imagine the supply chain of the future

9/15/2015 September 2015, p.1Supply Chain Insights Global Summit #ImagineSC

Imagine the Supply Chain of the Future

Lora CecereFounder

Supply Chain Insights


Imagine the Supply Chain: 2025• A Look Back: Supply Chains to Admire• Making the Digital Pivot• A Look Forward: Five Trends


IMAGINE the Supply Chain

of 2025


Our Goal Is to Help the Average Joe


9 out of 10 Supply Chains are Stuck


What We Expected


Progress: All IndustriesIndustry Snapshots (2006-2013)

IndustryYear-over-Year

Revenue Growth

Operating Margin

Inventory Turns

Cash-to-Cash Cycle

Revenue per Employee (K$)

SG&A Ratio

Retail Apparel Industry

18%39%

0.3927%

0505%

6826%

32518%

27%05%

Apparel Manufacturing Industry

14%82%

0.1232%

0568%

15008%

400355%

27%63%

Mass Retail Industry

09%50%

0.0620%

0606%

03148%

35048%

23%6%

Beverage Industry

09%61%

0.1916%

0204%

5346%

512 NC

24% 16%

Pharmaceutical Industry

08%47%

0.2329%

0316%

15547%

57232%

27%08%

Chemical Industry

08%45%

0.1010%

0604%

8723%

55723%

14%27%

Medical Device Industry

06%38%

0.1432%

0213%

20616%

35112%

34%04%

Grocery Retail Industry

06%31%

0.0337%

1701%

1050%

40554%

14%06%

Consumer Packaged Goods

05%25%

0.1473%

08482%

7217%

33314%

26% 09%

Food Industry

05%55%

0.1019%

07 17%

4004%

53455%

20% 18%

Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2013Industry 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


The Supply Chain Effective Frontier


Nike: Inventory Turns vs. Operating Margin (2006-2014)

0.09 0.10 0.11 0.12 0.13 0.14 0.157.0

8.0

9.0

NikeOperating Margin

Inve

ntor

y Tu

rns

2014

2006

Average (Operating Margin, Inventory Turns)Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts

Best Scenario

NKE0.13, 6.10


Nike and Adidas

0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.195.0

6.0

7.0

8.0

9.0

Adidas NikeOperating Margin

Inve

ntor

y Tu

rns

2014

2006 2014

2006

Average (Operating Margin, Inventory Turns)Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 from YCharts

Best Scenario

NKE0.13, 6.10

ADDD0.08, 6.10


Apparel AnalysisAPPAREL COMPANIES

AdidasCarter’s

Columbia SportswearGildan Activewear

Hanes BrandsHugo BossKate Spade

PVHNike

Ralph LaurenUnder Armour

VF CorporationWacoal Holdings Corp


Apparel Results


Summit Registrants Survey Results

QUESTION

Which three METRICS do you believe have the highest correlation

to market capitalization?

Survey conducted among 57 registrants prior to the Summit


Supply Chains to Admire Methodology

PERFORMANCEBeats the industry

average for operating margin, inventory turns and ROIC for 2006-2014

and 2009-2014

IMPROVEMENTRanks above peer

group average on The Supply Chain Index for 2006-2014 or 2009-2014


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%)

𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙=𝟏𝟑𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓+

𝟏𝟑 𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓+

𝟏𝟑 𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓


Winners Two Years in a Row


Organizations are Too Functional


• Continuity of leadership• Supply chain talent development• Focus on a multi-year supply chain strategy• Clear governance to guide cross-functional decision-

making• Strength in horizontal processes• Excellence in supply chain planning, network design and

inventory management

What Drives Top Performance?


Andrea Turner Kevin Pruitt Sharon Hall

Today, You will Hear from Three Winners



QUESTION

When it comes to driving supply chain excellence by 2020, how excited are

you personally about each of the following SUPPLY CHAIN TRENDS?



The Shaman’s Predictions for 2025:1. Supply Chains Will Learn as We Sleep

2. B2B Automation Happens Through a Network of Networks

3. Manless Vehicles Redefine Trucking

4. Outside-in Processes Become the Norm

5. 15% of Companies Make the Digital Pivot


Let’s Get on with the Show!



QUESTION

How INTERESTED are you personally in the following aspects of

the Global Summit?



Meet the Supply Chain Insights Team

Lora CecereFounder and CEO

Alison CrawfordMarketing Director

Regina Denman Client Services Director

Michael Hambrick System Administrator

Heather Hart Research Director

Jill Smith Operations Manager


Switching Seats for Better Networking

How to read your NAME BADGE:

LoraLora Cecere

Supply Chain Insights

Cecere, Lora12 8 16

Table numbers by session: 12 8 16Wed AM Wed PM Thur AM

To improve networking, we ask that everyone switch seats 1) BEFORE lunch on Wednesday and

2) BEFORE the Thursday morning session


Financial Benchmarking Form


Keynote Sponsor Opening Reception Day One Reception

Morning and Afternoon Breaks

Book Giveaways

5K Run Simulation Game

General Sponsors

Thank You to Our Sponsors

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