Download - Supply Chain Metrics That Matter
Supply Chain MattersUnderstanding the Link between Supply
Chain and Corporate PerformanceWebinar: August 30, 2013
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Presenters
Lora CecereFounder and CEO,
Supply Chain Insights
Philippe LambotteSVP Supply Chain
Merck
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Supply Chain Insights is focused on delivering independent, actionable and objective 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.
About Us
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This is the new bible for all supply chain executives. It provides an insider’s perspective that will prove incredibly valuable to even the most grizzled supply chain veteran. This is the next must-have business book.
--Bruce Richardson, Chief Enterprise Strategist, Salesforce.com
Today, the worlds of social business and supply chain management have many degrees of separation. I enjoyed working with Lora to understand what the future transformation of digital marketing to digital business could look like.
--Jeremiah Owyang, Research Director, Altimeter
Second Printing of Bricks Matter: 16 Five-Star Reviews on Amazon
The book can be ordered from Amazon.com in hardcopy or digital format
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2014 Publication
A Review of Progress of Industries on the Supply Chain Effective Frontier and the Supply Chain Index
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18 Reports in 2012
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19 Reports So Far for 2013
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Need for Strategy
Supply chain strategy
Business StrategyWhat are the right things to do to increase company value?
Value-network Supply Chain StrategyWhat are the right ways to support the business strategy?
What are the right trade-offs between value drivers for each value network?
Right productplatforms
Design the supply
response
Build organizational systems and
manage talent
Align supply relationships
Align demandrelationships
Effective Supply Networks
Execution of buy-side strategies
Continuous Improvement
Capabilities RequiredSupply Chain
Network Design
Design Networks
Innovation Methodologies
Demand Networks
Joint Value Creation Strategies
Business ProcessHow do I do the right things right?
Source: Supply Chain Insights, LLC
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Metrics That Matter
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Industry Averages
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What Is Best in Class?
Perform better than peer group
Improve year-over-year results
Align internally on metrics
Deliver against the business strategy
Demonstrate consistency in results
Use innovation in supply chain processes
Balance. Be leaders in managing trade-offs
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The Supply Chain Effective Frontier
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Definitions
• Supply Chain Index: A formulaic representation of supply chain financial ratios correlated to stock market capitalization valuation.
• Supply Chain Effective Frontier: The balance of growth, profitability, cycle and complexity metrics to deliver the supply chain strategy. It may or may not maximize the company’s market valuation.
• Supply Chain Excellence: The behavior of companies working to maximize value through the setting of targets for supply chain financial ratios and aligning metrics that matter (tied to value chain strategy).
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Connecting Supply Chain Financial Ratios to Corporate Performance
Financial Metrics
Growth Profitability Cycle ComplexityCommon Shares Cash Cash-to-Cash Cycle Altman Z
Employee Growth Cash Change in Period Days of Finished Goods Capital Turnover
Employees Cash on Hand Days of Inventory Current Ratio
Market Capitalization Cash Ratio TTM Days of Payables Outstanding Quick Ratio
R&D Margin Cash Ratio Quarter Days of Raw Materials Return on Assets
R&D Ratio Cash Ratio Year Days of Sales Outstanding Return on Equity
R&D to COGS Ratio Cost of Goods Sold Days of Work in Progress Return on Invested Capital
Revenue EBITDA DPO/DSO Return on Net Assets
Revenue Growth Free Cash Flow Ratio Finished Goods Inventory Revenue per Employee
Revenue Growth TTM Gross Margin Inventory Working Capital Ratio
Revenue TTM Gross Profit Inventory Turns
SG&A Margin Net Profit Margin Receivables Turns
SG&A Ratio Operating Cash Flow Ratio Raw Materials Inventory
SG&A to COGS Ratio Operating Margin Work in Progress Inventory
OPEX Ratio
Pretax Margin
Source: Supply Chain Insights LLC
Selected Ratios
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Introducing the Supply Chain Index
A formulaic representation of how companies are trading off growth, profitability, cycle and
complexity performance on selected supply chain financial
metrics against market valuation.
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Y-Intercept & Value
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A Look at History: Progress in Productivity in Manufacturing
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A Look at History: Progress in Productivity in Retail
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Beverage
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Cereal
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Consumer Products
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Consumer Products: A Different Strategy
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Bristol-Myers Squibb and Merck
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Corporate Summary
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Metrics Included for Comparison
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Cash-to-Cash Cycle vs. Inventory Turns (2000-2012)
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Inventory Turns vs. Revenue per Employee (2002-2012)
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Inventory Turns vs. Operating Margin (2000-2012)
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Average Performance
Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012
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Kraft Foods Inc. & Nestlé S.A.
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Corporate Summary
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Metrics Included for Comparison
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Cash-to-Cash Cycle vs. Inventory Turns (2000-2011)
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Inventory Turns vs. Revenue per Employee (2000-2012)
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Inventory Turns vs. Operating Margin (2000-2012)
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Average Performance
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Summary
• Supply chain matters.• Have self-awareness. Keep a long-term
perspective. Eliminate the white noise.• Understand the potential. Drive
leadership in making trade-offs.
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Join Us!
www.supplychaininsightsglobalsummit.com
#sciwebinar
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Upcoming Corporate Training Chicago, Illinois and Atlanta, Georgia
www.supplychaininsights.com/training
#sciwebinar
November 11-12, 2013Chicago Illinois USA
January 16-17, 2014Atlanta, Georgia USA
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PAST WEBINARS: ON DEMAND• From August 2013 Supply Chain Talent, The
Missing Link
• From July 2013: What is the Role of the Store
• From June 2013: Big Insights From Big Data
Our Webinar Series
www.supplychaininsights.com/upcoming-webinars
UPCOMING WEBINARS• September 26, 2013 Post Global Summit Recap:
Hear from Guest Panelists
• October 10, 2013 Metrics That Matter
• November 14, 2013 Healthcare Value Chain
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Get Custom Financial Benchmarking
www.supplychaininsights.com/custom-benchmarking
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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. #sciwebinar
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Where Do You Find Lora?
Contact Information: [email protected]
Blog: www.supplychainshaman.com (4000 pageviews/month)
Twitter: lcecere 3850 followers. Rated as a top rated supply chain social network user.
LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (3750 in the network)
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