The document summarizes a webinar from Supply Chain Insights on improving supply chain strength and resiliency. It discusses measuring supply chain performance using metrics like inventory turns and operating margin. It also introduces a Supply Chain Index that ranks companies based on these metrics and analyzes industry data to identify opportunities to increase resiliency by better balancing measures like inventory and profitability. The webinar examined various industries and identified leaders that maintained strong, balanced and resilient supply chain performance over time.

1. Improving Supply Chain
Strength and Resiliency
Webinar
April 24, 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= .3(Ranking on Growth/ROIC)+.3(Ranking on
Operating Margin/Inventory)+.3(Resiliency Ranking)+.1 (Peer Assessment
Ranking)
Supply Chain Index Calculation
NAICS
Code
Growth/ROIC)
Value
Balance
Ranking
Operating
Margin/Inventory
Value
Strength Ranking Resiliency
Value
Resiliency
Ranking
Peer Rating Peer
Ranking
Total Score
For the period of 2006-2013

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

20. Supply Chain Insights LLC Copyright © 2013, p. 20
Agenda
#sciwebinar

21. Supply Chain Insights LLC Copyright © 2013, p. 21
Considerations
#sciwebinar

22. Supply Chain Insights LLC Copyright © 2013, p. 22
Resiliency
#sciwebinar

23. Supply Chain Insights LLC Copyright © 2013, p. 23
A Look at Medical Device Companies:
Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar

24. Supply Chain Insights LLC Copyright © 2013, p. 24
Medical Device Company Resiliency
#sciwebinar

25. Supply Chain Insights LLC Copyright © 2013, p. 25
Inventory Turns vs. Operating Margin
(2000-2012)

26. Supply Chain Insights LLC Copyright © 2013, p. 26
Consumer Products Resiliency
#sciwebinar

27. Supply Chain Insights LLC Copyright © 2013, p. 27
A Look at Chemical Companies:
Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar

28. Supply Chain Insights LLC Copyright © 2013, p. 28
Chemical Company Resiliency
#sciwebinar

29. Supply Chain Insights LLC Copyright © 2013, p. 29
A Look at Food:
Inventory Turns vs. Operating Margin
(2000-2012)
#sciwebinar

30. Supply Chain Insights LLC Copyright © 2013, p. 30
Food Products Resiliency
#sciwebinar

31. Supply Chain Insights LLC Copyright © 2013, p. 31
Consumer Electronics: Inventory Turns
vs. Operating Margin (2000-2012)

32. Supply Chain Insights LLC Copyright © 2013, p. 32
Consumer Electronics Resiliency
#sciwebinar
Company Panasonic Samsung Sanyo Harman LG
Electronics
Sony
Resiliency .51 .59 .68 .93 1.12 1.46

33. Supply Chain Insights LLC Copyright © 2013, p. 33
Strength & Balance
• Strength: Inventory Turns & Operating
Margin Vector Trajectory (30%)
• Balance: Return on Invested Capital &
Revenue Growth Vector Trajectory (30%)
#sciwebinar

34. Supply Chain Insights LLC Copyright © 2013, p. 34
Agenda
#sciwebinar

35. Supply Chain Insights LLC Copyright © 2013, p. 35
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

36. Supply Chain Insights LLC Copyright © 2013, p. 36
• 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

37. Supply Chain Insights LLC Copyright © 2013, p. 37
Agenda
#sciwebinar

38. Supply Chain Insights LLC Copyright © 2013, p. 38
1. Finalize Strength & Balance metrics
2. Supply Chain Index methodology report in
May
3. Consumer, Healthcare and Industrial Value
Network reports through the summer
4. Final analysis of companies to be revealed
at the 2014 Supply Chain Insights Global
Summit
Next Steps
#sciwebinar

39. Supply Chain Insights LLC Copyright © 2013, p. 39
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

40. Supply Chain Insights LLC Copyright © 2013, p. 40
What’s Happening at
Supply Chain Insights?
www.supplychaininsights.com
#sciwebinar

41. Supply Chain Insights LLC Copyright © 2013, p. 41
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

42. #sciwebinar