Supply chain index june10

The Supply Chain Index
Supply 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
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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

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.

Industry Overview

Industry Progress at the Intersection of Operating
Margin and Inventory Turns

Companies Get More Serious with A Recession

Today’s Supply Chain
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A Business Continuity Risk
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Agenda
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Mining 20 Years of Financial Data
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Correlations to Market Capitalization

How to Read an Orbit Chart
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Supply Chain Metrics That Matter Reports
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Agenda
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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

Industry Resiliency: 2000-2012

Resiliency: 2000-2012

Agenda
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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 Index
A 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%

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

Supply Chain Index: Pharmaceuticals

Supply Chain Index: Retail

Supply Chain Index: Consumer Products

Supply Chain Index: Automotive

Supply Chain Index: Automotive Suppliers

Supply Chain Index: Semiconductor Industries

Supply Chain Index: Next Steps
Date Release
May 13
Supply Chain Index Report:
Strength, Balance and Resiliency
May 19
Supply 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 10-11
Final 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.

• 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?

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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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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Supply chain index june10

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