More Related Content More from Lora Cecere (20) Cscmp46. Supply Chain Insights LLC Copyright © 2015, p. 6
My Point of Reference
Wiley
December 2012
Wiley
December 2014
Self-published
September 2014
Self-published
September 2015
9. Supply Chain Insights LLC Copyright © 2015, p. 9
Progress: All Industries
Industry Snapshots (2006-2013)
Industry
Year –over-
Year
Revenue
Growth
Operating
Margin
Inventory
Turns
Cash-to-
Cash
Cycle
Revenue
per
Employee
(K$)
SG&A
Ratio
Retail Apparel Industry
18%
39%
0.39
27%
05
05%
68
26%
325
18%
27%
05%
Apparel Manufacturing Industry
14%
82%
0.12
32%
05
68%
150
08%
400
355%
27%
63%
Mass Retail Industry
09%
50%
0.06
20%
06
06%
03
148%
350
48%
23%
6%
Beverage Industry
09%
61%
0.19
16%
02
04%
53
46%
512
NC
24%
16%
Pharmaceutical Industry
08%
47%
0.23
29%
03
16%
155
47%
572
32%
27%
08%
Chemical Industry
08%
45%
0.10
10%
06
04%
87
23%
557
23%
14%
27%
Medical Device Industry
06%
38%
0.14
32%
02
13%
206
16%
351
12%
34%
04%
Grocery Retail Industry
06%
31%
0.03
37%
17
01%
10
50%
405
54%
14%
06%
Consumer Packaged Goods
05%
25%
0.14
73%
08
482%
72
17%
333
14%
26%
09%
Food Industry
05%
55%
0.10
19%
07
17%
40
04%
534
55%
20%
18%
Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2013
Industry Average comprised of public companies (combined food & beverage industry: NAICS 3112% where % is any number from 0-9, 311320, 311520, 311821, 311941 &
312111), (chemical: NAICS 325188 & 325998), (consumer packaged goods: NAICS 3256% where % is any number from 0-9), (medical device industry: NAICS 339112),
(pharmaceutical industry: NAICS 325412) reporting in One Source with 20123annual sales greater than $1billion
NC=no change
12. Supply Chain Insights LLC Copyright © 2015, p. 12
Why? The Long Tail of the Supply Chain:
Growing Complexity
Volume
Level of Predictability
Predictability based on forecast accuracy vs Actual Order Profiles
13. Supply Chain Insights LLC Copyright © 2015, p. 13
Demand
Signal
Accurate Weekly
Forecasting is ...
Delay from
Purchase to
Signal
What is Demand?
* Represents emerging markets
14. Supply Chain Insights LLC Copyright © 2015, p. 14
Consumer-driven Supply Networks: Defined by P&G in the 1990s
as a shelf-driven, outside-in process defined by successful execution
of the two moments of truth.
Demand-driven Supply Networks: As defined by AMR Research in
2004: a supply chain that senses and translates market signals in
real time.
Demand-driven Value Networks: As defined by AMR Research in
2007: A network that senses demand with minimal latency to drive a
near-real time response to shape and translate demand.
Market-driven Value Networks: As defined by Supply Chain
Insights in 2010: an adaptive network focused on a value-based
outcomes that senses, translates, and orchestrates market changes
(buy and sell-side markets) bi-directionally with near-real time data to
align sell, deliver, make and sourcing organizations outside-in.
Evolution of Demand-driven Concepts
21. Supply Chain Insights LLC Copyright © 2015, p. 21
A Supply Chain
is a Complex System
with Complex
Processes
with Increasing
Complexity
What we Learned….
#sciwebinar
24. Supply Chain Insights LLC Copyright © 2015, p. 24
Orbit Chart: Wal-Mart
(Inventory Turns and Operating Margin)
#sciwebinar
25. Supply Chain Insights LLC Copyright © 2015, p. 25
Orbit Chart: Apple
(Inventory Turns and Operating Margin)
#sciwebinar
28. Supply Chain Insights LLC Copyright © 2015, p. 28
Measuring Supply Chain Improvement
Overall Ranking per Company
• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%)
• Strength: Inventory Turns & Operating Margin Vector Trajectory (30% of score)
• Resiliency: Inventory Turns & Operating Margin Mean Distance (30%)
𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙 =
𝟏
𝟑
𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓 +
𝟏
𝟑
𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓 +
𝟏
𝟑
𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓
29. Supply Chain Insights LLC Copyright © 2015, p. 29
Supply Chains to Admire Methodology
Performance
Beats the industry
average for operating
margin, inventory turns
and ROIC for 2006-
2014 and 2009-2014
Improvement
Ranks above peer
group average on
The Supply Chain
Index for 2006-
2014 or 2009-2014
+
31. Supply Chain Insights LLC Copyright © 2015, p. 31
Annual Study: Supply Chains To Admire
Supply Chains to Admire 2015 to be Announced at the Supply
Chain Insights Global Summit on September 9th and 10th
32. Supply Chain Insights LLC Copyright © 2015, p. 32
• Which metrics matter?
– Growth, operating margin, inventory turns, ROIC
• How do we get unstuck?
– Focus cross-functionally on a balanced portfolio. Bonus against
these.
– Augment with functional metrics focused on improving RELIABILITY.
• What are the functional reliability metrics?
– Examples include: First pass yield, OEE, on-time delivery, orders
shipped complete, hands-free orders, schedule attainment, safety
metrics, employee turnover
My Insights
33. Supply Chain Insights LLC Copyright © 2015, p. 33
Overall Network: Inventory Turns versus
Operating Margin 2006-2012
#sciwebinar
35. Supply Chain Insights LLC Copyright © 2015, p. 35
SHARED
VISION
+ SKILLS + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = CHANGE
SKILLS + INCENTIVE + RESOURCES + PLAN = CONFUSION
SHARED
VISION
+ INCENTIVE + RESOURCES + PLAN + LEADERSHIP = ANXIETY
SHARED
VISION
+ SKILLS + INCENTIVE + RESOURCES + LEADERSHIP =
FALSE
STARTS
SHARED
VISION
+ SKILLS + INCENTIVE + PLAN + LEADERSHIP = FRUSTRATION
SHARED
VISION
+ SKILLS + RESOURCES + PLAN + LEADERSHIP =
GRADUAL
CHANGE
Source: J.P. Kotter
Collaboration: The Right Stuff
37. Supply Chain Insights LLC Copyright © 2015, p. 37
• Leadership
• Building of talent
• Alignment
• Analytics
• Outside-in processes
• Horizontal process focus
• Active and intentional design
• Supply chain planning
What Makes a Difference
44. Supply Chain Insights LLC Copyright © 2015, p. 44
It is not an evolution
We are defining new practices
It is time to learn from the past, to unlearn, to
beginning to relearn
Get Prepared
46. Voice of the Supply Chain Leader Study
What are supply chain leaders’ attitudes and plans regarding IT systems
and spending? What are today’s exciting trends and top challenges?
For Manufacturers, Retailers, and Distributors.
Take the Survey www.tinyurl.com/sci-vsc4-evt
Continuous Improvement Study
What are companies’ current Continuous Improvement processes and
how are they designed? Have they impacted performance?
For Manufacturers, Retailers and Distributors who have and are familiar
with their Continuous Improvement processes.
Take the Survey www.tinyurl.com/sci-cim-evt
Risk Management Study
What is the current state of supply chain risk management
and the impact of supply chain disruptions?
For Manufacturers, Retailers and Distributors and
Third Party Logistics Providers.
Take the Survey www.tinyurl.com/sci-rsk2-evt
Take a Supply Chain Insights Survey
Our philosophy is “you give to us and we give to you.” We promise to share the
results with you at no charge and can also review the results with you either via a
virtual roundtable or a dedicated call. We want you to benefit from our research!
49. Supply Chain Insights LLC Copyright © 2015, p. 49
Founder: Lora Cecere
• Founder of Supply Chain Insights
• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 3 books: Bricks Matter (2012), Shaman’s Journal (2014)
and Supply Chain Metrics That Matter (December 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 (6000 followers)
• LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (46,000 followers)