Supply Chain Index work for the periods of 2006-2012 and 2009-2012. In this deck, we share the background on the Supply Chain Index, and the performance of companies by industry on the Effective Frontier. The measurements used to evaluate balance, alignment and resiliency are year-over-year growth, Return on Invested Capital (ROIC), operating margin and inventory turns. The concept is that supply chain leaders need to drive year-over-year improvements that are balanced, aligned and reliable against their peer groups. The Supply Chain Index allows companies to compare themselves against tailored peer groups and over different time frames to understand how they are improving on the Effective Frontier of Supply Chain Performance.

1. Consumer Value Networks:
How Do You Measure UP?
The Supply Chain Index
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2. Supply Chain Insights LLC Copyright © 2014, p. 2
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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3. Supply Chain Insights LLC Copyright © 2014, p. 3
Presenters
Abby Mayer
Research Associate
Lora Cecere
Founder and CEO
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Dr. George Runger
Professor, CIDSE, ASU

4. Supply Chain Insights LLC Copyright © 2014, p. 4
Agenda
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5. Supply Chain Insights LLC Copyright © 2014, p. 5
To develop a methodology to help supply chain leaders define supply
chain improvement. To be effective, it had to:
• Evaluate progress over time by peer group.
• Be objective and data driven.
• Compare progress of companies across currencies.
• Enable the comparison of progress of companies regardless of size:
very large to mid-market companies.
• Connect supply chain performance to corporate performance.
• Use standardized, and available data.
Our Vision

6. Supply Chain Insights LLC Copyright © 2014, p. 6
Today’s Supply Chain
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7. Supply Chain Insights LLC Copyright © 2014, p. 7
Supply Chain Risk
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8. Supply Chain Insights LLC Copyright © 2014, p. 8
A Supply Chain
is a Complex System
with Complex
Processes
with Increasing
Complexity
Our Belief
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9. Supply Chain Insights LLC Copyright © 2014, p. 9
 Resilient and predictable
 Balanced across the set of metrics
to maximize value
 Showing year-over-year strength
against peer group
Desired Corporate Performance
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10. Supply Chain Insights LLC Copyright © 2014, p. 10
The Supply Chain Effective Frontier:
First Representation
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11. Supply Chain Insights LLC Copyright © 2014, p. 11
While we like this framework, there is no good
source of consistent and accurate data for:
– Forecast Accuracy
– Case Fill Rate
– Corporate Social Responsibility
Problem with this Framework
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12. Supply Chain Insights LLC Copyright © 2014, p. 12
The Supply Chain Effective Frontier:
Second Representation
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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.

13. Supply Chain Insights LLC Copyright © 2014, p. 13
Industry Overview: 2006-2012
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14. Supply Chain Insights LLC Copyright © 2014, p. 14
Intersection of Operating Margin and
Inventory Turns
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15. Supply Chain Insights LLC Copyright © 2014, p. 15
Companies Get More Serious
With A Recession
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16. Supply Chain Insights LLC Copyright © 2014, p. 16
Agenda
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17. Supply Chain Insights LLC Copyright © 2014, p. 17
Mining 20 Years of Financial Data
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18. Supply Chain Insights LLC Copyright © 2014, p. 18
Correlations to Market Capitalization
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19. Supply Chain Insights LLC Copyright © 2014, p. 19
How to Read an Orbit Chart
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20. Supply Chain Insights LLC Copyright © 2014, p. 20
Supply Chain Metrics That Matter Reports
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21. Supply Chain Insights LLC Copyright © 2014, p. 21
Agenda
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22. Supply Chain Insights LLC Copyright © 2014, p. 22
Supply Chain Metrics That Matter Reports
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What is Resiliency?
Tightness of the Pattern
on the Orbit Chart for
Operating Margin and
Inventory Turns

23. Supply Chain Insights LLC Copyright © 2014, p. 23
Resiliency 2000-2012
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24. Supply Chain Insights LLC Copyright © 2014, p. 24
Agenda
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25. Supply Chain Insights LLC Copyright © 2014, p. 25
Overall Ranking per Company
• 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%)
• Peer: Peer Rankings by Industry (10%)
The Supply Chain Index
A new way to measure relative
supply chain performance by
industry, based on 4 components:
balance, strength, resiliency and
peer rankings.
Supply Chain Index: A Measure of Supply
Chain Improvement
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26. Supply Chain Insights LLC Copyright © 2014, p. 26
The Index Framework
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27. Supply Chain Insights LLC Copyright © 2014, p. 27
Supply Chain Index
30% 30% 30% 10%
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What is the right weighting?
What is the right time period?

28. Supply Chain Insights LLC Copyright © 2014, p. 28
An exclusive, invitation-only group
of senior supply chain leaders
(330 at present):
• Two private networking events/year
• One-on-one networking as needed
• Invitations to rank companies for the
Supply Chain Index (one per company)
• Monthly calls on specific topics
Shaman’s Circle

29. Retail

30. Supply Chain Insights LLC Copyright © 2014, p. 30
Supply Chain Index: Retail
2006-2012
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31. Supply Chain Insights LLC Copyright © 2014, p. 31
Wal-Mart and Target
(2000-2012)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012
2000
2012
2000
2012
5
6
7
8
9
10
0.05 0.06 0.07 0.08
InventoryTurns
Operating Margin
Target Corporation Wal-Mart Stores, Inc.
Best Scenario
TGT
0.06, 6.2
WMT
0.06, 7.8
Average (Operating Margin, Inventory Turns)

32. Supply Chain Insights LLC Copyright © 2014, p. 32
CVS and Walgreens
2000-2012

33. Supply Chain Insights LLC Copyright © 2014, p. 33
Retail Index:
2009-2012

34. Supply Chain Insights LLC Copyright © 2014, p. 34
• Drug channel rises.
• Kroger and Target make progress. Sainsbury and Costco fall.
Retail Summary

35. Consumer Packaged Goods

36. Supply Chain Insights LLC Copyright © 2014, p. 36
Supply Chain Index: Consumer Products
2006-2012
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37. Supply Chain Insights LLC Copyright © 2014, p. 37
Colgate and P&G
(2000-2012)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012
2000
2012
2000
2012
4
5
6
7
0.10 0.15 0.20 0.25
InventoryTurns
Operating Margin
Colgate-Palmolive Company Procter & Gamble Company
Best Scenario
CL
0.21, 5.7
PG
0.18, 5.7
Average (Operating Margin, Inventory Turns)

38. Supply Chain Insights LLC Copyright © 2014, p. 38
P&G and Unilever
2000-2012

39. Supply Chain Insights LLC Copyright © 2014, p. 39
Supply Chain Index: Consumer Products
2009-2012
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40. Supply Chain Insights LLC Copyright © 2014, p. 40
• Beauty category gains ground. Heavier CPG products lose ground as
the cost of transportation increases.
• L’Oreal, Beiersdorf and Unilever improve. Colgate falls.
Consumer Products Comparison

41. Food and Beverage

42. Supply Chain Insights LLC Copyright © 2014, p. 42
Supply Chain Index: Food and Beverage
2006-2012
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43. Supply Chain Insights LLC Copyright © 2014, p. 43
Campbell Soup and Hershey
(2000-2013)

44. Supply Chain Insights LLC Copyright © 2014, p. 44
General Mills and Kellogg’s
2000-2012

45. Supply Chain Insights LLC Copyright © 2014, p. 45
Supply Chain Index: Food and Beverage
2009-2012
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46. Supply Chain Insights LLC Copyright © 2014, p. 46
• Nestle, Smuckers, PepsiCo, Inbev and Conagra make significant
gains.
• General Mills and Coca-Cola Enterprises fall.
Food and Beverage Comparison

47. Chemical

48. Supply Chain Insights LLC Copyright © 2014, p. 48
Supply Chain Index: Chemical
2006-2012
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49. Supply Chain Insights LLC Copyright © 2014, p. 49
Inventory Turns vs. Operating Margin
(2000-2012)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2000-2012
2000
2012
2000
2012
3
4
5
6
7
8
0.00 0.10 0.20 0.30
InventoryTurns
Operating Margin
BASF SE E. I. du Pont de Nemours and Company
Best Scenario
BAS
0.10, 5.3
DD
0.10, 4.0
Average (Operating Margin, Inventory Turns)

50. Supply Chain Insights LLC Copyright © 2014, p. 50
Supply Chain Index: Chemical
2009-2012
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51. Supply Chain Insights LLC Copyright © 2014, p. 51
• BASF and Dow Chemical move up the stack.
• Dow improves post Rohm and Haas acquisition.
• DuPont, FMC and Ecolab drop in the rankings.
Insights on Chemical

52. Apparel

53. Supply Chain Insights LLC Copyright © 2014, p. 53
Supply Chain Index: Apparel
2006-2012
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54. Supply Chain Insights LLC Copyright © 2014, p. 54
VF and Hanes Brands

55. Supply Chain Insights LLC Copyright © 2014, p. 55
Supply Chain Index: Apparel
2009-2012

56. Supply Chain Insights LLC Copyright © 2014, p. 56
• Hanes, Nike and Columbia Sportswear rise in the ranking. VF falls
due to M&A and coalition rationalization strategies.
Insights on Apparel

57. Supply Chain Insights LLC Copyright © 2014, p. 57
• Retail: Dollar General and Kohl’s
• CPG: L’Oreal, Beiersdorf and Estee Lauder
• Food: Campbell’s, Hershey and Nestle
• Chemical: Lanxess, Monsanto, and BASF
• Apparel: Hanes, Columbia Sportswear and VF
Our Winners Circle

58. Supply Chain Insights LLC Copyright © 2014, p. 58
• Nine out of ten companies are stuck on the Effective Frontier. The
project approach versus a clear operating strategy is detrimental.
• Supply chain resiliency is improving. However, the lack of resiliency of
contract manufacturing and 3PLs should be a risk concern for
manufacturers.
• The Index favors companies with a high ROIC. Companies that have
increased complexity, lost margin and have not more fully utilized
assets are penalized in the rankings.
What Have We Learned?
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59. Supply Chain Insights LLC Copyright © 2014, p. 59
Agenda
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60. Supply Chain Insights LLC Copyright © 2014, p. 60
Next Steps
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• Supply Chain Index Webinars
• July 17- Healthcare Value Network
• August 12- Industrial Value Network
• Monthly Research Reports
• June 17- Consumer Value Network
• July 22- Healthcare Value Network
• August 19- Industrial Value Network
• Final analysis of companies to be revealed at the 2014
Supply Chain Insights Global Summit

61. #sciwebinar

62. Supply Chain Insights LLC Copyright © 2014, p. 62
Annual Event

63. Supply Chain Insights LLC Copyright © 2014, p. 63
Metrics That Matter
• Lora Cecere’s 2nd book:
Metrics That Matter
• To publish in Fall 2014
http://tinyurl.com/metricsthatmatter
Pre-orders available on Amazon:
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64. Supply Chain Insights LLC Copyright © 2014, p. 64
What’s Happening at
Supply Chain Insights?
www.supplychaininsights.com
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65. Supply Chain Insights LLC Copyright © 2014, p. 65
About Lora Cecere
• Founder of Supply Chain Insights
• Invited to be a “LinkedIn Influencer”
• Invited to write a guest blog for Forbes
• Author of 2 books: Bricks Matter (2012) and
Metrics That Matter (to publish Fall of 2014)
• 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.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (6000 pageviews/month)
• Forbes: http://www.forbes.com/search/?q=lora+cecere
• Twitter: lcecere (4800 followers)
• LinkedIn: linkedin.com/pub/lora-cecere/0/196/573 (7000 in the network)
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