Green Supply Chain Survey: Summary Charts (Jan-Feb 2013)

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Summary charts from Supply Chain Insights' latest survey research on the Green Supply Chain. A key finding is that while most companies leverage being green for brand awareness and lack true sustainability goals in their value chain.

Business

Green Supply
Chain Study
Summary Charts
Jan-Feb 2013

Agenda

Supply Chain Insights LLC Copyright © 2013, p. 2

Study Overview

Supply Chain Insights LLC Copyright © 2013, p. 3

Respondents Are Primarily Manufacturers, with $5B+
Revenue, from Discrete and Process Industries

Supply Chain Insights LLC Copyright © 2013, p. 4

Respondents Are Split Between Supply Chain
and Corporate Social Responsibility Focus

Supply Chain Insights LLC Copyright © 2013, p. 5

Agenda

Supply Chain Insights LLC Copyright © 2013, p. 6

Sustainability Is Not a Top Supply Chain Pain for
Either CSR or Supply Chain Teams

Supply Chain Insights LLC Copyright © 2013, p. 7

Nearly All Respondents Publicly Communicate
Goals; Two-Thirds Have Had Goals for 5+ Years

Supply Chain Insights LLC Copyright © 2013, p. 8

Over Half Set Sustainability Goals for Supply/Value
Network; Nearly Half Set and Plan Goals Globally

Supply Chain Insights LLC Copyright © 2013, p. 9

CSR & Supply Chain Alike See Company As
Performing BETTER than Peers

Supply Chain Insights LLC Copyright © 2013, p. 10

Agenda

Supply Chain Insights LLC Copyright © 2013, p. 11

Energy Usage and Waste Reduction Are Among the
Most Common, Important, Performing
and Trackable Elements

Supply Chain Insights LLC Copyright © 2013, p. 12

Energy Usage, Waste Reduction, Carbon Footprint &
Water Usage Are Most Common Goals

Supply Chain Insights LLC Copyright © 2013, p. 13

Energy Usage Is the Most Important Element of
Sustainability Goals Can’t show
importance or
performance or
ease of tracking
CSR vs. SC b/c
of small sample
sizes

Supply Chain Insights LLC Copyright © 2013, p. 14

Energy Usage, Recycled Content and Waste
Reduction Are Top Performing Against Goals

Supply Chain Insights LLC Copyright © 2013, p. 15

Carbon Footprint and Water Usage Show Largest
Gaps in Performance vs. Importance

Supply Chain Insights LLC Copyright © 2013, p. 16

Carbon Footprint and Water Usage Are Important
Elements With Lower Than Average Performance
Same as
previous,
shown
now as
map

Supply Chain Insights LLC Copyright © 2013, p. 17

Energy Usage Is the Easiest Element to Track in
Terms of Progress

Supply Chain Insights LLC Copyright © 2013, p. 18

Agenda

Supply Chain Insights LLC Copyright © 2013, p. 20

Sustainability Team Understands Supply Chain
Better Than Supply Chain Team Understands
Sustainability

Supply Chain Insights LLC Copyright © 2013, p. 21

Supply Chain Team in Particular Reports
Sustainability Understands Supply Chain Better

Supply Chain Insights LLC Copyright © 2013, p. 22

CSR and Supply Chain Teams Agree That Supply
Chain Goals Typically Come Before Sustainability

Supply Chain Insights LLC Copyright © 2013, p. 23

Supplier Accountability Policies Is Best
Technique for Meeting Sustainability Goals

Supply Chain Insights LLC Copyright © 2013, p. 24

3rd Party Audits Are Seen As More Effective by
Supply Chain Than CSR

Supply Chain Insights LLC Copyright © 2013, p. 25

Unilever and Starbucks Stand Out for CSR Excellence vs.
Supply Chain; Wal-Mart, P&G and Apple Stand Out for
Supply Chain Excellence

Supply Chain Insights LLC Copyright © 2013, p. 26

CSR and Supply Chain Teams Generally Agree
on Top Companies for CSR Excellence

Supply Chain Insights LLC Copyright © 2013, p. 27

Supply Chain Teams More Likely Than CSR to
Cite Apple and Dell for Supply Chain Excellence

Supply Chain Insights LLC Copyright © 2013, p. 28

Nearly All Have Sustainability
and Supply Chain Organizations;
Nearly 2/3 Have Person Dedicated to Sustainability

Supply Chain Insights LLC Copyright © 2013, p. 29

Supply Chain Planning Is Most Common Function
Reporting to Supply Chain Organization

Supply Chain Insights LLC Copyright © 2013, p. 30

Sustainability Reports Most to CEO & EHS;
Supply Chain Reports Most to COO & SC Leader

Supply Chain Insights LLC Copyright © 2013, p. 31

CSR Team:
Supply Chain Challenges Related to Sustainability

Supply Chain Insights LLC Copyright © 2013, p. 32

Supply Chain Team:
Supply Chain Challenges Related to Sustainability

Supply Chain Insights LLC Copyright © 2013, p. 33

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For the purposes of this report, downstream data is defined as data that originates downstream on the demand side of the value chain. It can include point-of-sale data, T-log data, distributor data, social and unstructured data sources, retail withdrawal data and retail forecasts. Integrated demand signal management is the use of this data in a more holistic and integrated demand management process. The use of channel data is evolving and this report is designed to give the industry an update on progress. Data for this report is based on two inputs: quantitative survey data from twenty-nine respondents (manufacturers) that use downstream data for integrated demand signal management, and qualitative input from attendees at an Integrated Demand Signal Management event that was attended by eleven manufacturers and four retailers. Data was collected in the fall of 2012. While the study demographic is a small number, the respondents represent an experienced panel group. In the study, 90% of the respondents were using downstream data. The average time of usage is four years.

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Report Details: The research for this report was conducted via an online survey from October 24 – December 12, 2017. Surveys were conducted among a mix of business users (manufacturers, retailers, and wholesalers/distributors/co-operatives, n=56) and vendors (software providers, consultants, and third-party logistics providers, n=53), and others (academics, analysts, unemployed, and others, n=28). The analysis focuses primarily on users and vendors. All respondents were required to be at least a little familiar with analytics strategies. Objective: To understand current analytics strategies and where companies are investing. NOTE: analytics strategies (technologies and tactics) include the Internet of Things (IoT), cognitive computing, Hadoop, Blockchain, data visualization, text mining, data lakes, software robots, unstructured data mining, sentiment analysis, and drones, etc. Highlight: New forms of analytics offer great potential and opportunities. The greatest value will happen when companies consciously test and learn and redefine processes based on new capabilities. Core to this journey is the alignment of IT and business with a focus on value and business outcomes.

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This report is based on analysis of financial balance sheet and income statement data for the period of 2000-2012, quantitative survey research results, and interactions with clients in various industries in supply chain strategy sessions. We examine the performance of companies in a cross-section of industries on various metrics. We find that most companies and most industries are stuck in an environment of low results, with the exception of the hi-tech & electronics industry. Finally, we offer our perspective and advice on advancing supply chain excellence and moving the needle for better supply chain performance across company and industry lines. Highlights • A project-based approach has failed. Our gains are much lower than we believed in inventory management and a long-term perspective is needed to drive permanent and sustainable improvements. • The hi-tech industry is the only of the six industries profiled to drive sustained gains across most metrics considered during the time period. • The definition of supply chain excellence is still evolving as companies move through different maturity stages. Industrial and pharmaceutical companies are mainly stuck at low levels of maturity and could benefit greatly from applying lessons learned in other industries to their own supply chains. Research Results Full report

What Drives Supply Chain Excellence? A Look Back and a Look Forward

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Executive Overview Globalization. Compliance. Risk Management. Corporate Social Responsibility (CSR). Patient outcomes. Over the last decade the number and variety of supply chain initiatives exploded for the medical device leader. As a result, the supply chain group, and the related business imperatives, grew in importance. Overall the medical device supply chain fared better through the decade than other industries, despite the fact that they are smaller, more focused companies trying to become global. (see Table C in the appendix for company size). On average the industry performance on operating margin and inventory turns was better in 2006 than 2015. The reason? The medical device supply chain entered the decade as a supply chain laggard. Through focused supply chain programs they were able to catch up to the level of other industries. Table 6. Industry Snapshot of Performance We hope this report can be a guide to help companies understand what is possible, and how supply chain metrics drive value. In the medical device industry we find most companies to be stuck. They have either regressed in supply chain performance or they are at the same point they were a decade ago. For many supply chain leaders that attend conferences, this may seem unfathomable. There is an industry belief that companies have implemented new technologies, and evolved processes, and driven improved balance sheet results. The goal of this report is to enable benchmarking and to spark a new conversation on the definition of supply chain excellence.

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For the purpose of this report, transportation management is defined as technologies that automate and improve decision making in domestic and international logistics. This report is based on a quantitative study conducted between August 16th, 2012 and October 9th, 2012. The summary reflects responses from 75 respondents from 55 companies active in transportation freight decisions. The goal of the study was to understand how business complexity and maturity have affected the deployment and development of supply chain technologies to improve transportation management. The study contrasts the views of line-of-business transportation solution users and providers of the technologies. The quantitative study results are enriched with insights from Supply Chain Insights’ work on supply chain ratios and interviews with business leaders to validate and clarify the results.

State of Transportation: Where Are We on the Vision of Automation? - 7 NOV 2012

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Executive Overview Growth is stalled. Margin pressure is high. Shorter life cycles, as well as increasing compliance and regulatory pressure, provide additional challenges to the contract manufacturing industry. Finally, excess capacity is a significant problem. Is this a recipe for opportunity or a disaster for the brand owner using outsourced manufacturing partners? We think the latter. Over the last decade, brand owners from consumer electronics to medical devices have grown more dependent on outsourced contract manufacturing. In fact, the contract manufacturing industry grew up out of a desire to mitigate risk and improve costs for brand owners. However, the market has shifted significantly in recent years and the contract manufacturing industry is struggling. As a result, they pose a risk to brand owners. In this report, we illustrate how the lack of resiliency affecting contract manufacturers represents a serious risk to brand owners and offer advice on what can be done to mitigate the problem. Over the last decade, many contract manufacturers have attempted to differentiate services and refine their business model to gain competitive advantage. However, in looking at the financial results, we find that most companies are struggling. As a result, it is time to redesign the business model and relationships of contract manufacturers and brand owners. While companies can outsource the role of manufacturing, they cannot outsource the responsibility of managing the extended supplier network. This is one of the many challenges the industry now faces.

Supply Chain Metrics That Matter - A Focus on Contract Manufacturing - 13 AUG...

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Executive Summary: Current State of Food and Beverage Industries Over the last decade, consumer confidence in the food and beverage industry supply chains has waned. Shopper distrust is high; and as a result, growth in many categories like carbonated beverages and cereals declined. While these two industries have similarities, there are different underlying dynamics in business drivers. The potential of the food supply chain is different than that of beverage. As a result, in this report, we share information on the two industries separately. For both industries, the last decade was a tough market. Despite attempts to stimulate demand through trade programs, new product launch, and product expansion into new continents, growth declined. In 2003-2006, growth in the food industry was 7% while in 2011-2014, year-over growth was 4%. In parallel, in 2003-2006, growth in the beverage industry was 22%; yet, in 2011-2014, it was 7%. As growth declined, supply chain maturity mattered more than ever. Most companies were not equal to the challenge. Traditional marketing tactics are not as effective in these two industries as they were a decade ago. To try to stimulate growth, 33% new items were introduced into the retail chain from these two industries. This rise in complexity reduced the effectiveness of the supply chain at a time of declining volumes. In Table 4, we profile the results in the food industry, while in Table 5 we portray the trends in the beverage industry. In both industries, operating margin declined despite improved productivity in revenue per employee. In parallel, despite multiple investments in technologies, inventory turns declined in the food industry. Companies were unable to balance metrics in times of declining volumes. The reason? Rising commodity costs and the slow development of supply chain skills. Companies that did the best in driving improvement in key metrics in times of declining volumes have seven characteristics: core competency in network design; strong capabilities in transportation management; a focus on inventory management; use of more advanced forms of supply chain planning; balance and understanding of the trade-offs of volume, price and mix; use of channel data; and continuity of leadership. Table 4. Progress on the Effective Frontier for Food Companies Table 5. Progress on the Effective Frontier for Beverage Companies When we compiled the Supply Chains to Admire Report in August 2014, two food and beverage companies—General Mills and ABInBev—made the list. To make the list, a company had to deliver performance (posting above-average results for the period of 2009-2013 when compared to their peer group on a portfolio of metrics including operating margin, inventory turns and Return on Invested Capital). They also had to drive supply chain improvement (based on the Supply Chain Index as defined in the Research Methodology section) faster than their peer group. We believe b

Supply Chain Metrics That Matter: A Focus on Food and Beverage Companies - 2015

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Now in its fourth year, Supply Chain Insights analyzes levels of supply chain performance and improvement for all retail, manufacturing and distribution peer group. The goal of this work is threefold: to help supply chain leaders set realistic supply chain goals; provide industry benchmarks for gauging progress; and recognize companies achieving higher levels of supply chain excellence. Here we share the results of winners and background on the analysis.

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Executive Overview Retail scorecards are now more than a decade old. The companies in this study had an average of more than five years of experience using retail scorecards. Buyers and suppliers now manage multiple scorecards simultaneously (in the same relationship) in trading partner communications. The most common scorecards are focused in the areas of supply chain. As with any relationship, there is always a carrot and a stick. A carrot, or an incentive to do better, is a positive reward system given to affirm good behavior; while a stick is a punitive action for an unwanted behavior. Today, in the administration of retail scorecards, they are more focused on deductions and the withholding of payment. The primary value of the retail scorecard is the improvement of on-time and in-full shipments. Both parties have the opportunity to use the scorecard to improve assortment and reduce total costs. Today, these opportunities are aspirational. Here we share the insights from the study and end with recommendations for both trading partners.

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Executive Overview Supply chain performance matters. It can make or break corporate performance. Now 30-years old, the practice of supply chain management is still evolving. While companies speak of best practices, and boast about improvements in operating margin, inventory levels and asset management in conference after conference, we do not see it in our analysis of balance sheet information for any industry. By their nature, supply chain leaders are competitive. They want to drive performance improvements and increase corporate value. Their goal is to outpace competitors. The rate of business change is intense and the personal stakes are high. Day after day, leaders must answer questions like, “Which path should I to take? What are the best technologies to use? What is an acceptable rate of performance? How am I doing against my peer group? And, what can I learn from others that I can use to improve the performance of my own operation?” Until the development of the Supply Chain Index by Supply Chain Insights, there was no independent and objective data-driven methodology that could answer these questions. With the development of this methodology, there now is a way to gauge improvement. While it is easy to say the term supply chain excellence, it is difficult to define. Many people think that they know the definition, but there is no agreed-upon standard. The lack of a clear definition, and a methodology to measure improvement, makes progress hard to quantify and track. The Supply Chain Index is designed to help. It is an objective measurement of supply chain improvement. It enables the comparison of companies’ progress within a peer group for a given time period. The Index is based upon financial performance of companies on four metrics integral to supply chain operations: Year-over-Year Revenue Growth, Return on Invested Capital, Inventory Turns, and Operating Margin. In building the Supply Chain Index, we had three goals: 1. Quantify Levels of Supply Chain Improvement. The Index is a composite metric based on the calculation of balance, strength and resiliency factors for a given time period. Each factor is measuring the pattern of performance over time. In the analysis, there is an underlying assumption that the companies that can sustain the best improvement in these three areas are driving the highest rates of supply chain improvement. The input metrics of Year-over-Year Revenue Growth, Return on Invested Capital, Inventory Turns, and Operating Margin were selected in part due to their high correlation to market capitalization. 2. Bridge the Gap between Finance and Supply Chain. Our second goal is to bridge the gap between the supply chain organization and the financial team...

The Supply Chain Index: Evaluating the Industrial Value Network - 18 AUG 2014

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The Supply Chains to Admire™ analysis is an annual study of supply chain excellence. Now in its fifth year of development, the focus of this research is to better understand supply chain performance and improvement of 655 publicly held companies in 28 peer groups for the period of 2010-2017. This year there are 31 winners! At the 2018 Supply Chain Insights Global Summit, winners from the analysis will share insights on driving supply chain excellence.

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S&OP Study Prelim Summary Charts used in the Why Is S&OP So Hard? report Executive Overview Sales and Operations Planning (S&OP), the cross-functional process to align the commercial processes of sales and marketing with the operational processes of supply and manufacturing, is having a renaissance. It is not a new process. Companies have worked on these processes for over 35 years; but today, only one out of two companies believes that their processes are effective. Why is it so hard? Answering this question is the goal of this report. Figure 3. Sales & Operations Planning Process Overview A mature S&OP process improves organizational agility and alignment; but, this requires focus and clear leadership over a period of at least three to five years. A higher level of success happens when the S&OP processes report to a profit center manager and decision making is aligned to the commercial processes. With one in two companies aligning S&OP to product line production, not to commercial processes, it is difficult to drive maturity. Ideally, the leader of the S&OP process understands both the commercial drivers, and the supply constraints, and can make the pivot; but this is seldom the reality. Today, due to popularity, companies have more than one S&OP process. In this research, a multinational company will have four to six separate and distinct S&OP processes with different maturity levels. While many will try to drive improvements with big technology initiatives, based on a decade of research on the topic, we recommend starting by tackling the change management issues. In this report, we share five barriers, and four misconceptions while giving supporting research to challenge change in the organization.

S&OP 2015 Preliminary Summary Charts

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Report Details: This report is based on survey research, financial analysis, and discussions with manufacturers attempting to gain first-mover advantage. Highlight: Digital innovation needs to be focused on ‘test and learn.’ The convergence of new technologies to redefine the atoms and electrons of the supply chain is quite promising, but there needs to be alignment. Read the report for nine insights on how to move forward.

Building a Digital Supply Chain - report - 9 APR 2018

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Executive Overview Growth is slowing and the complexity in today’s supply chain is unprecedented. No two centers of excellence are the same, and no two supply chains are alike. There are different drivers and obstacles to building and running a Center of Excellence. However, if done right, the organization rates itself as more aligned, proactive and agile. The high-level results from our study are shown in Figure 2. Figure 2. Centers of Excellence Infographic Based on our qualitative interviews with clients, we find that these seven drivers to build a Center of Excellence: • Increase in the Importance of Supply Chain Management. As growth slows, and the global multinational organization matures, more and more companies are interested in driving supply chain excellence. The reasons are many; but, at the top of the list is improving reliability in the face of volatility. How so? Demand volatility is increasing and supplier viability is growing more fragile. Driving reliability in global operations in the face of these challenges is fundamental to defining and executing supply chain excellence. • Building of Global Teams and the Development of Supply Chain Talent. With the shortage of students from academia, and the retirement of the first- and second-generation supply chain pioneers, more and more companies are developing and executing programs to build supply chain talent. There is a shortage of mid-management talent with pressure on planning job retention. There is a limited supply of supply chain knowledge workers: leaders that are technologically savvy, analytical problem solvers, and astute in business processes. • Continuation of Work on Enterprise Resource Planning (ERP). When companies complete a large ERP project, there is a strong impetus to get the value from the investment and ensure technology usage. The focus of the Center of Excellence often becomes an extension of the global implementation team. • Metrics and Implementation of Analytics. While the management of supply chain excellence sounds easy, it is not. The management of order-to-cash and procure-to-pay processes and the supply chain execution processes are easier because they are well-defined. Most companies struggle with the definition of planning and the use of new forms of analytics. • Network Design and the Orchestration of Flows. Most companies start on their supply chain design journey to save costs in logistics. With the increasing cost of transportation, and the fragility of freight networks, network design for transportation and logistics networks is paramount. One client likened it to “minting money.” • Testing of New Technologies. Cloud technologies. Supply chain operating networks. The Internet of Things. 3D Printing. New forms of analytics. The list of technology and process disruptors could go on and on. While most companies feel stuck in their existing, and more traditional, processes they want to understand and explore technology

Driving Supply Chain Excellence Report -18 June 2015

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Executive Summary As growth slows, manufacturing companies struggle with rising complexity and increasing levels of demand error. The question is “Could companies decrease complexity and improve growth by building outside-in processes that are customer-centric?” We believe the answer to this question is a resounding “YES!” However, there is a problem. Across the industry there is no common definition of customer-centric supply chains. There is no clear and accepted methodology to build this core competency. As a result, most companies have forged their own paths. In this study, 80% of those surveyed have a customer-centric strategy; yet over half (54%) state that there is room for improvement to drive performance changes in their supply chain. Companies struggle to drive alignment and build constancy of purpose. The goal of this report is to fill this gap. State of the Industry Today 46% of respondents rate their supply chain as performing well on the delivery of a customer-centric supply chain strategy. The definition of a customer-centric supply chain used for this research is: one that is aligned with order management, product strategies and distribution processes to deliver/adapt to against customer segmentation strategies.

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Over the last decade, as shown in figure 1, the hospital supply chain has been one of the few that has improved operating margin, reduced inventory and improved revenue/employee. In contrast, the manufacturing suppliers to the hospital organization have grown inventories and struggled to preserve margins. Across the value chain from the patient to the raw material suppliers, total inventories have grown and costs have escalated. With pending regulations, hospitals are being forced to rethink processes, redefine value and work more holistically to improve sourcing practices. The suppliers to the hospital systems are having to rethink their systems to rethink the customer (from selling to the physician to selling to a more formal buying organization based on patient outcomes) and adapt to the new processes within the hospital for value analysis. Supply chain processes within the hospitals have matured. Hospitals have made more progress on improving cash-to-cash cycles than their upstream manufacturing trading partners. They have reduced inventories and attempted to work with suppliers. As shown in figure 2, it is notable to see that this industry is one of the few where downstream trading partners have actually improved payable terms for their suppliers. The future lies before the healthcare provider. As the provider of patient care, they have the greatest potential to lead in the healthcare value chain’s redesign to improve value. They have come a long way, but the changes have been incremental. They have focused primarily on traditional sourcing techniques; not a redesign of the healthcare value chain from the outside in, and the redefinition of complex and antiquated processes.

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Executive Overview Today data is everywhere: but, nowhere. The world’s per capita capacity to store information has doubled every 40 months since the 1980s; and as of 2012, every day globally, 2.5 exabytes of data are created . As a result, social and customer data piles on the doorstep of the corporation, and operational data sits in the creases and cracks between functions. While many companies invested in data warehouse technologies and advanced applications for optimization, a common complaint in qualitative interviews with business leaders is “I cannot get to my data.” One business leader likened it to a Hotel California where, “The data checks into the system, but does not check out.” In most companies with heterogeneous information technology landscapes, simple reporting is still a major problem. In the face of growing data, companies struggle with the basics. The question is, “Why pursue a big data and analytics strategy if the company cannot do basis reporting?” No doubt about it, the current state of analytics is a barrier to building supply chain excellence. It is hard to have a data-driven discussion if you can’t get access to data.

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