Presentation given at the 2016 Supply Chain Insights Global Summit - 7-9 SEP 2016 at The Phoenician in Scottsdale, AZ
Opening: Imagining the Supply Chain of 2030. Where Are We Now? What Is Possible?
• Lora Cecere – Founder, Supply Chain Insights
In this presentation, the founder of Supply Chain Insights shares an overview of the Supply Chains to Admire Methodology for 2016 and makes five predictions for Supply Chain 2030. This is the keynote for the kick-off of the Supply Chain Insights Global Summit.
To see the video go to http://supplychaininsightsglobalsummit.com/2016-summit-presentations/
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We’re Having a
GLOBAL
Conversation
Live Streaming During the Event
– Questions will be taken live
Twitter #imagine2030
– Follow us at @scinsightsllc
– https://live.hosted.events/
SupplyChain2030/Life Streaming
Sponsored by
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Imagining the Supply
Chain of 2030
Lora Cecere
Supply Chain Insights
Founder
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1. To have an objective measurement of supply chain excellence
for our research.
2. To help supply chain leaders objectively benchmark and build
balanced portfolios.
3. To gain an understanding of how fast supply chain actions
translate to balance sheet performance.
4. To help supply chain leaders talk the language of finance, and to
help finance teams understand what is possible in supply chain.
5. To develop an objective standard that is data-driven.
Why Do We Do This?
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• Divided 320 public companies into 31 industry peer
groups based on NAICS codes.
• Evaluated the companies within industry peer
groups for improvement, value, and performance.
• Examined two periods: 2006-2015 and 2009-2015.
Methodology
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Improvement
Overall Ranking per Company
• Balance: Return on Invested Capital & Revenue Growth Vector Trajectory
• Strength: Inventory Turns & Operating Margin Vector Trajectory
• Resiliency: Inventory Turns & Operating Margin Mean Distance
𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙 =
𝟏
𝟑
𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓 +
𝟏
𝟑
𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓 +
𝟏
𝟑
𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓
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Price to Tangible Book Value =
Market Price/Tangible Book Value/Share
Value
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Performance Factors:
Performance
Year-over-
Year Growth
Operating
Margin
Inventory
Turns
Return on
Invested Capital
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Supply Chains to Admire 2016
2006-2015 2009-2015
Winners Finalists Winners Finalists
17 17 16 21
Only 12% of Companies Are Driving
Improvement and Performance
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When Growth
Declines,
Balance Is
Tougher
1
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Process
Industries Are
Like a Frog
in a Beaker of
Hot Water
2
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Summit Registrants Survey Results
QUESTION
Which three elements have
the highest correlation with
PRICE TO TANGIBLE
BOOK VALUE?
Survey conducted among 60 registrants prior to the Summit
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Let’s Think About Supply Chain 2030
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Our Goal:
Build a Guiding
Coalition
• Think Differently
• Drive New Outcomes
• Learn Together
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Time to Take a
Different Path?
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Summit Registrants Survey Results
QUESTION
Which one
DISRUPTIVE TECHNOLOGY
will have the greatest impact on supply
chain effectiveness? 2025 vs. 2030
Survey conducted among 60 registrants prior to the Summit
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Summit Registrants Survey Results
QUESTION
Which one
ANALYTIC TECHNIQUE
is most important to drive supply
chain excellence by 2030?
Survey conducted among 60 registrants prior to the Summit
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Prediction #2: The Learning Supply Chain Supply
But, What if
They Could?
Supply Chains
Don’t Play by
the Rules…
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Prediction #3: The Socially Responsible Supply Chan
Consumers
Will Vote
Brands with
Their Feet
Increase in
Activism
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Prediction #4: A New Network of Networks for B2B
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Summit Registrants Survey Results
QUESTION
What is the biggest barrier for
companies building a
NETWORK OF NETWORKS?
Survey conducted among 60 registrants prior to the Summit
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Prediction #5: The Supply Chain as the Engine of Growth
• Adaptive Networks
• Cognitive Learning
• Market Sensing
• Outside-In Processes
• Test and Learn Strategies
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Prediction #5: The Supply Chain as the Engine of Growth
• Adaptive Networks
• Cognitive Learning
• Market Sensing
• Outside-In Processes
• Test and Learn Strategies
New
Business
Models
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Run from what's comfortable.
Forget safety.
Live where you fear to live.
Destroy your reputation.
Be notorious.
~ Rumi
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Keynote Sponsor Live-Streamed Event Webcast
Digital Showcase
Reception
Networking
Reception
Book
Giveaway
5K Run Post-Event
Webinar
Morning and Afternoon Breaks
General Sponsors
Thank You to Our Sponsors
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Meet the Supply Chain Insights Team
Lora Cecere
Founder
Alison Crawford
Marketing Director
Regina Denman
Client Services Director
Michael Hambrick
System Administrator
Heather Hart
Research Director
Helen King
Research Associate
Jill Smith
Operations Manager
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Switching Seats for Better Networking
How to read your NAME BADGE:
Lora
Lora Cecere
Supply Chain Insights
Cecere, Lora
12 8 16 4
Table numbers by session:
12 8 16 4
Wed PM Thur AM Thur PM Fri AM
To improve networking, we ask that everyone switch seats
1) BEFORE the Thursday morning session
2) BEFORE lunch on Thursday
3) BEFORE the Friday morning session
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Our Goal:
Build a Guiding
Coalition
• Think Differently
• Drive New Outcomes
• Learn Together
he Supply Chain Top 25 is the preeminent ranking of supply chain leaders. The ranking is comprised of two main components: a quantitative measurement of business performance and a qualitative representation of both peer and Gartner analyst opinions. These two components are combined into a total composite score which ultimately determines the ranking. The ranking is revealed each year at the Gartner Supply Chain Executive Conference.
Company List
Each year we determine the companies to include in the Supply Chain Top 25 study by starting with the combined Fortune Global 500 and Forbes Global 2000 lists. In an effort to have a manageable number of companies in the study, a $12 billion minimum revenue threshold is applied. We also remove companies that do not have supply chains for physical products or whose supply chains have unique characteristics that distort the financial metrics used in the ranking. Finally, we eliminate companies who do not have up-to-date publically available financial data. The final list typically consists of approximately 300 companies.
Business Data
The quantitative part of the Supply Chain Top 25 is comprised of three financial metrics and a corporate social responsibility metric which are combined to create a weighted average score. This score represents 50% of a company's total composite score. Below is the list of metrics used and how they're calculated. All financial data is taken from each company's annual report:
Return on assets (ROA) — Net income / total assets
Inventory turns — Cost of goods sold / inventory
Revenue growth — Change in revenue from prior year
Corporate social responsibility — Index of third-party CSR measures
We use a three-year weighted average for the ROA and revenue growth metrics. The yearly weightings are as follows: 50% for the most recent year, 30% for the second year and 20% for the third year. For inventory, we use a one-year quarterly average calculation.
The Corporate Social Responsibility (CSR) component score assesses each company's commitment to and proficiency in running socially and environmentally responsible supply chains. Using trusted third-party sources, points are awarded if companies produce publicly-available sustainability reports using accepted standards and if certain expert third parties recognize their exceptional performance in social and environmental responsibility.