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The Supply Chain Index 
Lora Cecere 
Abby Mayer
Abby Mayer 
Research Associate 
Lora Cecere 
Founder and CEO 
Dr. George Runger 
Professor, CIDSE, ASU 
The Research Team
Today’s Supply Chain is Stuck
Industry Overview
Why? Demand Growing as a Risk
Why? The Long Tail of the Supply Chain: 
Growing Complexity 
Volume 
Level of Predictability 
Predictability based on forecast accuracy vs Actual Order Profiles
Demand 
Signal 
Accurate 
Weekly 
Forecasting 
is ... 
Delay from 
Purchase to 
Signal 
Why? Data Latency and Distortion 
Across the Network 
Red Represents Emerging Economies with Distributor Trade 
Retailer DC 
Easy 
3-10 Days 
7-20 Days 
Manufacturer DC 
Difficult 
10-20 Days 
20-45 Days 
Suppliers 
Almost 
Impossible 
20-50 Days 
45-80 Days 
Store 
Trivial 
Instant 
Variable
Fallacy #1: Functional Excellence
Fallacy #2: Project-based Focus 
#sciwebinar
Companies Get More Serious 
With A Recession: But Cannot Sustain It 
#sciwebinar
What We Expected
A Supply Chain 
is a Complex System 
with Complex 
Processes 
with Increasing 
Complexity
Our Model: The Supply Chain 
Effective Frontier
Orbit Chart: Wal-Mart 
(Inventory Turns and Operating Margin)
Orbit Chart: Apple 
(Inventory Turns and Operating Margin)
Orbit Charts: Dow Chemical Company
Orbit Chart: Procter & Gamble 
(Inventory Turns and Operating Margin)
Orbit Charts: Mattel, Inc. 
(Inventory Turns versus Operating Margin)
Overall Network: Inventory Turns versus 
Operating Margin 2006-2012
Preliminary Research: Correlations 
to Market Capitalization
Supply Chain Metrics That Matter 
Reports
The Supply Chain Index 
(Improvement) 
The Supply Chain Index A new way to measure relative 
Overall Ranking per Company 
supply chain performance by 
industry, based on the 
components of balance, strength 
and resiliency. 
• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory 
• Strength: Inventory Turns & Operating Margin Vector Trajectory 
• Resiliency: Inventory Turns & Operating Margin Mean Distance
Mining 20 Years of Financial Data
Balance, Strength & Resiliency
Chemical 2006-2013
Chemical 2009-2013
Our Answer 
+ 
Performance Improvement 
Beats the industry 
average for operating 
margin, inventory turns 
and ROIC for 2006- 
2013 
Ranks above peer 
group average on 
The Supply Chain 
Index for 2006-2013 
or 2009-2013
Supply Chains to Admire 
Consumer Value 
Networks 
Industrial Value 
Networks
Retail
Consumer Goods
Food
Beverage
Apparel
Chemical
Pharmaceutical
Medical Device
Paper and Packaging
Semiconductor
Automotive
Consumer Electronics
Automotive Suppliers
Supply Chains to Admire 
Consumer Value 
Networks 
Industrial Value 
Networks
What Makes a Difference 
• Leadership 
• Building of talent 
• Inside-out processes 
• Horizontal process focus 
• Active and intentional design 
• Supply chain planning
What Does Not Work 
• A project-based focus 
• Vertical excellence without an end-to-end 
focus 
• Unchecked complexity 
• Big bang projects 
• Pushing cost and waste backwards in the 
value network
Questions?
Don’t Forget to Complete the 
Evaluation! 
Download the conference app and rate this session. 
Start by choosing: “Cornerstones and Tracks” on the main 
menu and follow the prompts to this session’s landing page.

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