Supply Chain Insights LLC Copyright © 2013, p. 42
Medical Device Equation
Ln(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)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) = 5.18946 – 5.83668(return on assets) + 5.168711(operating margin) + 4.416875(free cash flow ratio) – 3.68006(dpo/dso ratio) + 2.757156(working capital ratio) + 1.968532(return on net assets) + 1.325632(revenue growth) + 1.213438(altman z) – 0.28953(current ratio) + 0.017218(days of payables outstanding). We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Medical Device Equation
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Supply Chain Insights LLC Copyright © 2013, p. 43
Medical Instruments & Supplies Equation
Ln(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)
Correlation Strength
NOTE: Full equation is Ln(market capitalization) = 9.740893 -2.97109(dpo/dso ratio) – 1.99811(altman z) + 1.911615(return on invested capital) + 1.247788(free cash flow ratio) + 0.902128(working capital ratio) + 0.785072(revenue growth) – 0.68905(sga to cogs ratio) – 0.29805(current ratio) + 0.015862(days of payables outstanding) – 0.00697(days of inventory)We utilized adjusted which accounts for the occurrence of large p values. Outliers values were defined and excluded as those 5 times larger than IQR.
Medical Instruments & Supplies Equation
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Supply Chain Insights LLC Copyright © 2013, p. 44
What Is Best in Class?
Understanding Supply Chain as a Complex System
Which Companies Have Maximized Market Valuation Through Supply Chain Excellence?
Using the Insights
Agenda
#sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 45
Consumer Value Chain
Retail(Discount
Stores)
Household & Personal Products
Chemical
Equations: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 is a sustaining win-win value proposition.
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Supply Chain Insights LLC Copyright © 2013, p. 46
Pharmaceutical Value Chain
Medical Care
Medical Distribution
Drug Manufacturers
- Major
Equations: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 is a 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)
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Drug Manufacturers
-Generic
Major Generic
Supply Chain Insights LLC Copyright © 2013, p. 47
Medical Device Value Chain
Medical Care
Medical Distribution
Medical Devices
Equations: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 is a 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)
Medical Instruments & Supplies
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Medical Devices
Medical Instruments & Supplies
Supply Chain Insights LLC Copyright © 2013, p. 48
Step 1: Located data sources
Step 2: Selected core supply chain ratios from over 50 financial metrics
Step 3: Identified meaningful metrics per industry using regression analysis among selected ratios
Step 4: Constructed industry equation based on correlation of industry metrics to market capitalization values
Step 5: Determined company rankings within industry by applying 2012 company results to industry equation
Step 6: Analyze peer group companies over the last decade
Step 7: Correlate Supply Chain Index findings to supply chain practices, technologies and organizational design
Our Next Steps: Supply Chain Index Methodology
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Supply Chain Insights LLC Copyright © 2013, p. 49
• What drives value in each industry is different.
• Financial markets reward supply chain balance and alignment.
• The supply chain is a complex system. Supply chain excellence must be carefully defined.
• Relationships should be built upon cross-industry definitions of value to create win-win relationships.
• There is no substitute for leadership.
• Supply chain excellence matters.
Summary
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Supply Chain Insights LLC Copyright © 2013, p. 50
1. Join the Supply Chain Index Group in the Supply Chain Insights Community for Peer Review and Discussion: www.scicommunity.com
2. Gain Insights from Supply Chain Leaders at the Global Summit www.supplychaininsightsglobalsummit.com
3. Build the Next Generation of Supply Chain Research Using the Index
4. Leverage the Index to Connect Supply Chain Processes, People and Technology Decisions to Balance Sheet Results
What You Can Do
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Supply Chain Insights LLC Copyright © 2013, p. 51
Join Us!
www.supplychaininsightsglobalsummit.com
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Supply Chain Insights LLC Copyright © 2013, p. 52
PAST 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 Index
Webinars
www.supplychaininsights.com/upcoming-webinars
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UPCOMING WEBINARS• June 13th: Sales and Operations Planning: State
of the Union
• June 27th: Supply Chain Index Part III, Apparel/Food & Beverage
• July 11th: Big Insights From Big Data Supply Chains
• July 25th: Supply Chain Index Part IV, Consumer Electronics & Technology
Supply Chain Insights LLC Copyright © 2013, p. 53
Supply Chain Insights Community
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Supply Chain Insights LLC Copyright © 2013, p. 54
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. #sciwebinar
Supply Chain Insights LLC Copyright © 2013, p. 55
Where Do You Find Lora?
Contact Information: [email protected]
Blog: www.supplychainshaman.com (4000 pageviews/month)
Twitter: lcecere 3850 followers. Rated as a top rated supply chain social network user.
LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (3750 in the network)
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Supply Chain Insights LLC Copyright © 2013, p. 56
Where Do You Find Abby?
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Contact Information: [email protected]
Blog: www.supplychainindex.com (2600 pageviews/month)
Twitter: @indexgirl
LinkedIn: www.linkedin.com/pub/abby-mayer/40/941/972