Supply Chains to Admire 2015: A Study of Excellence

Supply Chains to Admire™
2015
A Study of Supply Chain Excellence:
Performance and Improvement for the Period of 2006-2014
09/08/2015
Lora Cecere
Founder and CEO
Supply Chain Insights LLC
Regina Denman
Client Services Director
Supply Chain Insights LLC

Contents
Research Overview
Disclosure
Research Methodology
Determination of the Metrics That Matter
Evaluating Supply Chain Performance
Driving Balance
Driving Profitability
Improving Cycles
Managing Complexity
Defining Improvement
Balance
Strength
Resiliency
Evaluating Supply Chain Excellence: Putting It All Together
Executive Summary
Why It Matters
Retail
Mass Merchants and General Merchandise
Grocery Retail
Apparel
Process Industries
Chemical
Consumer Packaged Goods
Beauty
Food Manufacturing
Beverage Production
Packaging
Over-the-Counter Drugs
Pharmaceutical
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Contents
Discrete Manufacturing
Aerospace and Defense
Automotive
Heavy Equipment
Tires
Automotive Suppliers
Consumer Electronics
B2B Electronics
Contract Manufacturing
Semiconductor Manufacturing
Medical Device
What Makes a Difference?
Conclusion
Appendix: Supply Chain Index Calculations
Balance
Strength
Resiliency
Alternative Measures Considered for Resiliency
Formula Calculations
Definitions
Supply Chain Metrics That Matter Reports
About Supply Chain Insights, LLC
About Lora Cecere
Endnotes
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Research Overview
Supply chain excellence is easier to say than to measure. For a supply chain leader, having a clear
definition is the starting point to drive improvement. Without clarity it is very difficult to define an
effective operating strategy. To help supply chain leaders fill this gap, over the course of the past two
years we have studied industry progress on supply chain excellence by analyzing corporate balance
sheet and income statement information for the period of 2006-2014. In this work we have analyzed
patterns of performance and improvement for individual companies, for industries, and for value
networks.
The supply chain is a complex system. Performance is defined by nonlinear relationships between
metrics. When we plot the year-over-year progress of companies, as will be seen, very few
companies have made linear improvements. For most the journey is a gnarly and tangled pattern.
The rhythms and cycles of each industry define the possible band of performance in the critical
supply chain metrics of growth, operating margin, inventory turns, and Return on Invested Capital
(ROIC). A supply chain leader’s goal is to improve the potential of the supply chain within the possible
range for a specific industry.
To determine what is possible, over the course of the past two years we completed deep studies and
published 21 reports to analyze the progress of companies within industry peer groups over time.
These reports, by Supply Chain Insights LLC, were published in a series called Supply Chain Metrics
That Matter™
during the period of August 2012 through August 2015. The observations from these
deep industry-specific studies of supply chain performance helped us to build a methodology to judge
supply chain performance and define supply chain improvement.
While it is easy to measure performance, gauging improvement is more difficult. To accomplish this
goal we needed to define a new methodology. The objective was to develop a methodology that
could be used by all companies, large and small, within an industry peer group for a given time frame.
This led to the building of the Supply Chain Index in 2013. To define the method, we worked with the
team at the Arizona State University School of Computing, Informatics and Decision Systems
Engineering to determine patterns in orbit charts. The Supply Chain Index is a composite metric,
measuring a company’s improvement on balance, strength and resiliency factors within a peer group
for a given time period across a portfolio of metrics.
In this report we analyze the progress of 22 industries. To guide the reader, we group these industries
into three categories: retail, process manufacturing and discrete assembly. The goal of this report is

to identify and celebrate the success of the companies that have excelled in driving both performance
and improvement for the period of 2006-2014.
Disclosure
Your trust is important to us. As such, we are open and transparent about our financial relationships
and our research processes. This independent research is 100% funded by Supply Chain Insights.
These reports are intended for you to read, share, and use to improve your supply chain decisions.
Please share this data freely within your company and across your industry. All we ask for in return is
attribution when you use the materials in this report. We publish under the Creative Commons
License Attribution-Noncommercial-Share Alike 3.0 United States and you will find our citation policy
here.
Research Methodology
This report is based on data collected from financial balance sheets and income statements over the
period of 2006-2014. Our source of data is YCharts and corporate reporting.
Within the world of Supply Chain Management (SCM), each industry is unique. As a result, it is
dangerous to list all industries in a spreadsheet and declare a supply chain leader. We believe a
better methodology is to evaluate change over time with a focus on overall performance and
improvement within an industry peer group. This is the goal of this report.
Our first step in the process was to develop industry groupings, or peer groups, for analysis. To
accomplish this goal we used NAICS codes. Companies with extreme redefinition, i.e.
merger/acquisition/split, were eliminated. In addition, conglomerates were not evaluated. By definition
the analysis does not contain information on private companies.
Determination of the Metrics That Matter
The second goal in the development of the research methodology was to determine which metrics
should be tracked in the portfolio analysis. Within a supply chain there are many metrics. It is our
experience that most companies measure too many metrics. The second step in the analysis was to
determine which financial ratios to use for the research. In the measurement of supply chain
excellence, no two companies measured the same metrics portfolio. So, the determination of which
metrics to measure required a year of research.

In the development of the methodology, financial ratios (as opposed to absolute values) were used.
Why? This enables cross-currency analysis and comparisons across companies of different sizes.
Our goal was to build a universal methodology which could be used across the supply chain
independent of company size.
In Table 1, we share the supply chain ratios we analyzed to understand the trends in the Supply
Chain Metrics That Matter™ report series. Through the analysis of the industries in these reports, and
interviews with supply chain leaders on the results, we refined the methodology.
Table 1. Financial Ratios Considered in the Development of the Supply Chain Index
While there are other metrics which we believe are important in the determination of supply chain
excellence—forecast accuracy, case fill rate, on-time delivery, carbon footprint, and inventory write-
offs—we could not use these as inputs into the analysis due to the lack of a reliable and consistent
source of data for these metrics covering the industries and years studied. While we believe these
metrics should be used within the corporation in the building of strategy, we had to accept the
limitations. There is no reliable data source to enable these metrics to be used in this type of cross-
industry analysis.

To understand the relationship between supply chain performance and market capitalization, we
calculated the correlation of seven years of financial ratios (based on quarterly reporting) to market
capitalization (the number of outstanding shares multiplied by the share price on a quarterly basis).
The results of this study are presented in Table 2. Our goal was to select a portfolio of metrics that
would be meaningful to all industries.
Table 2. Correlation of Supply Chain Financial Ratios to Market Capitalization
We believe it is the supply chain leader’s role to build and manage supply chain performance to drive
year-over-year improvements which are balanced, strong, and resilient. In our research we find that
most companies focus on singular metrics throwing the supply chain system out of balance. In this
report, 26 of the companies in the study group performed better than their peer group, while driving
improvement on the portfolio of metrics of operating margin, inventory turns and Return on Invested
Capital. We list these companies as the Supply Chains to Admire. This is our second year of analysis.
Evaluating Supply Chain Performance
For leaders, we find that progress is slow and deliberate. In our research we find it takes at least
three years to drive significant supply chain progress, and the best supply chain transformation
projects take at least five to six years.
We also find it is difficult for supply chain leaders to sustain progress. A bad project, a quality issue,
or a merger can result in deep balance sheet gyrations. For example, Campbell’s Soup was a leader

in Food and Beverage until 2013, but faltered and has not gained ground from a failed technology
implementation. Many companies go through these ups and downs with distinct patterns.
The basis of this work is a study of metric performance patterns in orbit charts. We believe the
patterns matter. The goal is to drive consistency across economic cycles. It is for this reason that in
this report we analyze companies’ progress in three time periods—pre-recession, during the
recession, and post-recession—to analyze year-over-year trends. In our research, supply chain
excellence is defined as ‘performance better than a competitor on a portfolio of metrics’, and
‘improvement better than the peer group average’. While this sounds easy, what will be seen by the
reader of this report is that this is a tough standard which only 10% of companies can meet.
Driving Balance
The management of the supply chain is a constant juggling act. The basis of the analysis is the
Effective Frontier model. As shown in Figure 1, the Effective Frontier is designed to illustrate the
principle that a supply chain is a complex system, with increasing complexity, which needs to be
managed using a balanced metrics portfolio.
Figure 1. The Effective Frontier
In our writing, this model is deliberately not named the ‘Efficient Frontier’—a term used in economic
theory. Why? Quite simply it is because the term ‘efficiency’ in supply chain processes is usually
linked to the lowest cost or the best revenue per employee. The concepts of the Effective Frontier are
based on the balance of growth agendas with cost, cycle metrics (a focus on inventory), and
complexity. We use Return on Invested Capital as a proxy for complexity.

Driving Profitability
There is often an inverse relationship between margin and supply chain excellence. Industries with
the thinnest margins are more serious about delivering on the promise of supply chain leadership.
Progress was faster in the last decade than in the last five years. In this study, 60% of the industries
made progress on improving operating margin during 2011-2014. For many companies, as costs rose
and volatility increased, maintaining operating margin was a major feat.
In our analysis for this report, we use operating margin as the measure of profitability. The
methodology is equally applicable to EBITDA. While we also tried to use gross margin and cost per
unit, we found more gyration in the patterns using these two metrics.
Improving Cycles
When it comes to managing cash-to-cash cycles, a small number is better. Cash-to-cash is a
composite metric of receivables, inventory, and payables. As can be seen through the charts, the
greatest improvement in supply chains in the last decade has been made in payables—lengthening
payment terms to suppliers. Inventory levels and receivables have been more constant. The question
in the boardroom is “How small can supply chain working capital cycles be managed to pump cash
into the organization?” There is seldom the question of “How low can we go in working capital cycles
before we put the supply chain at risk?”
In our analysis we use inventory turns as our measure of supply chain cycles. The higher the
inventory turn value, the stronger the results. In this report, 50% of industries made progress on
improving inventory turns during the period of 2011-2014.
Managing Complexity
Within supply chain there are many forms of complexity: increase in items, formulas, customer
policies, geographic reach, and markets. Over the last decade complexity increased. A focus on cost-
to-serve, supply chain segmentation, and cross-functional supply chain planning improves the
potential of the supply chain to balance complexity while managing asset utilization. Very few
companies are good at translating volume planning into value-based policy decisions. L’Oréal is an
example of a company doing this well0F
i
. L’Oréal also makes the list of the Supply Chains to Admire.
Return on Invested Capital is a less well-known metric compared to Return on Assets (ROA). The
organization that has a focus on Return on Assets will typically have higher inventory levels. Our
research for this report indicates that ROIC has a better correlation with stock market capitalization,

and provides a broad perspective on cash flow generation and profitability based on shareholder
equity. The formula used for ROIC is:
ROIC is a measurement of the company’s use of capital. The goal is to drive higher returns than the
market rate of the cost of capital. As will be seen in this report, for many companies this is a struggle.
In the period of 2011-2014, 45% of industries made improvement on ROIC.
Defining Improvement
In judging improvement, the patterns matter. We built the Supply Chain Index to gauge the progress
of supply chain leaders. The methodology starts with understanding the resulting pattern when two
supply chain metrics (generally financial ratios) are plotted over time on an orbit chart. As shown in
Figure 2, an orbit chart enables the visualization of performance patterns. In this case, it is the story
of Colgate balancing inventory turns and operating margin. Colgate, a top performer in cost and asset
utilization, has struggled with the balance of operating margin and inventory turns over the course of
the past three years.
Figure 2. Example Orbit Chart of Colgate-Palmolive’s Operating Margin vs. Inventory Turns During 2000-2014

While Colgate outperforms the industry on the management of cost and delivering ROIC, the
progress at the intersection of operating margin and inventory turns improved dramatically in the
period of 2006-2009, but corporate performance on these two metrics is going backwards during
2011-2014. This is the case with most companies. The patterns of orbit charts tell stories. Frequently,
as seen Figure 2, they are tumultuous and turbulent. As a result, our first challenge in the creation of
a methodology was to define ‘Supply Chain Improvement’. This was our goal in building the Supply
Chain Index methodology. We wanted to develop a means to analyze improvement across a variety
of industries with applicability to companies with different levels of revenue and at different levels of
supply chain maturity.
As we shared our findings, and educated supply chain leaders about financial ratios, the interviews
with companies on their orbit charts helped us to better understand the data. “What caused this
downswing in inventory in 2007?” we would ask. The company would then share that it was a six-
month laser-focus brought on by a new manager. When we asked, “What caused these cash-to-cash
cycle gyrations in the period of 2002-2004?” they told us the story of a difficult merger. We found for
supply chain leaders that this was a new way of looking at data; and while it took adjustment and
training, it provided a new and fresh perspective at most organizations.
Our insight? Supply chain progress happens over time; not in months or quarters. Instead,
improvement occurs over the course of many years. How long? It usually takes at least three years to
see impactful change. The interrelationships between the metrics are real. The supply chain is a
complex system with nonlinear relationships between the metrics of growth, cost, inventory turns, and
ROIC. The effective management of the supply chain requires embracing and managing it as a total
system. As a result, the data cannot properly be assessed in a spreadsheet. Our approach was to
plot the shifts in patterns over time using orbit charts. In this report, we share the orbit charts of
consumer products manufacturing leaders.
The Supply Chain Index™
has three elements: balance, strength, and resiliency. The Supply Chain
Index is a measurement of supply chain improvement. Each of the factors—balance, strength and
resiliency—as defined below, comprises 1/3 of the total score.

Balance
Balance in the supply chain is a constant struggle. Growth requires an increase
in inventory. Forecasting and managing a new product launch is difficult.
Excessively long Days of Payables leads to weakened supplier health. The
examples are endless. The two metrics which comprise our balance measure
are Revenue Growth and Return on Invested Capital.
The balance measure in the Supply Chain Index is a mathematical calculation
of the vector trajectory of the pattern between growth and ROIC for the periods of 2006-2014 and
2009-2014.To understand this measurement, imagine a four quadrant grid with growth and ROIC on
the two axes. In our calculation, the overall trajectory of this vector from Year 0 (2006) to Year 8
(2014) is simplified into a single value which represents the company’s ability to balance growth while
improving ROIC.
Figure 3. P&G’s Growth vs. Return on Invested Capital (ROIC) for 2000-2014
Companies that were able to drive improvement in both metrics scored the best, while companies
that deteriorated in both metrics scored the worst. The companies are then stack ranked based on

factor ratings. Often the addition of items or customized customer programs throws the supply chain
out of balance. This is best seen on the orbit chart of ROIC and growth.
With a 6% average growth rate, and a 14% average ROIC performance for the period of 2000-2014,
the marketing engine of P&G built more billion-dollar brands than any other consumer products
company. The company struggled with item proliferation. The company also acquired and divested
many companies within this period, the most notable being the acquisition of Gillette in 2005 for $57
billion (in stock).
Note the shift and loss of balance in these two metrics, shown in Figure 3, through these acquisitions.
Currently, this is recognized, and as a result P&G is streamlining the company to reduce complexity.
(On August 1, 2014, the company announced it was dropping around 100 brands to concentrate on
80 remaining brands which produce 95% of the company's profits. A.G. Alley, the company's
Chairman, President and CEO, said the future P&G would be "a much simpler, much less complex
company of leading brands that's easier to manage and operate.1F
ii
")
The balance factor comprises 1/3 of the total Supply Chain Index calculation. Sustained improvement
on both year-over-year growth and ROIC indicates a balanced supply chain and is reflected in a high
balance score.
Strength
A successful supply chain is strong and reliable. Supply chain leaders strive to
deliver year-over-year improvements in both cost and inventory management.
Our research on pattern recognition has uncovered a rich relationship between
operating margin and inventory turns. For most supply chain leaders these are
some of the most important measures of their performance. Not only are they
important, they are more directly influenced by day-to-day supply chain
decisions than other, and more broadly used, corporate metrics. It is for this reason they are the two
components of our strength factor in the Supply Chain Index.
The strength measure in the Supply Chain Index is a mathematical calculation of the vector trajectory
of the pattern between inventory turns and operating margin for the periods of 2006-2014 and 2009-
2014. Like the balance factor calculation, the work starts with understanding the orbit chart pattern.
To understand the calculation, imagine a plot—an orbit chart—of inventory turns and operating
margin. In this report, performance is graphed on an annual basis from an origination point
representing performance on the two metrics at Year 0 (2006). The overall trajectory of this vector

from Year 0 (2006) to Year 8 (2014) is simplified into a single value which represents strength.
Improvement on both metrics simultaneously is graphically shown as movement to the upper-right
quadrant with increasing values for both inventory turns and operating margin over the period.
The companies are then stacked-ranked based on performance and assigned a strength factor. The
strength factor comprises 1/3 of the total Supply Chain Index calculation. Sustained improvement on
both inventory turns and operating margin indicates a strong supply chain and is reflected in a high
strength score.
In Figure 4, using an orbit chart, we show the pattern of Procter & Gamble versus Colgate. Note that
while Colgate is performing, over the period, at a higher level than P&G in both operating margin and
inventory turns, the patterns are very different. In the period of 2010-2014 Colgate is losing ground
and P&G is making progress. The comparative orbit chart contrasting two companies helps to tell the
story. These trends cannot be easily detected in a spreadsheet.
Figure 4. Orbit Chart: Operating Margin vs. Inventory Turn Comparison of Colgate and P&G for the Period of
2006-2010

Resiliency
Resiliency is an adjective easily tossed around as one of the important qualities
of a successful supply chain in today’s volatile world. However, the concept of
resiliency is difficult to define, and there is rarely clarity among stakeholders as
to what resiliency is or should be.
As we plotted orbit chart after orbit chart, we could see that some supply chains
had very tight patterns at the intersection of operating margin and inventory
turns, and that other companies had wild swings. We wanted to find a way to measure the variation.
So, we turned to the experts at ASU. After evaluating several methods to determine the pattern in the
orbit chart, we settled upon the Euclidean Mean Distance between the points.
These results were published in our March 2014 report, Supply Chain Metrics That Matter: Improving
Supply Chain Resiliency, where we define resiliency as the tightness of the pattern at the intersection
of inventory turns and operating margin. These metrics, both critical for any supply chain, are
components of both the strength and resiliency metrics in our Supply Chain Index model.
Table 3. Supply Chain Resiliency by Industry
The orbit chart plot (mathematically speaking, the Euclidean Mean Distance) indicates the ability of a
supply chain to maintain a tight, consistent pattern across these two metrics as the business

environment shifts and changes over a nine year period (2006-2014). As shown in Table 3, supply
chain resiliency varies considerably by industry. In general, the discrete industries are less resilient;
but have equaled the challenge with stronger practices in supply chain planning and the building of
value networks. As a result, the discrete industries do better on the Supply Chains to Admire
rankings.
The resiliency metric is similar to the cash-to-cash cycle in that a smaller number is better. A lower
number for resiliency is an indicator of a tighter pattern and greater reliability in results over the time
period.
Evaluating Supply Chain Excellence:
Putting It All Together
In this annual study each company is judged by their own potential to make progress. In this analysis
we determined the relative performance and improvement
of 320 companies in 22 industries and declared 26
winners. As you look at the analysis, remember that while
the average values of a company’s performance may be
higher than the peer group, in the Supply Chains to Admire
analysis we judge companies on both performance and improvement on a portfolio of metrics.
Use caution in looking at the tables. The best performing supply chains will often have a Supply
Chain Index value in the middle of the peer group. Why? Companies that are underperforming their
peer group can drive supply chain improvement faster than higher-performing companies. As a result,
their scores on the Supply Chain Index can be higher than a company with better results.

Executive Summary
Supply chain excellence makes a difference to corporate value. Resilient, predictable, and forward-
looking supply chain processes drive sustained balance sheet improvement. This is especially true in
times of declining growth. (In this research, only four industries—aerospace & defense, apparel,
automotive, and packaging suppliers—experienced growth for 2009-2014.)
Leaders want to drive excellence. By their nature these leaders are competitive. They want to power
performance improvements, increase corporate value, and outpace competitors. It is not easy. The
rate of business change is intense and the personal stakes are high. Day after day, supply chain
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 there was no independent and objective data-driven
methodology that could answer these questions. With the development of this methodology there is
now a way to gauge improvement.
When we started this work we were fearful that the methodology would not be selective enough to
reward leaders. Our fear was that the list would be too large. However, we should not have worried.
For two consecutive years only 10% of the companies studied are performing above the average of
their peer group on the Supply Chain Metrics That Matter—operating margin, inventory turns and
Return on Invested Capital—while driving improvement to a greater degree than their peer group. It is
a select group. Figure 5 shows the 26 winners of the 2015 Supply Chains to Admire analysis.
The 26 companies are: Anheuser-Busch InBev; Audi AG; Biogen Inc; CCL Industries Inc.; Cisco
Systems, Inc.; The Clorox Company; Coloplast Corp.; CVS Pharmacy; Dollar General Corporation;
Dollar Tree, Inc.; Eastman Chemical Company; EMC Corporation; The Estée Lauder Companies Inc.;
General Mills, Inc.; Intel Corporation; Deere & Company; Lexmark International Inc.; L'Oréal Group;
Nike, Inc.; PPG Industries; Qualcomm Inc.; Samsung Electronics Co. Ltd.; United Tractors; Wal-Mart
Stores, Inc.; Western Digital Corporation; and Whole Foods Market Inc. (Note: Shorter corporate or
trade names are used in the tables within this report.)
Eight companies have made the list for two consecutive years: Anheuser-Busch InBev; Audi, Cisco
Systems, Inc.; Eastman Chemical Company; EMC Corporation; General Mills, Inc.; Intel Corporation;
and Nike, Inc.

Figure 5. Winners of the 2015 Supply Chains to Admire Analysis
Why It Matters
Today, nine out of ten supply chains are stuck. They may be able to progress in one of the metrics,
but not the entire portfolio. Or they are at a higher level, but cannot drive improvement. In our analysis
no companies make the list from the aerospace and defense, automotive supply, contract
manufacturing, over-the-counter drug, or tire manufacturing industries.
The Supply Chains to Admire analysis highlights both performance and improvements. Companies
like Apple, AstraZeneca, Altera, BASF, Carter’s, Colgate, Monster Beverages, Packaging Corporation
of America, Ralph Lauren, Reckitt Benckiser, Revlon, Seagate, TSMC, Under Armour, VF
Corporation and Xilinx drove higher levels of performance, but were unable to power improvement. In
contrast, companies like Bridgestone, Campbell’s, Church & Dwight, Coca-Cola, Cooper Tire,
Hershey, Medtronic, Novo Nordisk, Tupperware, and Unilever meet the improvement criteria, but they
are not performing at or above average on the Supply Chain Metrics That Matter for their peer group.

In the development of supply chain strategy, defining excellence and managing a balanced portfolio is
job one. This report is designed to help. Listed below are summary tables of each industry with a
short analysis of industry trends. (For a more detailed discussion of each industry, with orbit charts,
reference the Supply Chain Metrics That Matter reports listed in the Appendix.) Use the methodology
to answer critical questions like:
Is your company making improvement? The Supply Chain Index is a measuring stick for gauging
improvement. Using the methodology calculations outlined in the Appendix, define the appropriate peer
group and time frame for comparison and see if your supply chain is keeping pace with your peer
group.
What is the potential of the supply chain? Many times, companies are unclear on the right goals.
They do not know how to understand what is possible, or what is an appropriate target. Using the range
and averages of this report by peer group and time horizon set reasonable goals to drive improvement.
How fast can change happen? What are reasonable goals? The best results happen when there is
small, incremental progress. Big bang projects can throw the supply chain out of balance. The orbit
charts are a guide to help supply chain leaders know how fast a supply chain can make a
transformation.
Supply chains have never been tougher to manage. It matters more now than ever. This report is a
story of when the going gets tough the tough get going. Many of the companies that have
outperformed in their industries overcame major obstacles. They faced the toughest challenges and
drove performance while companies with high margins and less pressing issues made less progress.
It is our hope that this report can help companies in all industries drive higher levels of performance.

Retail
Retail is not retail. In this report, to determine the winner, we studied three retail sectors: Mass
Merchants and General Merchandise, Grocery Retail, and Apparel Retail. In the analysis, retailers
with new business models fared better than their industry peers. Good examples are Dollar General,
Dollar Tree and Whole Foods Market. Each defined a new category of retailing.
For the retailer, inventory strategies are closely tied to merchandising and allocation decisions. It has
a short life and not selling it within the season results in write-offs, markdowns and lost sales. As a
result, the industry made more progress on inventory management than the other metrics within the
Supply Chain Metrics That Matter portfolio.
Traditionally, retailers were supply chain laggards, slow to adopt technology and embrace new
technologies. The evolution of e-commerce strategies and the race for omnichannel retailing has
accelerated retail progress.
While no retailer made the list last year, the 2015 list includes Dollar General, Dollar Tree, Walmart
and Whole Foods Market.
Mass Merchants and General Merchandise
In the retail sector of mass merchants and general merchandise we studied 18 companies. The worst
performance was by Sears Holdings. The best performers were CVS, Dollar Tree, and Dollar
General. The traditional retail model of JC Penney, Bon-Ton, and Dillard’s underperformed. Target
met the performance target, but failed to meet the improvement threshold. Walmart, on the borderline
for supply chain improvement, barely makes the list. For Target’s executives keeping shelves full is a
growing challenge2F
iii
.

Table 4. Analysis of Performance and Improvement for Mass Merchants and General Merchandise Retailers
Grocery Retail
Eating habits and shifts in demographics reshaped grocery retail over the last decade. Health and
wellness catapulted Whole Foods into a winning position to drive growth, but the Whole Foods supply
chain team drove the performance in operating margin, inventory turns and revenue per employee.
Tesco and Metro AG overachieve in operating margin and inventory turns, but lose ground to
competitors in driving improvement. SUPERVALU is the poorest overall performer.

Table 5. Analysis of Performance and Improvement for Grocery Retailers
Apparel
Is apparel a manufacturer or a retailer? The difference is a thin line. In the last decade apparel
companies aggressively tackled the omnichannel opportunity and opportunistically opened retail
outlets. This spurred growth. Nike outperforms while Carter’s, Ralph Lauren, and VF perform better
than their peer group, but they are not driving the required levels of improvement. Conversely, Under
Armour is driving improvement, but is not performing at the peer group average for the Supply Chain
Metrics That Matter.

Table 6. Analysis of Performance and Improvement for Apparel Manufacturers and Apparel Retail
Process Industries
Process industries by definition are asset intensive. These industries have less outsourcing than
discrete industries, and they tend to be more global. Over the last decade the building of global
supply chain capabilities was a major thrust for the process industry.
Chemical
Sitting four to five levels back in the value network, the chemical industry struggles to drive
performance at the intersection of operating margin and inventory turns. With tight margins and high
demand volatility, the challenges are greater than in other industries. While the historical focus has
been on functional excellence, this does not deliver the level of performance needed to meet the test
to make the list for the Supply Chains to Admire. Instead, there is a need for strong horizontal
processes—revenue management, sales and operations planning, new product launch, supplier
development—and horizontal cross-functional alignment.

For 2015, Eastman Chemical and PPG make the list. BASF made the list for 2014, but not for 2015.
The reason? The BASF supply chain has slowed in delivering improvement when compared to their
peer group. As you glance through the results, note that the chemical industry is a clear case of
making improvement in a singular metric, not the balanced portfolio. Dow Chemical is an example.
With extreme results on improving revenue per employee, the Dow organization fails to deliver on the
operating margin results of others in the peer group.
Table 7. Analysis of Performance and Improvement for Chemical Manufacturers
Consumer Packaged Goods
Some of the best known supply chain case studies are in the Consumer Packaged Goods (CPG)
industry. With strong brand presence, and global supply chains, the last decade was focused on
powering global growth. The CPG manufacturers, in a very competitive industry, pioneered many of
the supply chain practices used today in the 1990-2000 period. In the last decade industry
performance stalled as most companies lost ground with the increase in complexity.

In our study of orbit charts, companies in this industry sector struggled over the last decade to make
improvement while driving global growth. For most, performance is at a plateau. With acquisitions and
a larger scale of operations, companies grappled with technology scalability, the lack of talent in
emerging economies, increasing complexity, and a lack of clarity in global governance (how to make
decisions to maximize value).
How to get past the plateau? While point-of-sale data and VMI processes are now over 40-years old,
few companies on the list are innovating in the design and implementation of outside-in processes.
The sad reality is that retail and customer data comes into the organization, but rarely moves past the
sales or marketing organization into supply chain processes. In the face of growing complexity the
organization is stuck with a traditional definition of forecasting, rules-based demand consumption and
MRP/DRP logic. Using channel data, and adapting to the customer response, requires the redesign
of technologies and processes and the rethinking of IT standardization.
Growth has slowed, and supply chain excellence matters more than ever. In the journey,
organizational alignment is an ongoing issue. Large gaps exist between sales and operations; and as
a result, the journey to build the demand-driven value network is stalled. To get off the plateau, the
CPG leader needs to become market-driven, systemically listen and respond to consumer
preferences (the use of sentiment analysis) and build outside-in processes. It is clear that the
traditional marketing-driven approach of adding product complexity, and accelerating trade programs
without the redesign of processes, does not work in this digital world.
While most supply chain leaders will list P&G as a top performing supply chain, the company does
not meet the performance standard for this analysis for the period of 2006-2014. However, the
company would have made the list for the period of 1990-2000. The P&G journey of acquisitions and
divestiture, without the redesign of processes to be more outside-in, threw the supply chain out of
balance. In contrast, in the same time period Unilever drove improvement, but still does not meet the
industry performance standard.
In the last five years, Clorox, based on a focused journey of supply chain transformation over the past
decade, passes the Supply Chains to Admire test. This is based on a decade of redefining their end-
to-end supply chain processes. Colgate, the 2014 winner, falls off the list in 2015 due to failure to
meet the supply chain improvement test. As can be seen in Table 8, the strongest performers in the
peer group, Colgate and Reckitt Benckiser, are stalled in driving improvement. In parallel, P&G made
improvement in the last five years, but failed to meet the ROIC test of the Supply Chains to Admire
standard.

Table 8. Analysis of Performance and Improvement for Consumer Packaged Goods
Beauty
The beauty industry learned the lessons of supply chain excellence from the CPG industry and
applied them to drive improvement in the last five years. While the CPG industry is stalled, the beauty
industry is driving the results today that CPG experienced a decade ago. Growth is flat, but inventory
levels are slowly improving. The potential of the industry is very different than CPG with lower
operating margins and inventory turns, and an ROIC 1/3 the level of CPG.
The beauty industry is maturing in the face of global complexity. While no company from the beauty
industry made the list in 2015, two companies, Estée Lauder ad L’Oréal, make the list this year. In
Table 9, L’Oréal is higher performing, but both the L’Oréal and Estée Lauder case studies are great
examples of supply chain leadership with strong transformational leaders. In contrast, with the lack of
a strong supply chain leader and a more IT-focused program, Avon is the poorest performer.
The companies have stronger cross-functional alignment than CPG; and due to higher value products
with shorter-life cycle products, they have been more successful in the implementation of cost-to-
serve and complexity rationalization programs. While still not performing at the level of CPG, the
industry is playing catch-up while pioneering some success in complexity rationalization.

Table 9. Analysis of Performance and Improvement for Beauty Product Manufacturers
Food Manufacturing
A common mistake is to group Food and Beverage and CPG industries together. While they may
serve the same customer, the rhythms and cycles of the industries are very different. The food
industry has larger margins and ROIC than CPG. In the face of volatility in commodities, the growth of
short life cycle products, and special handling conditions in response to consumer demand for health
and wellness products, the food company’s supply chain is growing in importance. Companies like
General Mills and Nestlé are pioneering the use of channel data in supply chain processes
With a decline in volume growth due to changing customer preferences, the food manufacturing
supply chain needed to adapt quickly. This has resulted in a wave of mergers, acquisitions, and
divestures. The industry is in turmoil.
The CPG companies are more global while the food manufacturers tend to be more regional to match
processes with local taste preferences. In our analysis, General Mills makes the Supply Chains to
Admire list with improving performance in the period of 2006-2014 even though performance declined
in 2009-2014. Nestle is a top performer, but fails to drive improvement in either period of 2006-2014
or 2009-2014. Hershey and Smucker’s are driving improvement. Kellogg’s outperforms in inventory
turns, but underperforms on the total portfolio. Campbell’s Soup, a strong performer in 2013, has
declined in performance due to struggles with network design and IT implementation in a declining
market.

Table 10. Analysis of Performance and Improvement for Food Manufacturers
Beverage Production
Like the food industry, volumes in the beverage industry are also in decline. With higher margins than
CPG, beauty, or food, the beverage manufacturers are trying to redefine their supply chains quickly to
adapt to changing preferences to preserve margins. It is a struggle. A more regional supply chain with
short cycles, the industry operates with quicker cycles than CPG or food. The increase in item
complexity has eroded ROIC over the period of 2006-2014.
AB InBev makes the cut to be included in the Supply Chains to Admire for two consecutive years.
Coca-Cola comes close to making the list with a near miss in operating margin. As can be seen in
Table 11, the rest of the companies struggle to drive results in the balanced portfolio. The worst
performance is posted by Diageo and Monster Beverages.

Table 11. Analysis of Performance and Improvement for Beverage Manufacturers
Packaging
While their primary customers in consumer value chains are experiencing declining growth, the
overall industry for packaging and pulp manufacturing is growing. The secret is a diversified product
and customer list.
Like the chemical industry, the packaging industry sits four to five levels back in the value network
and struggles to manage margin in the face of volatile demand. The margins are 40-50% lower than
their major customers; and inventory turns are 25-30% lower. With the increase in artwork in
packaging and the need for late-stage postponement and digital redesign, there is an opportunity to
redefine the consumer value chain and build value networks to streamline the consumer response
while improving the margins for all parties.
While there were no packaging winners of the Supply Chains to Admire analysis for 2014, CCP
Industries makes the 2015 list. As you glance through the list you will see that like other industries,
companies in this industry often make the goal in one or two metrics but struggle to make the list on
the portfolio of metrics that define the Supply Chain Metrics That Matter.

Table 12. Analysis of Performance and Improvement for Packaging Manufacturers

Over-the-Counter Drugs
Over-the-counter (OTC) drug companies have legacy process definitions from CPG and
pharmaceutical companies. They have a little bit of both in the history of their process evolution. With
lower volumes and longer data latency for demand, the potential industry performance is lower than
CPG or food. No company in the OTC drug industry makes the list. The industry is evolving.
Table 13. Analysis of Performance and Improvement for Over-The-Counter Drug Manufacturers

Pharmaceutical
Despite the growth in healthcare, pharmaceutical companies are also experiencing declining
volumes. The industry is also in the process of evolving from major redefinition from multiple mergers
and acquisitions (Bristol-Myers Squibb, Pfizer, and Merck). Facing a patent cliff, with slowing
introduction of blockbuster drugs, the industry is struggling to preserve high margins and improve
drug discovery.
The pharmaceutical industry is traditional and functional. With historically high margins, the industry
has not been aggressive in the redefinition of supply chain processes. The secret to improving
performance lies in a three-prong approach of improving cross-functional alignment, strengthening
horizontal processes, and improving manufacturing reliability.
In this industry, Biogen makes the list of the Supply Chains to Admire. AstraZeneca has the highest
level of performance, but does not make the list due to the lack of improvement. In contrast, Novo
Nordisk and Novartis show improvement but do not meet the performance standard.
Table 14. Analysis of Performance and Improvement for Pharmaceutical Manufacturers

Discrete Manufacturing
While process company supply chain processes evolved from manufacturing, discrete companies’
supply chain processes have their roots in procurement. Material sourcing and the management of
the bill of materials are essential to the discrete industries and managing costs. In general, with the
exception of automotive, the labor input for the discrete industries is lower than their process
counterparts.
With more manufacturing and transportation outsourcing, and a dependency on procurement,
discrete manufacturers are more mature in the building of supply networks and the management of
supplier relationships. The leaders understand the need for supplier development and supplier
sensing, and the reduction of latency in supplier integration.
The industries have different dependencies. While the process and retail industries are more
dependent on road and ocean transportation, the discrete industries focus more on regional assembly
and hubbed material deployment strategies with air transport.
The best supply chain planning is in the consumer electronics industry. The processes in the discrete
industries are maturing faster than those of their process counterparts. However, as these companies
prepare to make the digital pivot, they are working to embrace the disruptive technologies of robotics,
drones and digital printing. They are facing even more potential disruption than other industries.
In general, the companies in discrete industries are smaller, and more focused with greater
integration of supply chain processes into new product launch. With the shortening of product life
cycles, and the evolution of software in product design, the cycles of the supply chain are shorter and
the decisions more critical. As can be seen in this analysis, the discrete industries are making faster
progress in the evolution of supply chain processes.
Companies making the list in the discrete industry are Audi, Coloplast, EMC, Intel, Lexmark,
Qualcomm, Samsung, United Tractor, and Western Digital. Three companies—Audi, EMC, and
Intel— make the list for two years in a row.

Aerospace and Defense
The aerospace and defense industry is subject to economic cycles. With a strong dependency on
military spending there are strong boom and bust cycles with strong ups and downs. The supply
chain is dependent on program management of new models and is carefully controlled through
supplier networks. Innovation in the industry through Performance Based Logistics has changed the
focus from building new models to uptime and reliability. This is a major change.
Additionally, in A&D there is a strong focus on service and warranty. Part performance and the
recycling or repair of major components is a strong design element in the supply chain.
The industry is a concentrated industry with few players. They are currently experiencing strong
growth. Operating margins are up and inventory turns are down. No company makes the list for the
Supply Chains to Admire. All companies are struggling with balance. This is the opportunity.
Table 15. Analysis of Performance and Improvement for Aerospace and Defense Manufacturers

Automotive
The automotive industry is also subject to the ups and downs of economic cycles. The industry is
currently in an upturn in a growth market, but the balance is better in the automotive industry than that
of A&D. In the Supply Chains to Admire analysis, Audi makes the list. While many supply chain
leaders think of Toyota, with the introduction of Lean processes, as the supply chain leader in this
industry, they do not meet the standard for operating margin or ROIC of the Supply Chains to Admire.
Toyota also ranks the lowest on supply chain improvement. The issue is that Lean processes have
been implemented too narrowly in manufacturing processes, and the automotive industry is a long
way from building outside-in to better understand what the shopper wants and building the right cars
to meet consumer demand.
Table 16. Analysis of Performance and Improvement for Automotive Manufacturers
In general, the United States automotive manufacturers lag the industry. With legacy issues in the
management of labor, they have brutally negotiated price and reduced automotive supplier
profitability, to the point of reducing viability, decreasing industry resiliency. In the analysis, European
and Asian manufacturers are more progressive and post better results.

Heavy Equipment
Heavy equipment—trucks, earth movers and diggers—have similar processes, but very different
industry drivers. The margins are higher in heavy equipment than automotive and the inventory turns
are lower. Progress is being made in both metrics.
United Tractors and John Deere make the list of Supply Chains to Admire. The rest of the companies
are struggling with balance on the Supply Chain Metrics That Matter.
Table 17. Analysis of Performance and Improvement for Heavy Equipment Manufacturers

Tires
The tire industry is a specialized industry supporting the heavy equipment, A&D, and automotive
industries. Historically a laggard industry, recent investments in these supply chains have driven
improvement. Operating margin and ROIC increased despite the decline in volumes. No company in
the tire industry makes the list for the Supply Chains to Admire; and while Bridgestone drives the
greatest improvement, they are unable to drive the level of performance in the portfolio of metrics.
Table 18 Analysis of Performance and Improvement for Tire Manufacturers

Automotive Suppliers
No automotive supplier makes the list for the Supply Chains to Admire in 2015. The industry is a story
of performance in singular metrics not the metrics portfolio. Danaher drives above performance in
operating margin, Johnson Controls outperforms on inventory turns, and UTC in ROIC. No single
company outperforms on the portfolio. There is also no definitive pattern on supply chain
improvement.
The automotive supplier industry has persevered decades of cost-cutting by automotive companies
by diversifying the customer base. The industry is stronger now than it was post-recession.
Table 19. Analysis of Performance and Improvement for Automotive Suppliers

Consumer Electronics
The consumer electronics industry is a supply chain leader. Due to changes in the industry—shorter
life cycles, pressure on margins, and the speed of change of technology—the consumer electronics
industry had to change to keep up.
As growth slowed, and market pressures increased, margins in the industry declined while inventory
turns improved. Due to industry pressures, consumer electronics brand owners manage complex
global supply chains with a high level of outsourcing.
For this industry, Lexmark makes the Supply Chains to Admire list. Apple, an overperformer, posts
results in the metrics portfolio above the peer group; however, they are stuck, unable to drive
improvement. Apple is 16th
out of 16 on the Supply Chain Index.
Table 20. Analysis of Performance and Improvement for Consumer Electronics

B2B Electronics
In contrast, B2B electronics companies weathered the impacts in a very different industry. The
industrial B2B electronics experienced more consistent demand and drove growth in margins and
consistency in inventory and ROIC results. The industry was more stable than the consumer
electronics industry. Cisco Systems, EMC, Qualcomm and Western Digital make the list of Supply
Chains to Admire. Seagate, a 2014 winner, falls off the list due to a decline in improvement.
This industry leads in the establishment of emerging practices for supply sensing, risk management
and supply chain planning. For emerging practices in the use of technology, look to the consumer
electronics and the B2B high-tech industries.
Table 21. Analysis of Performance and Improvement for B2B Technology Providers

Contract Manufacturing
Contract manufacturing emerged over the last decade to support the evolution of the high-tech
industries. With volatile revenue and slim margins, one can argue that this commodity-based service
model is not sustainable over the long term and poses a risk to the discrete industries that they
support. The question should be, “Is this industry viable?” However, the answer is moot since the
industry is now over a decade old.
Each of the contract manufacturers in Table 22, over time, has attempted to differentiate services and
become a preferred vendor in this commodity market, but to no avail. Competition in this market is
fierce with tough negotiation on margins and service. The contract manufacturer supporting the high-
tech industry operates in a tough market with little forgiveness by the high-tech brand owners.
Table 22. Analysis of Performance and Improvement for Contract Manufacturers

Semiconductor Manufacturing
The semiconductor industry is a different story. With high and increasing margins, and ever-changing
technology opportunities, the semiconductor industry is more stable than the industries of consumer
electronics or contract manufacturers. As demand for upstream products slows, growth in the
semiconductor industry is slowing. Semiconductor manufacturers are attempting to diversify to
overcome this challenge.
Intel makes the list for the 2015 Supply Chains to Admire. This is the second year Intel made the list.
TSMC, a 2014 winner, and an overperformer, is eliminated from the list. TSMC does not meet the
improvement standard. Altera also outperforms, but does not meet the improvement standard.
Table 23. Analysis of Performance and Improvement for Semiconductor Manufacturers

Medical Device
The medical device industry is a story of industry laggards. While other discrete industries have
driven significant improvement, medical device companies have maintained high margins of 19% but
have not driven improvements in inventory or ROIC.
Coloplast makes the list of the Supply Chains to Admire, and Edwards Lifesciences drives
improvement, but the rest of the companies have struggled to improve the total portfolio of the Supply
Chain Metrics That Matter.
Table 24. Analysis of Performance and Improvement for Medical Device Manufacturers

What Makes a Difference?
The analysis of “Who does supply chain the best?” is complicated and not for the faint of heart. The
journey for improvement is a long, and often a winding road. For companies that have outperformed
there are seven common characteristics:
1. Continuity of leadership. Companies with leadership consistency have a higher probability of
driving higher levels of performance. A supply chain is not a supply chain and form needs to
follow function in the design of the supply chain strategy. A strong supply chain leader is good at
making conscious choices and focusing on cross-functional orchestration.
2. Supply chain talent development. Supply chain leaders take ownership of talent
development. It is not an accident or an afterthought. Instead, it is an active and aggressive
program deep within the DNA of the organization.
3. Focus on a multiyear supply chain strategy. The journey is multiyear, with a strong
understanding of movement in small increments while managing the supply chain as a complex
system with a nonlinear relationship between the metrics.
4. Organizational reporting. A common characteristic of outperformers is the consolidation of the
functions of plan, make, source, and deliver under a common leader. While this may be a tough
goal for the large organization within the global multinational, progress is accelerated when
reporting relationships are consolidated (source, make and deliver reporting to the same
organization) and trade-offs between functions are orchestrated to improve progress on the
Supply Chain Metrics That Matter.
5. Clear global governance to guide cross-functional decision making. For the global
multinational, clarity on decisions streamlines results. While this sounds easy, it is not. The
greater the clarity in governance, the faster the progress on performance and improvement.
6. Strength in horizontal processes. Cross-functional alignment happens through the alignment
of horizontal processes. The critical horizontal processes are revenue management, new
product launch, sales and operations planning, supplier development and corporate social
responsibility. The focus is shifting to be outside in.
7. Excellence in supply chain planning, network design and inventory management.
Excellence in supply chain planning is fundamental to driving improvement and outperforming
on the Supply Chain Metrics That Mater. The use of supply chain planning technologies allows
companies to manage the supply chain as a complex network.

Conclusion
On the journey towards supply chain excellence, companies need to hold themselves accountable to
balance sheet performance. The patterns are gnarly, but to judge supply chain excellence,
performance and improvement need to be assessed together by peer group, and the analysis needs
to be viewed over time. The patterns matter. For all, it is a journey, not a sprint.

Appendix: Supply Chain Index Calculations
Supply chain leaders want to know if they are making improvement against their peer group. The
financial patterns are gnarly and it is often difficult to assess progress from a simple two-dimensional
plot. To make this easier, we developed the Supply Chain Index.
In building the Index, we used financial ratios versus absolute numbers. The use of ratios allowed us
to compare companies regardless of size, and to also compare companies across currencies.
The math behind the Index is defined below. This methodology was built in cooperation with a
research team from the School of Computing, Informatics and Decision Systems Engineering at
Arizona State University (ASU) in the spring of 2014.
Balance
To develop the balance factor used in the Index, we evaluated a scatter plot of revenue growth and
Return on Invested Capital (ROIC) for a specific company. The balance factor (B) is the proportional
difference of points on an orbit chart for the period of 2006-2014 at the intersection of revenue growth
and Return on Invested Capital. To calculate the balance factor, let iREV
denote the revenue growth
of the ith time period, iROIC
denote the return on invested capital of the ith time period and n
denote the total number of periods under consideration. Thus the balance factor is defined as:





 




1
1
1
1
1
1
ROIC
ROICROIC
REV
REVREV
n
B nn
.
Strength
The strength factor is a similar calculation to the balance factor, but with a focus on the intersection of
operating margin and inventory turns. For this analysis we used a scatter plot of operating margin and
inventory turns on an orbit chart for a specific company. Let iOM
denote the operating margin of the
ith time period (e.g., ith year), iIT
denote the inventory turns of the ith time period and n denote the
total number of periods under consideration.

The strength measure (S) is defined as:





 




1
1
1
1
1
1
IT
ITIT
OM
OMOM
n
S nn
The denominator reflects that there are n-1 differences between n time periods. Figure A depicts the
intersection of operating margin and inventory turns for an example company. The difference in
operating margin and inventory turns between the first and last time period is shown.
Figure A. Inventory Turns and Operating Margin Intersection for an Example Company
Resiliency
The resiliency factor is a measurement of the tightness of the pattern at the intersection of operating
margin and inventory turns for a given company. For companies that did well, and had a tight pattern,
the value will be lower than companies that lacked reliability for the period. To develop the value, we

considered a scatter plot of operating margin and inventory turns for a specific company.
Let dij denote the Euclidean Mean distance between a pair of points i and j and let m denote the total
number of pairs. The resiliency measure (R) is defined as the mean distance of all possible pairs of
points at the intersection. That is,


i ij
ijd
m
R
1
Figure B shows an example of the operating margin and inventory turns intersection for an example
company.
Figure B. Calculation of Resiliency at the Intersection of Inventory Turns and Operating Margin
Table A shows the distances between every possible pair of points at the intersection. Resiliency is
calculated from the mean of the distance values and is equal to 0.7335.

Table A. Calculation of Euclidean Distances for an Example Company
Alternative Measures Considered for
Resiliency
To develop the resiliency factor, we considered a number of alternative approaches. One method
considered was Principal Components Analysis (PCA). It is a traditional method used to summarize
multidimensional data. We considered measures commonly applied with PCA based on eigenvalues
and eigenvectors. (e.g., the condition index, percentage of variance explained by the first principal
component). Although these measures were reasonable they did not distinguish between orbit plots
that were visually different as well as simpler approaches.
We also considered other measures based on the distances (e.g., sum, maximum, minimum and the
coefficient of variation of the distances). The mean distance was finally selected to measure the
compactness of a set of points. In fact, a similar measure called cohesion is frequently used in cluster
analysis to measure the compactness of a set of points. Rather than taking the sum of distances (as
in cohesion), we consider the mean to account for the potentially different number of points for each
company.

Formula Calculations
The definitions of financial metrics used in this report are outlined in Table B.
Table B. Metrics Definitions
Definitions
The definitions used in this report are summarized below:
Definitions
• Metrics That Matter: Metrics that can be improved by the supply chain leader and have a high
correlation to market capitalization.
• Market-Driven: The ability to sense and respond from market-to-market (from the customer’s
customer to the supplier’s supplier).
• NAICS Codes: US census classification(s) of industry groupings.
• Orbit Chart: A comparison of year-over-year improvement between two supply chain metrics.
• Supply Chain Index: A methodology developed by Supply Chain Insights in 2014 to measure
supply chain improvement based on orbit chart measurements.
• Supply Chains to Admire: An objective, and independent analysis of supply chains that are
outperforming in the Supply Chain Metrics That Matter and are driving supply chain improvement
as measured by the Supply Chain Index.

Supply Chain Metrics That Matter Reports
Over the course of the last three years, our methodology has changed and matured. You can track
our progress, and find industry-specific information here:
Supply Chain Metrics That Matter: A Focus on Retail
Published by Supply Chain Insights in August 2012.
Supply Chain Metrics That Matter: A Focus on Consumer Products
Published by Supply Chain Insights in September 2012.
Supply Chain Metrics That Matter: The Cash-to-Cash Cycle
Published by Supply Chain Insights in November 2012.
Supply Chain Metrics That Matter: A Focus on the Food and Beverage Industry
Published by Supply Chain Insights in December 2012.
Supply Chain Metrics That Matter: Driving Reliability in Margins
Published by Supply Chain Insights in January 2013.
Supply Chain Metrics That Matter: A Focus on Hospitals
Published by Supply Chain Insights in January 2013.
Supply Chain Metrics That Matter: A Focus on Brick & Mortar Retail
Published by Supply Chain Insights in February 2013.
Supply Chain Metrics That Matter: A Focus on Medical Device Manufacturers
Published by Supply Chain Insights in February 2013.
Supply Chain Metrics That Matter: A Focus on Consumer Electronics
Published by Supply Chain Insights in April 2013.
Supply Chain Metrics That Matter: A Focus on Apparel
Published by Supply Chain Insights in May 2013
Supply Chain Metrics That Matter: A Focus on Contract Manufacturing
Published by Supply Chain Insights in August 2013
Supply Chain Metrics That Matter: A Focus on the Automotive Industry
Published by Supply Chain Insights in October 2013
Supply Chain Metrics That Matter: A Closer Look at the Cash-To-Cash Cycle (2000-2012)
Published by Supply Chain Insights in November 2013

Supply Chain Metrics That Matter: Third Party Logistics Providers
Published by Supply Chain Insights in December 2013
Supply Chain Metrics That Matter: A Critical Look at Operating Margin
Published by Supply Chain Insights in December 2013
Supply Chain Metrics That Matter: A Closer Look at Pharmaceutical Companies
Published by Supply Chain Insights in April 2014
Supply Chain Metrics That Matter: A Closer Look at Chemical Companies
Supply Chain Metrics That Matter: A Closer Look at Food and Beverage Companies
Published by Supply Chain Insights in June 2014
Supply Chain Metrics That Matter – A Focus on Pharmaceutical Companies
Published by Supply Chain Insights in April 2015
Supply Chain Metrics That Matter – A Focus on Chemical Companies – 2015
Supply Chain Metrics That Matter: A Focus on Food and Beverage Companies-2015
Published by Supply Chain Insights in June 2015
Supply Chain Metrics That Matter: A Focus on Consumer Products
Published by Supply Chain Insights in August 2015

About Supply Chain Insights, LLC
Founded in February, 2012 by Lora Cecere, Supply Chain Insights LLC is focused on delivering
independent, actionable, and objective advice for supply chain leaders. If you need to know
which practices and technologies make the biggest difference to corporate performance, turn to us.
We are a company dedicated to this research. Our goal is to help you understand supply chain
trends, evolving technologies and which metrics matter.
About Lora Cecere
Lora Cecere (twitter ID @lcecere) is the Founder of Supply Chain Insights LLC and
the author of popular enterprise software blog Supply Chain Shaman currently read
by 5,000 supply chain professionals. She also writes as a Linkedin Influencer and
is a a contributor for Forbes. She has written four books. The first book, Bricks
Matter (co-authored with Charlie Chase). published in 2012. The second book,
Supply Chain Metrics That Matter, published in December 2014. In addition, there
are two self-published books, The Shaman’s Journal 2014, published in September
2014, and the fourth book, The Shaman’s Journal 2015, published in September 2015.
With over 12 years as a research analyst with AMR Research, Gartner Group, and Altimeter
Group, and now as a Founder of Supply Chain Insights, Lora understands supply chain. She has
worked with over 600 companies on their supply chain strategy and speaks at over 50 conferences a
year on the evolution of supply chain processes and technologies. Her research is designed for the
early adopter seeking first-mover advantage.

Endnotes
i
L’Oréal a Beautiful Supply Chain, March 2015, Supply Chain Shaman, http://www.supplychainshaman.com/supply-chain-2/supply-
chain-excellence/loreal-a-beautiful-supply-chain-2/
ii
Around 100 Brands to be Dropped by Procter and Gamble to Boost Sales, August 14, 2014, Cincinnati News,
http://www.cincinnatinews.net/index.php/sid/224358103
iii
Expect more? Empty shelves frustrate Target customers, execs, MPR News, September 3, 2015,
http://www.mprnews.org/story/2015/09/03/empty-target-shelves

Supply Chains to Admire 2015: A Study of Excellence

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