More Related Content Similar to APICS Presentation on Agility on October 4 (20) More from Lora Cecere (20) APICS Presentation on Agility on October 43. Agenda
Supply Chain Insights LLC Copyright © 2012, p. 3
5. Average Days of Inventory by Year
250.0
200.0
Days of Inventory
150.0
100.0
50.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Consumer Packaged Goods 59.0 57.0 62.0 64.0 67.0 67.0 68.0 70.0 70.0 64.0 64.0 67.0
Chemical 71.5 71.9 78.2 75.1 62.0 70.3 68.1 64.3 64.3 78.6 72.9 72.8
Pharma 122.2 133.7 190.1 171.0 184.3 175.6 167.8 149.8 154.9 198.7 154.3 131.8
High Tech 93.1 57.6 46.5 48.5 35.9 37.3 43.8 36.8 34.6 41.3 34.8 30.4
Average 86.5 80.0 94.2 89.6 87.3 87.5 86.9 80.2 81.0 95.6 81.5 75.5
Source: Supply Chain Insights 2012
Supply Chain Insights LLC Copyright © 2012, p. 5
6. Average Days of Working Capital by Industry
350.0
300.0
Days of Working Capital
250.0
200.0
150.0
100.0
50.0
0.0
-50.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Consumer Packaged Goods -20.0 -8.0 -12.0 -2.0 -21.0 -23.0 -8.0 -18.0 -11.0 -10.0 -12.0 -13.0
Chemical 37.3 44.7 61.7 71.9 64.8 64.1 63.8 57.0 51.7 74.8 85.6 77.0
Pharma 64.1 56.4 48.4 56.2 71.8 94.1 92.6 88.1 87.1 111.0 116.0 113.2
High Tech 231.5 290.3 283.5 243.5 173.5 138.9 109.4 103.0 92.4 131.9 138.9 140.9
Average 78.2 95.9 95.4 92.4 72.3 68.5 64.5 57.5 55.1 76.9 82.1 79.5
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Source: Supply Chain Insights 2012
Supply Chain Insights LLC Copyright © 2012, p. 6
7. Data Latency and Distortion
Retailer DC Manufacturer DC Suppliers
Store
Demand
Signal
Accurate
Almost Weekly
Trivial Easy Difficult Impossible Forecasting
is ...
Instant 3-10 Days 10-20 Days Delay from
20-50 Days
20-45 Days Purchase to
Variable 7-20 Days 45-80 Days Signal
Red Represents Emerging Economies with
Distributor Trade
Supply Chain Insights LLC Copyright © 2012, p. 7
8. Building End-to-End Value Networks
Today
Manufacturer
True collaboration only happens when there is a
sustaining win/win value proposition.
Supply Chain Insights LLC Copyright © 2012, p. 8
9. A Story of Value Chain Leaders
Supply Chain Insights LLC Copyright © 2012, p. 9
10. Cash-to-Cash Cycle vs. Gross Margin (2000-2011)
SUMMARY SLIDE
Supply Chain Insights LLC Copyright © 2012, p. 10
11. Cash-to-Cash Cycle vs. Gross Margin (2000-2011)
SUMMARY SLIDE
Supply Chain Insights LLC Copyright © 2012, p. 11
12. Collaboration: The Right Stuff
SHARED
VISION
+ SKILLS + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = CHANGE
SKILLS + INCENTIVE + RESOURCES + PLAN = CONFUSION
SHARED
VISION
+ INCENTIVE + RESOURCES + PLAN + LEADERSHIP = ANXIETY
SHARED FALSE
+ SKILLS + INCENTIVE + RESOURCES + LEADERSHIP =
VISION STARTS
SHARED
VISION
+ SKILLS + INCENTIVE + PLAN + LEADERSHIP = FRUSTRATION
SHARED GRADUAL
+ SKILLS + RESOURCES + PLAN + LEADERSHIP =
VISION CHANGE
Source: J.P. Kotter
Supply Chain Insights LLC Copyright © 2012, p. 12
13. Agenda
Supply Chain Insights LLC Copyright © 2012, p. 13
15. Evolution of Supply Chain Process
Excellence
Align: Continuous
Building Horizontal Testing Orchestrate
Market Process Connectors Learning
Improving Demand and Supply
Driven In Market
Adapt:
Demand Resilient
Reliable
Driven
Right Product Efficient
Absorb
Sense Demand
Demand Volatility Right Place Cost
and Supply
Right Time
Procure to
Shape Absorb Supply pay/order to
Demand and Volatility cash
Supply based Right Cost
on Market
Supply Chain Insights LLC Copyright © 2012, p. 15
17. Agenda
Supply Chain Insights LLC Copyright © 2012, p. 17
23. The Need for Balance
Supply Chain Insights LLC Copyright © 2012, p. 23
24. S&OP Balance
Supply Chain Insights LLC Copyright © 2012, p. 24
25. Starts with the Design of Value Network
Strategy
Business Strategy
What are the right things to do to increase company value?
Value-network Supply Chain Strategy
What are the right ways to support the business strategy?
What are the right trade-offs between value drivers for each value network?
Align demand Right product Design the Build Align supply
Supply chain strategy
relationships platforms supply organizational relationships
response systems and
manage talent
Effective Supply
Demand Networks Design Networks Continuous Networks
Improvement
Joint Value Creation Innovation Supply Chain Execution of buy-
Strategies Methodologies Network Design Capabilities Required side strategies
Business Process
How do I do the right things right?
Source: Supply Chain Insights, LLC
Supply Chain Insights LLC Copyright © 2012, p. 25
26. A Supply Chain
is a Complex System
with Complex Processes
with Increasing Complexity
Supply Chain Insights LLC Copyright © 2012, p. 26
27. Conquering the Effective Frontier
Profitable Growth
Revenue Cost of Goods
Working Capital
Corporate Social Responsibility
R&D Strategy and Investment Asset Strategy and Investment
Forecast Accuracy Customer Service Inventory
Channel Strategy Product and Supplier Strategy
Service Portfolio
Sales Distribution Manufacturing Logistics Procurement
Policies Policies Policies Policies Policies
Returns Backorders First Pass Yield Empty Miles Material Yield
Supply Chain Insights LLC Copyright © 2012, p. 27
28. Useful Ratios
Supply Chain Insights LLC Copyright © 2012, p. 28
29. What is Best in Class?
• Performance better than peer group
• Year-over-year improvements
• Consistency in results
• Leadership in managing trade-offs
Supply Chain Insights LLC Copyright © 2012, p. 29
35. Cash-to-Cash Cycle vs. Gross Margin
(2000-2011) SUMMARY SLIDE
Supply Chain Insights LLC Copyright © 2012, p. 35
36. Inventory Turns vs. Revenue per Employee
(2002-2003)
Supply Chain Insights LLC Copyright © 2012, p. 36
37. Inventory Turns vs. Revenue per Employee
(2004-2007)
Supply Chain Insights LLC Copyright © 2012, p. 37
38. Inventory Turns vs. Revenue per Employee
(2008-2011)
Supply Chain Insights LLC Copyright © 2012, p. 38
39. Inventory Turns vs. Revenue per Employee
(2002-2011) SUMMARY SLIDE
Supply Chain Insights LLC Copyright © 2012, p. 39
41. Challenge
Supply Chain Insights LLC Copyright © 2012, p. 41
42. Wrap-up
• We have spoken for many years about the
need for agility in the supply chain, but we
have not designed for it or measured it.
• As our supply chains become more central to
global success, agility becomes more
important.
Supply Chain Insights LLC Copyright © 2012, p. 42
44. EDUCATE
SCI Research Supply Chain Index Ask a Supply Chain Wizard Supply Chain Wiki
Blogs Videos, Webinars, and Share Your Own
Podcasts
Supply Chain Insights LLC Copyright © 2012, p. 44
45. ENRICH
Consulting Technology
NEW
Supply Chain Insights LLC Copyright © 2012, p. 45
46. EVOLVE
Job Postings Events
Salary Information Help Board
NEW
Supply Chain Insights LLC Copyright © 2012, p. 46
47. Who is Supply Chain Insights?
Supply Chain Insights is focused on delivering
actionable 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.
Supply Chain Insights LLC Copyright © 2012, p. 47
48. Where is Your Opportunity?
Supply Chain Insights LLC Copyright © 2012, p. 48
49. 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.
Supply Chain Insights LLC Copyright © 2012, p. 49
50. Where do you find Lora?
Contact Information: loracecere@gmail.com
Blog: www.supplychainshaman.com
(4000 pageviews/month)
Twitter: lcecere 3300 followers. Rated as the
top rated supply chain social network user.
Linkedin: linkedin.com/pub/lora-
cecere/0/196/573 (2300 in the network)
Supply Chain Insights LLC Copyright © 2012, p. 50
Editor's Notes Why have we not been able to make progress on inventory across supply chain industries? S&OP is one of the largest factors in driving agility. How do you define it? Has S&OP improved agility for you? Only 8% of organizations have sufficient what if capabilities do manage the S&OP Process to their satisfaction. How about you? People speak of IBP and financial analysis. Which of these do you do? What are the issues with the ones that you have to track? Tell us the details that are stumbling blocks. What is balance? Are you balanced? What is the impact of being balanced? How do you tie planning to execution? What challenges have you seen and how have you overcome them?