imagine the supply chain of the future

9/11/2014 September 2014, p.1Supply Chain Insights Global Summit #ImagineSC

Imagine the Supply Chain of the Future

Lora CecereSupply Chain Insights


Today’s Supply Chain


A Business Continuity Risk


Functional Excellence Is Not the Answer


Our Belief

A Supply Chain Is a Complex System

with Complex Processes with Increasing Complexity


Do you manage the supply chain as a system?

a) Yes, we holistically manage metrics

b) We try, but there are constant distractions

c) No, we manage metrics in isolation

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Desired Corporate Performance

• Resilient and predictable

• Balanced across the set of metrics to maximize value

• Showing year-over-year strength against peer group


A Balancing Act


The Supply Chain Effective Frontier

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


A Project Approach Does Not Work


Companies Get More Serious with a Recession


Correlations to Market Capitalization


The Promise


Orbit Chart: Walmart (Inventory Turns Vs. Operating Margin)


Orbit Chart: Apple (Inventory Turns Vs. Operating Margin)


Orbit Chart: Dow Chemical (Inventory Turns Vs. Operating Margin)


Orbit Chart: Procter & Gamble (Inventory Turns Vs. Operating Margin)


Orbit Chart: Mattel, Inc. (Inventory Turns Vs. Operating Margin)


Overall Network: Inventory Turns Vs. Operating Margin (2006-13)


Supply Chain Metrics That Matter Reports


Our Answer? For Supply Chain Excellence?


Supply Chain Index: A Measure of Supply Chain Improvement

Overall Ranking per Company• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory• Strength: Inventory Turns & Operating Margin Vector Trajectory• Resiliency: Inventory Turns & Operating Margin Mean Distance

A new way to measure relative supply chain performance by industry, based on the components of balance, strength and resiliency.


Mining 20 Years of Financial Data


Supply Chain Index: A Measure of Supply Chain Improvement


Supply Chain Index Ranking Table


Supply Chain Industry Performance Factors


What Is Resiliency?

Resiliency =Tightness of the pattern on the orbit chart for operating margin and inventory turns


Resiliency 2000-2012


BEST PRACTICES


EMERGINGPRACTICES


IMAGINE


Changing the Paradigms

Traditional Approach What Works

Best Practices Redefinition of the Organization

A Project-based Approach Alignment

The Forecast is Demand Planning

Vertical Excellence Design

Transactional Efficiency Clear Operating Strategy

Throwing the Supply Chain Out of Balance A Balanced Portfolio of Metrics


Sales-Operations Team Alignment Drives Better Inventory Turns


End-to-End Reporting Improves Resiliency


Supply Chains to Admire


Supply Chain Excellence

• Supply chain excellence happens with consistent, balanced and focused leadership.

• Complexity requires consistent management. The organization has good and bad complexity that eats away at the Effective Frontier.

• It is a journey, not a sprint, requiring focus over time.


Annual Event: Same Time, Same Place


Meet the Supply Chain Insights Team

Regina Denman Client Services Director

Naomi Frye Client Services Manager

Jill Smith Operations Manager

Heather Hart Research Director

Abby Mayer Research Associate

Michael Hambrick System Administrator


Keynote Sponsors Broadcast Sponsors

Shaman’s Circle Reception Opening Reception Day One Reception

Afternoon Breaks Pre/Post Event Webinars

Golf Outing 5K Run Book Giveaway

General Sponsors

Thank You to Our Sponsors


Financial Benchmarking Form