By Lora Cecere

Founder and CEO Supply Chain Insights LLC

and

Abby Mayer

Research Associate Supply Chain Insights LLC

Page 2

Contents

Research Overview

Disclosure

Research Methodology

Judging Supply Chain Performance

Judging Supply Chain Improvement: The Supply Chain Index Methodology

Balance

Strength

Resiliency

Calculating a Score for the Supply Chain Index

Why the Time Period Matters

Supply Chains to Admire

Executive Overview

Measuring Supply Chain Improvement

Improving Performance on the Effective Frontier

What Is a Value Network?

Progress within the Consumer Value Network

Retail

Apparel

Consumer Packaged Goods

Food and Beverage

Chemical

Packaging

Progress within the Healthcare Value Network

Pharmaceutical

Medical Device

Progress within the Industrial Value Network

Automotive

Automotive Suppliers

Consumer Electronics

Semiconductor

Recommendations

Conclusion

Appendix

Alternative Measures Considered for Resiliency

Metrics That Matter Reports

Other Reports in the Supply Chain Index Report Series

About Supply Chain Insights, LLC

About Lora Cecere

About Abby Mayer

3

4

4

9

9

10

11

11

12

13

14

15

16

18

20

23

24

26

27

29

31

32

34

34

36

37

38

39

41

42

44

44

45

48

49

50

50

51

51

Page 3

Research Overview The term supply chain excellence is easier to say than to measure. Having a clear definition is critical

to enabling 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.

This work started with a deep analysis by industry. Each industry has unique rhythms and cycles with

a possible band of performance across the critical supply chain metrics of growth, operating margin,

inventory turns and Return on Invested Capital (ROIC). The supply chain leader’s goal is to improve

the potential of the supply chain within the possible range for the industry.

To determine what is possible, in past two years we have published 18 reports to analyze the

progress of companies within specific industries for the period of 2000–2012. These reports, by

Supply Chain Insights LLC, were published in a series called Supply Chain Metrics That Matter from

August, 2012 through March, 2014. These deep studies of supply chain performance within specific

industries were preparatory work to build a methodology to gauge supply chain progress using

financial ratios. To select the Supply Chains to Admire, we analyzed peer groups to understand first

what was possible, and then to determine which companies were outperforming their peer group on

the metrics of growth, operating margin, inventory turns and Return on Invested Capital. After

determining the overperforming companies, our next goal was to judge supply chain improvement. It

is our belief that companies that are delivering on the goal of supply chain excellence not only

demonstrate better than average balance sheet results against their peer group, but also drive

improvement against the peer group.

While it is easy to measure performance, gauging improvement is more difficult. To accomplish this

goal, we needed to define a new methodology. We wanted to produce 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 Supply Chain Index which was developed with input from the University of Arizona School

of Computing, Informatics and Decision Systems Engineering, and based on the performance

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. In this report, we analyze

the progress of 3 value networks: consumer, healthcare and industrial. A value network is a group of

Page 4

trading partners focused on delivering goods and services effectively to the point of consumption. We

focus on two separate time periods: 2006-2013 and 2009-2013.

The goal of this report is to identify, and celebrate, the success of the companies that have excelled

in driving both performance and improvement. In future studies, it is our goal to study these

companies closely to understand the performance drivers. We want to share the insights to help other

companies gain higher levels of supply chain performance.

Disclosure Your trust is important to us. As such, we are open and transparent about our financial relationships

and our research process. 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 The basis of this report is publicly available information from corporate annual reports and income

statements for the period of 2006-2013. To complete this analysis, and understand the patterns, we

partnered with a research team from the School of Computing, Informatics and Decision Systems

Engineering at Arizona State University (ASU) during the spring of 2014 to develop the Supply Chain

Index methodology to analyze supply chain improvement based on pattern analysis of performance.

Details on the math used in this methodology are outlined in the Appendix of this report.

In the analysis of the Supply Chain Index, we use supply chain financial ratios as opposed to absolute

numbers. The use of ratios allows us to compare large companies to small entities, and also to

compare the progress of companies operating in different countries using differing currencies.

Additionally, it allows us to track progress over time. In Table 1, we share the supply chain ratios we

have been mining to understand the trends in the Metrics That Matter report series. For the Supply

Chain Index, we measure the patterns and trade-offs between growth, inventory turns, operating

margin and ROIC.

Page 5

Table 1. Financial Ratios Considered in the Development of the Supply Chain Index

While there are other measurements which we believe are important in the determination of supply

chain excellence—like forecast accuracy, case fill rate, carbon footprint, and inventory write-offs—we

cannot find a reliable and consistent source of data for these metrics that covers all industries and

years studied. Instead, we find that the industry data sources are spotty and largely inaccurate due to

the self-reporting of data. Without a consistent data source across the industries, we cannot include

these factors even though we believe that they are important.

The Supply Chain Index methodology was built on the belief that the supply chain is a complex

system with increasing complexity. 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. We find that most companies throw the system out balance and are able to only drive

progress on a single metric, not the metrics portfolio. To illustrate this point, to develop this report, we

studied nearly 200 companies, and we only found 21 of the companies in the study group performing

better than their peers on the portfolio of metrics.

While a company may have a goal to drive a singular metric, we believe that this should be a

conscious choice. In our review of the data in this report with supply chain leaders, most are not

Page 6

aware of how they rate to their peer group. In addition, it has not been their goal to drive a singular

metric. Almost all companies are attempting to grow while managing costs and inventory and

effectively utilizing assets.

In the management of the supply chain, there are many metrics. In fact, we find that most supply

chain leaders measure too many metrics. Our first goal was to determine which metrics should be

tracked in the portfolio analysis. After two years of research in building the Metrics That Matter

reports, we selected four financial ratios as the foundation of the analysis. Again, they were growth,

inventory turns, operating margin and ROIC. This was based on interviews with supply chain leaders

and the correlation to market capitalization. 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 on the correlation to market

capitalization are presented in Table 2. Our goal was to select a portfolio that would be meaningful to

all industries.

Table 2. Correlation of Supply Chain Financial Ratios to Market Capitalization

We believe that supply chain improvement takes time. In our research we find that it takes at least

three years to drive significant supply chain progress, and that the best improvements take at least

five to six years. We also find that it is difficult for supply chain leaders to sustain progress levels that

they have achieved. A bad project, a quality issue, or a merger can result in gyrations. As a result,

Page 7

most companies go through ups and downs with distinct patterns. We believe that the patterns

matter. It is for this reason that in this report we analyze companies’ progress from 2006 through

2013, and then again from 2009 through 2013. For the purpose of industry groupings, we use NAICS

code designations. Due to the complexity of comparing conglomerates, we have not included large

companies with diverse lines of business in this analysis. Likewise, we have not included companies

with a limited peer group. To be included in the analysis, we need to define a peer group of at least

eight comparable companies.

In judging improvement, the patterns matter. The foundation of the Supply Chain Index starts with

understanding the resulting pattern when two supply chain metrics (generally ratios) are plotted over

time on an orbit chart. As shown in Figure 1, the orbit chart enables the visualization of performance

patterns. In this case, the company is Apple, Inc. The average values for the two financial ratios of

operating margin and inventory turns are shown in the box, and the annual progress is shown as

points on the chart. The best scenario is notated in the upper right-hand corner. This pattern of

Apple’s performance, as shown in Figure 1, is very characteristic of most companies.

Figure 1. Example Orbit Chart of Apple, Inc.

Page 8

The company is improving on one, not two of the critical metrics. We seldom see a company making

linear improvement at the intersection of these two important metrics.

However, the pattern of Apple is quite different than that of Walmart, as shown in Figure 2. Note the

differences in the patterns. Walmart has primarily focused on improving inventory turns without much

improvement in operating margin over the period. Also, the degree of improvement at Walmart is less

than what we see at Apple.

Figure 2. Example Orbit Chart of Apple, Inc.

Yet, the patterns of these two companies is much more orderly than what we see in other companies

like Dow, DuPont, Mattel or even Procter & Gamble. For most companies, the orbit charts are gnarly

patterns. Our first challenge in the building the Supply Chain Index was to create something that

could be used across a variety of industries while being applicable to different levels of supply chain

maturity. A much more intricate pattern to read is shown in Figure 3. It is depicting the progress of

Dow Chemical. (Like many companies, Dow has not made much progress. Note that the performance

of Dow in 2013 is at a place similar to where they were in 2000.

Page 9

Figure 3. Example Orbit Chart of Dow Chemical

Judging Supply Chain Performance

Supply chain performance for this report is based on the average values of operating margin,

inventory turns and Return on Invested Capital. If the company performed better than the industry

peer group for these three metrics for the period of 2006-2013 or 2009-2013, they made the first cut

of the analysis. These companies were then stack ranked based on improvement as measured by the

Supply Chain Index methodology. Only 10 % of the companies studied for this report performed

above their peer group averages for these three metrics.

Judging Supply Chain Improvement: The Supply Chain Index Methodology

There are three components within the Supply Chain Index score: balance, strength, and resiliency

factors. It is a composite metric where each factor is weighted equally.

In this report, a company’s balance, strength, and resiliency factors are calculated and then stack

ranked within its industry. Each contributes equally to the final score. A lower score on the Index

Page 10

denotes the greatest degree of improvement. For a more detailed explanation of the math behind the

Index, please refer to the Appendix.

Balance

For the supply chain leader, balance in performance metrics in the supply chain is a constant

struggle. While companies say that they want to be balanced, they lack a way to measure

improvement. The metrics are tightly linked as a complex system. For example, as growth increases

there is usually an increase in demand error which can reduce the Return on Invested Capital.

Reduced inventory, without improving the form and function of the inventory elements, can wreak

havoc on customer service levels. Excess inventory can lead to high carrying cost and product

obsolescence. Excessively long days of payables can translate to weakened supplier health and

ultimately an increase in costs. The examples are endless: balance in supply chain metrics is critical

for supply chain health.

The two metrics comprising our balance measure are revenue growth and

Return on Invested Capital. ROIC is a less well-known metric compared to

Return on Assets (ROA). ROA has a narrower focus. Our research indicates

that ROIC has better correlation with market capitalization and provides a broad

perspective on cash flow generation and profitability based on shareholder

equity.

ROIC is a measurement of the company’s use of capital. The supply chain leader’s goal is to drive

higher returns, through the investment of capital in plant and distribution assets, at a faster rate than

the market rate of the cost of capital in public markets.

To calculate the balance factor, we start with an orbit chart of year-over-year revenue growth and

ROIC. The balance measure in the Supply Chain Index is a mathematical calculation of the vector

trajectory of the pattern of growth and ROIC for the given period. The overall trajectory of this vector

from Year 0 (2006 or 2009) to the ending year (2013) is simplified into a single value which

represents the company’s ability to balance growth and ROIC.

Page 11

In the calculation, companies that were able to drive improvement in both year-over-year growth and

ROIC metrics score the best, while companies that deteriorated in both metrics do the worst. A

negative number on the balance score means that the company lost ground on the metrics compared

to the starting year. In this report, we calculate this factor for two time periods. Our initial analysis

considers performance based upon a time period of 2006-2013. Additional analysis focuses on a

narrower time period of 2009-2013. Our goal is to examine corporate performance during and after

the Great Recession of 2007-2008. The balance metric comprises 1/3 of the total Supply Chain

Index calculation.

Strength

A successful supply chain is strong while driving year-over-year improvements. For most supply chain

leaders, the two most important metrics are costs and inventory management. In the calculation of

the Supply Chain Index, we use operating margin and inventory turns. These two metrics are more

directly influenced by supply chain decisions than other broader corporate metrics. It is for this reason

they are the two components of our strength metric.

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 period of 2006 (or 2009) to 2013. Inventory turn and operating

margin performance is graphed on an annual basis from an origin point (0,0)

representing performance on the two metrics at Year 0 (2006 or 2009). The

overall trajectory of this vector from Year 0 (2006 or 2009) to the final year

(2013) 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 strength metric 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. The best performance has a high value for the strength factor.

Resiliency

Resiliency is an adjective easily tossed around as one of the key qualities of a successful supply

chain. However, the concept of resiliency is more difficult to define, and there is rarely clarity among

stakeholders as to what resiliency is or should be. Here we provide a clear and concise definition.

Page 12

As we plotted orbit chart after 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 this. To accomplish this goal, 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.

In our March 2014 report: Supply Chain Metrics That Matter: Improving Supply

Chain Resiliency, we define resiliency as the tightness of the pattern of

performance on an orbit chart at the intersection of inventory turns and

operating margin.

We also use these two metrics to calculate the strength factor. It is our belief

that cost and inventory are largely within the control of the supply chain leader and the tightness of

the pattern (mathematically speaking, the Euclidean mean distance) is a measurement of reliability.

The factor is based on the ability of a supply chain to maintain a tight, consistent pattern across these

two metrics as the business environment shifts and changes over an eight year period (2006-2013) or

five year period (2009-2013).

The resiliency metric is similar to the cash-to-cash cycle in that companies should work to minimize

the value. A smaller value is better with a lower number for resiliency is an indicator of a tighter

pattern and greater reliability in results over the time period. The resiliency metric comprises 1/3 of

the total Supply Chain Index calculation.

Calculating a Score for the Supply Chain Index

In the calculation of the Supply Chain Index score of a company within the industry peer group, the

balance, strength and resiliency values for the factors are populated and stack ranked. The overall

index is a weighting of the three factors.

The details of this work are archived and can be viewed on SlideShare; however, all of the analysis is

not included in this report due to the depth of the research. In this archived research, to calculate a

Supply Chain Index value, we start by creating a table like the one in Table 3 for each industry peer

group for the periods of 2006-2013 and 2009-2013. We first calculate the factors for balance, strength

and resiliency and then we stack rank the companies within the peer group. In the analysis of the

Supply Chain Index this year, the factors are equally weighted to give a final stack ranking. This stack

Page 13

ranked weighting may change in future analysis in subsequent years as we learn more and more

about the relationship of the factors to supply chain excellence.

Table 3. Supply Chain Index Ranking System

In the analysis, each industry segment, as defined by NAICS classification codes, was analyzed

independently, peer group by peer group. As a result, Intel Corporation will not be directly compared

against Ford Motor Company or Wal-Mart Stores, Inc. The definition of a best-in-class supply chain

varies by the complexities and realities of the operating environment and it is not a one-size-fits-all

business environment. We strongly believe that you cannot compare companies with a simple

spreadsheet analysis. Instead, we believe that it requires a deep analysis of the industry patterns

between the metrics.

Why the Time Period Matters

The Supply Chain Index is a measure of improvement. For this reason, the beginning year of the

measurement and the period of time measured are of critical importance to the ranking. It is the basis

for the entire analysis. Initially, we considered the time period of 2000-2013. However, in the

development of this report, supply chain leaders gave us feedback that 14 years was too long. The

current rigors of global supply chain management are so different from what they were in 2000.

Based on this feedback, we have adapted the methodology to focus on two different time periods:

2006-2013 and 2009-2013. (Due to data availability, the earlier reports for the Healthcare Value

Network and Consumer Value Network ended with 2012 data comparisons.) However, here for the

final analysis, we have added 2013 performance to archived analyses to enable the reader to

understand the relative progress of the companies studied. It is our goal to complete this study

Page 14

annually to give supply chain leaders both a sense of their individual performance within a peer group

and that of their competitors to help leaders know what is possible.

In evaluating the data, we believe that he larger time period of 2006-2013 encompasses the

recession and its aftermath, and is a good study of resiliency. The 2009-2013 time period takes a

narrower focus on the recovery from the Great Recession. In some industries, the rankings change

drastically based on the timeframe. We see this less in the industrial value network than we saw in

the analysis of the consumer and healthcare value networks. We believe that this is due to greater

supply chain maturity in the semiconductor, consumer electronics, and high-tech and electronics

industry.

Supply Chains to Admire

It is easy to get bogged down in the analysis and miss the bigger picture. The Supply Chain Index is a

measurement of improvement. Companies making the biggest improvement often will have the most

to lose. A top performing company will make change more slowly. As a result, the Supply Chains to

Admire list depends on Supply Chain Index scores (improvement) as well as performance averages.

To make our Supply Chains to Admire list, we developed a list of companies that have posted

balanced performance in inventory turns, operating margin, and ROIC, while making progress on the

Supply Chain Index. To make the list, the company had to outperform in all three categories while

driving an above average level of improvement for the industry. The company performing at the

highest level may not rate the highest on the Index. It is just harder to drive improvement when you

are already a top performer.

Page 15

Executive Overview Supply chain excellence matters. It can make or break corporate performance. To drive

improvements, companies need a clear definition of supply chain competency. It is easier to state

than to define, and the market is full of beliefs that are not grounded by hard, cold facts.

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. The reason? The supply chain is not well-understood by executive

teams, and many companies have pursued a project-based approach (implementing multiple projects

with ROI above a threshold) or a focus on vertical excellence (where functional charters create very

strong functional excellence); however, this is misguided. We do not find that these two approaches

make a difference. Instead, we find that it is supply chain leadership driving resilient, predictable, and

forward-looking processes that drives sustained balance sheet improvement. We find that for top

performers that it happens in a slow and steady pattern versus the big-bang approach.

Supply chain leaders want to drive excellence. By their nature, these leaders are competitive. They

want to drive 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, 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

now is a way to gauge improvement.

Collecting the data and doing the analysis in this report is the result of a 24-month effort. We were

fearful at the end of the process that it would be difficult to pick the top performers, but we should not

have worried. When we applied the methodology, the top companies hopped off the page. They were

easy to spot. Listed by industry, the Companies to Admire are listed in Table 4. Within a peer group,

we place them within alpha order. Due to the complexity of the analysis it is hard to rate them more

granularly.

Page 16

Table 4. Companies to Admire

No companies made the list from the contract manufacturing, medical device, paper, pharmaceutical

or retail peer groups. Likewise, there were more companies that made the list in the industrial than

the consumer value networks.

Measuring Supply Chain Improvement

Why does the definition matter? 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.

Page 17

This is the goal of this report. The combination of analyzing supply chain performance coupled with

The Supply Chain Index gives a clear view of who is a top-performing company. In this research, 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

measures 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.

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. While the financial team is often

backwards-looking at transactions, the supply chain team is forward-looking based on flows. In

the process of goal setting, or strategy definition, there is often a temptation to focus on a

single financial ratio in isolation, like inventory turns, not realizing that the supply chain is a

complex system with tightly interrelated relationships amongst metrics based on supply chain

potential. The management of supply chain performance needs to be a system-based

approach looking at a portfolio of metrics in a holistic manner. We wanted to give both groups

a reference document on what is possible.

3. Understand the Possibilities. Each industry has a unique potential. For example, a

reasonable inventory turns value for a consumer electronics company is significantly different

than that of a medical device company. As a result, the targets or set points need to be

different. Why? The inherent rhythms and cycles of the supply chain—product life cycle, the

time to manufacture the product, demand and supply volatility, and demand shaping

programs—are different. We often see well-intentioned and unaware executives focus on

unreasonable targets for a supply chain performance metric, not understanding the differences

between industries, the need to manage the supply chain as a complex system, and the

market factors that are driving the change. This report is designed to increase awareness in

establishing the best targets for corporate performance for individual companies within an

industry, grounded in real possibilities.

As the reader will quickly assess, not all industries, and not all companies within an industry, are

equal in their understanding of supply chain excellence. Each of the industries has struggled with

Page 18

their own issues, and each is at a very different place in the journey to not only deliver supply reliably,

but also redefine value.

Improving Performance on the Effective Frontier

Without a measuring system to gauge performance improvement, supply chain excellence exists in a

world of gray, not black and white. As a result, supply chain leaders are faced with the challenge of

balancing competing priorities without the ability to measure improvement.

The supply chain is a complex system with complex processes with increasing complexity. Improving

supply chain performance requires the management of this complex system of tightly linked and

interrelated metrics. In this complex system, supply chain leaders are attempting to balance four

distinct priorities: improving growth, improving profitability, reducing cycle time, and managing the

ever-increasing complexity. We termed this the Supply Chain Effective Frontier as seen in Figure 4.

Figure 4. The Supply Chain Effective Frontier

In the development of the Supply Chain Index, we selected a metric from each category of the

Effective Frontier model and mapped the patterns of the companies within an industry by orbit chart

to understand the patterns over time. For Growth, we selected year-over-year revenue growth. For

Profitability, we selected operating margin. For Cycle, the Index uses inventory turns, and for

Complexity, the Supply Chain Index analyzes ROIC performance. It is our belief that the supply chain

is both an engine of growth, and a powerful lever to control costs and inventory.

Each industry is driven by different market factors. While the automotive industry is currently

experiencing boom times, growth and complexity are taking their toll on consumer products and

pharmaceutical companies. Using the Supply Chain Index methodology, the reader can see that the

Page 19

worst impacts were in the consumer electronics industry. In consumer electronics, companies are

battling extreme volatility while losing ground on the management of inventory turns and operating

margins in a declining market. The resiliency factor is high, and they are losing considerable ground

on both the strength and balance factors. However, the reader should note that in these tough

markets emerged some of the best stories of supply chain leadership. These macro impacts are

outlined in Table 5.

Table 5. Supply Chain Index Industry Performance for the Period of 2009-2013 with a Comparison of Trends from

2006-2013

In the study, only two industries—automotive and medical device—improved balance in 2009-2013

compared to 2006-2013. The decline in growth permeated most industries and eroded the scores on

Page 20

the balance factor. As growth receded, companies struggled to maintain balance and strength. Nine

out of 13 industries saw erosion in the strength factor. This is due to the decline in operating margins

and growing inventories. Resiliency is the factor that showed the most improvement. All but three

industries improved resiliency. Only the automotive industry improved all three factors.

What Is a Value Network? To better understand the patterns, this report is focused on three value networks. A value network is

a collection of industry-specific supply chains spanning across companies to deliver value to a

common customer. Here we analyze industry progress for the consumer value network (retail,

consumer packaged goods, food/beverage, apparel, chemical and packaging), healthcare value

network (pharmaceutical and medical device manufacturers) and industrial value networks

(automotive, automotive suppliers, consumer and industrial electronics, and semiconductor

industries). In the delivery of goods and services, the relationships are not linear, they are complex

with many links between trading partners.

We live in a world where supply chains, not companies, compete for

market dominance. But companies often have diverging incentives and interests

from their supply chain partners, so when they independently strive to optimize

their individual objectives, the expected result can be compromised.”

Hau L Lee, Triple-A Supply Chains, Harvard Business Review, October

2004

The goal for many supply chain leaders is to collaborate with trading partners and improve costs and

inventory across the value network. This has not happened.

Within each value network, we find that each company operates on its own Effective Frontier and

occupies a different portion of the chart. The patterns are nonlinear and many companies are moving

backwards on one or both of the critical metrics. Interestingly, many companies like Flextronics

International Ltd and Dow Chemical have returned to exactly the same place where they started.

The selection of companies for Figures 5 through 7 represents the progress of leaders. Each figure

illustrates a different value network. Companies that were making the best improvement and

operating at high levels of performance were selected for these charts. While companies have talked

Page 21

for many years about supply chain collaboration and the improvement of the supply chain through

companies working together, we do not see this in balance sheet results. Instead, we see each

company within a network working within a distinct plane of performance without an overall

improvement in the value network.

Figure 5. Consumer Value Network

Despite the claims of technology leaders, consulting partners and advertisements in airports, as

shown in Figures 5, 6 and 7, most companies are struggling to make year-over-year improvements.

While each company can drive positive change in the short-term, in the longer-term, there are

limitations of what is possible.

Page 22

Figure 6. Healthcare Value Network

Figure 7. Industrial Value Network Orbit Chart

Page 23

The greatest improvement happens when five conditions exist:

1. A Clear Definition of Supply Chain Excellence by Leadership. There is no substitute for supply

chain leadership. These results cannot happen from the bottom-up. The gap in understanding of

supply chain leadership is the first place to start.

2. Strong Horizontal Processes. The second focus needs to be on building strong horizontal

processes, focused outside-in, using channel demand and market signals. The goals of these

horizontal processes of revenue management, Sales and Operations Planning (S&OP), supplier

development, and Corporate Social Responsibility (CSR), help to bridge the gaps between the

functions and create organizational alignment.

3. Intentional Design. Supply chain excellence is based on the conscious design of flows. Examples

include the design of buffers, push/pull decoupling points, form and function of inventory, and

postponement strategies. There are two buffers in the supply chain to absorb demand and supply

volatility—inventory and manufacturing—with the outsourcing of manufacturing, the primary buffer

of the supply chain is inventory.

4. Value of Supply Chain Planning and Analytics. Most of the leaders in this analysis are good at

supply chain planning. They don’t argue about if it matters, they understand the value and are

focused on driving improvements.

5. Development of Organizational Capabilities. One of the reasons that Colgate has outperformed

is the design of the organization. For ten years, Colgate has had a strong supply chain finance

team. This clear focus on metrics and the definition of a supply chain finance and human resource

function enables results. Similarly, the building of the Intel Masters program, which defined a clear

career path for supply chain professionals was fundamental to driving their improvements.

Each industry has its own challenges. Retail is defining multi-channel; consumer packaged goods

companies are struggling with product complexity and intense competition; the pharmaceutical

companies are facing a patent cliff and competition with generic drug manufacturers; while the

semiconductor manufacturers are struggling with shorter cycles; and consumer electronics

manufacturers are trying to manage short inventory cycle times and rapidly shifting consumer

demand. The list could go on and on. Understanding the reality of the industry, and the starting point

for improvement, is a critical piece of the puzzle to determine metrics set points and defining supply

chain excellence.

Progress within the Consumer Value Network

Each industry within the consumer value network is struggling with declining growth. As the volume

sold declines, complexity has increased. Improving operating margin and inventory turns is a constant

struggle. While revenue/employee increased, labor efficiency did not translate into lower margins.

Page 24

Table 6. Overall Trends in the Consumer Value Network

Retail

Stores are closing. New formats are being defined. The race for omni-channel is on. The face of retail

is going through a massive change. With the redefinition of the store, as shown in Figure 8, most

retailers are going backwards on operating margin and inventory turns. The asterisks in the chart

mark the first year (2009) of the pattern.

While it is not clear which retailer did the best on meeting supply chain goals, it is clear that Sainsbury

and Tesco lost massive ground. In Figure 9, note the uneven retail performance. Companies perform

better on singular metrics than improving a balanced portfolio of metrics on the Effective Frontier.

This industry is still in the middle of massive change and process redefinition.

Page 25

Figure 8. Retail Orbit Charts for 2006-2012

Figure 9. Retail Performance for 2006-2013

Page 26

Apparel

Apparel was transformed by outsourcing of cutting and sewing early in the decade. These labor

arbitrage strategies increased inventory in the beginning of the decade, and in the period of 2006-

2013, the industry began to stabilize.

Figure 10. Orbit Charts for Apparel for 2009--2012

With a closer look at the data in Table 7, it is clear that Nike and Ralph Lauren outperform their peer

group and drove significant improvement in the period of 2006-2013 and 2009-2013. Hanesbrands is

driving the fastest rate of improvement; but as the chart clearly shows, there is a great gap for the

company to close. While The Gap drove higher levels of performance, they are not driving the same

levels of improvement as Nike or Ralph Lauren.

Page 27

Table 7. Performance of Apparel Companies

Consumer Packaged Goods

No doubt about it, the consumer packaged goods company feels squeezed. The race has slowed for

global growth and retailers are more competitive with their house brands. As a result, growth has

declined from 6% to 3%.

As the effectiveness of national advertising changed radically, the marketing response was to add

more products and increase the amount of in-store promotion to drive differentiation. As a result, the

average product portfolio increased by 30%. With the increase in promotions, demand error and bias

also increased.

Under these tough conditions, every consumer products company on the list struggled. Colgate

posted the best performance while driving improvement. With over 42 consecutive quarters of

improving operating margin and driving superior performance on ROIC, Colgate makes the list of

companies to admire.

Reckitt Benckiser’s global focus on products that are priced for value and delivered reliably gives

them high levels of performance, but they are not included on the final list because they are not

driving the same levels of improvement.

Page 28

Figure 11. Orbit Charts for Consumer Packaged Goods for the Period of 2009-2012

Table 8. Supply Chain Performance of Consumer Packaged Goods Companies

Ask supply chain leaders who does supply chain best, and the most frequent answer is Procter &

Gamble.1 For many reading this report, they will struggle to understand why P&G is not on the list of

Companies to Admire. In the development of this report, we had many discussions with the team at

1 Bricks Matter, December 2012, Wiley

Page 29

P&G to understand why the company lost operating margin and performed at 1/3 the ROIC value of

Colgate. It is our belief that the company threw the supply chain out of balance through a zealous

focus on inventory, and the rise in complexity was a drag on margin, and ROIC.

Food and Beverage

While consumer packaged goods companies are larger and global, food and beverage companies

tend to be smaller and more regional. With local food preferences and rising commodity prices, food

and beverage companies struggled to maintain ground on margin and inventories. It was a constant

battle. This pressure has increased the focus on improving supply chain performance.

In the face of this pressure, General Mills makes it to the list. The company did a lot of things right.

When other companies outsourced IT and depended on more third-party resources, General Mills ran

counter to the current and invested in building a top-notch internal IT team. The company excels in

the implementation of technologies and has been a poster child for intentional and active design.

They are one of the best companies in both supply chain planning, driving innovation through new

technology approaches, and supply chain design. Over the period, the gap between General Mills

and Kellogg, its closest competitor has grown.

Anheuser Busch InBev N.V. also makes it to the list. With a strong global management team, the

InBev organization has focused on the reduction of complexity and the design of the supply chain for

global reach.

While Hershey has driven the greatest improvement in supply chain performance, they are

underperforming their peer group in inventory. Their progress is significant, but not enough. Likewise,

Campbell’s made significant improvement in the period of 2006-2012, but lost ground in 2013 as they

attempted to implement an Enterprise Resource Planning (ERP) project with too few resources too

fast. This is a pattern that we often see—misjudging implementation times and effort which whipsaws

supply chain performance long after.

Page 30

Figure 12. Orbit Charts for Food Companies for the Period of 2009-2012

Table 9. Supply Chain Performance of Food and Beverage Companies

Page 31

Chemical

The asset-intensive chemical industry has fought back from adverse effects of the recession. With

many mergers and acquisitions, these companies are large, complex and global. With slowing

growth, and product proliferation of their downstream customers, chemical companies struggle to

sense demand. Costs are pushed backwards in the supply chain as CPG companies squeeze

chemical companies on costs and terms.

Figure 13. Orbit Charts for Chemical Companies for the Period of 2009-2012

Two companies from the chemical industry make the list: BASF and Eastman Chemical. BASF at

122B$ revenue is focused on becoming more like a CPG company. They are attempting to sell paint

directly to consumers in Brazil and are aggressively pursuing the health and wellness supplement

products. The company has been aggressive in the adoption of analytics, and the building of supply

chain centers of excellence and Sales and Operations Planning (S&OP). Eastman’s progress is one

of slow, deliberate and steady focus. They have implemented three supply chain planning systems

gaining knowledge each time on how to do well at planning.

Page 32

Table 10. Supply Chain Performance of Chemical Companies

Packaging

No company from the packaging industry makes the list. These companies face a tough market. Each

is being squeezed for margin, and the payment terms are being elongated. Additionally, they have

historically been laggards in the adoption of technologies and new supply chain processes.

Three and four levels back in the supply chain, the packaging companies are struggling more than

chemical companies in driving a profitable supply chain. Packaging occasionally requires last minute

changes and is often a constraint in the supply chain for new product launch. While their downstream

customers want a more agile response with higher artwork capabilities, the packaging sales team is

being squeezed by procurement teams in the face of declining margins and lengthening terms.

While companies like Packaging Corporation of America may drive higher levels of performance than

their peer group, the company is not driving improvement. There are a few companies like Sonoco

Products where consistent and progressive processes are being adopted. Sonoco Products, while

overperforming in inventory turns and ROIC, underperforms on operating margin over the period. The

Company has just not matured to the degree to make the list.

Page 33

Figure 14. Orbit Charts for Packaging Companies for the Period of 2006-2012

Table 11. Orbit Charts for Packaging Companies for the Period of 2006-2012

Page 34

Progress within the Healthcare Value Network

Affordable healthcare. Global supply chain expansion. Changing face of healthcare procurement

through aggregate buying. These are all challenges that healthcare suppliers face.

The customer is also changing. While healthcare suppliers carefully honed their sales and supply

chains to sell the physician, the focus is now on the patient and adapting to the new world of

regulation, serialization and product item standardization to improve traceability. With historically high

margins, it has been hard for the healthcare suppliers to get serious about supply chain excellence.

The companies are typically very large with a strong belief in functional excellence.

Table 12. Industry Trends in the Value Chain for the Period of 2000-2012

Pharmaceutical

Few companies in the pharmaceutical industry are making progress on the Effective Frontier. As

shown in Figure 15, most companies are going backwards. Some exceptions include Biogen and

Novo Nordisk.

No company in the pharmaceutical company meets the criteria to be listed on the Companies to

Admire list. The problem is that the companies in the pharmaceutical industry are driving results in

singular, not a portfolio of metrics making uneven progress. For example, Nova Nordisk drives great

results on operating margin and ROIC, but falls to beat the industry average for inventory turns.

Page 35

Figure 15. Pharmaceutical Company Orbit Charts for 2009-2012

Table 13. Pharmaceutical Company Progress on Supply Chain Excellence

Page 36

Medical Device

Medical device companies are resilient, but they are not strong. They have made little progress over

the last decade; but with the passage of the Affordable Care Act, and in the face of growing

regulations, the industry is consolidating and supply chains excellence is becoming more important.

As a result, no company in the medical device industry makes the list.

Figure 16. Medical Device Company Orbit Charts for 2009- 2012

Page 37

Table 14. Medical Device Company Progress on Supply Chain Excellence

Progress within the Industrial Value Network

Most companies, through technology investment, have created a more efficient supply chain,

reducing revenue per employee, but have struggled to improve both operating margin and inventory

turns. This holds true for the majority of the companies within the industrial value network.

Table 15.Shifts in the Industrial Value Chain for the Period of 2000-2012

Page 38

Automotive

The automotive industry struggled and then boomed. While revenue has been strong, financial results

have been more mixed. The orbit chart in Figure 17 illustrates the performance of 10 automotive

companies studied in this report.

Figure 17. Automotive Orbit Chart 2009-2013

It is clear from the chart that Oshkosh Corporation and Navistar International Corp have struggled.

Volkswagen AG leads the Index rankings for 2006-2013 demonstrating the greatest supply chain

improvement although they are not the leader on either inventory turns or operating margin. Audi

demonstrates supply chain leadership by performing at a higher plateau on average of operating

margin, inventory turns and ROIC, and showing supply chain improvement on the Supply Chain Index

for both 2006-2013 and 2009-2013.

Page 39

Table 16. Automotive Supply Chain Performance

Many are surprised by Toyota Motor Company’s performance on the rankings. While a leader in Lean

thinking and the evolution of supply chain processes, it is clear from the analysis that Toyota has

faltered, especially during the period of 2009-2013. The case of negative balance and strength scores

were too much to overcome to earn a better ranking.

Automotive Suppliers

Automotive suppliers are a critical component of the industrial value chain. They were brutally

squeezed during the depths of the Great Recession and the weakest went bankrupt. Coming out of

the recession many have diversified. Figure 18 illustrates how the industry performed at the

intersection of inventory turns and operating margin on the tail end of the recession from 2009-2013.

There is a significantly wide range of inventory turns values ranging from low single digits to above 20

per year. Valeo SA and Honeywell International SA which lead the rankings for both time periods

have midrange performance on both inventory turns and operating margin. The best overall

performance is demonstrated by TRW Automotive Holdings Corporation.

Page 40

Balance has been difficult for these companies across both time periods. Without a more cooperative

and less adversarial partnership with upstream automotive manufacturers, we see no reason to

expect improvement in the future.

Figure 18. Automotive Suppliers Orbit Chart 2009-2013

Table 17. Supply Chain Performance for Automotive Suppliers (2009-2013)

Page 41

Consumer Electronics

Several specific companies within the consumer electronics industry are often hailed as supply chain

leaders. They have had no choice. The competitive nature of the industry, combined with changing

demand patterns and shortening life cycles for electronics, has required high competency. The orbit

chart for this industry, shown in Figure 19, has been reduced to show the patterns of nine of the most

well-known companies profiled in this report.

Figure 19. Consumer Electronics Orbit Chart 2009-2012

Notice that while automotive suppliers were steadily increasing margins, in consumer electronics

most of the companies are showing a decrease in margin.

The unique business model of Apple Inc. enables the company to outperform its peers on both

inventory turns and operating margin performance. This high level of performance coupled with

innovation puts Apple on the list. Strong performance is also demonstrated by Cisco Systems. A

leader in the design of the end-to-end supply chain, the Cisco team has excelled on the creation of

value networks and sharing data.

Page 42

Table 18. Supply Chain Performance for Consumer Electronics (2009-2013)

Of all of the industries studied, this peer group has weathered the most storms. They are a case

study of why supply chain excellence is fundamental for survival.

Semiconductor

Semiconductor manufacturers have a unique challenge in an industry that must begin developing and

manufacturing products prior to any demand signals. As a result, their balance and strength scores

are low and their resiliency scores are high. Figure 20 illustrates performance of the component

companies at the intersection of inventory turns and operating margin from 2009-2013.

The patterns here are very nonlinear and many are in fact looping over the time period. Taiwan

Semiconductor (TMSC) and Intel Corporation have done the best job of performance and

improvement.

In comparison to other industries, Intel Corporation’s size here seems to be providing it with an

advantage. Economics of scale combined with significant work on talent development and network

design lend them the edge. In parallel, TMSC’s work on open design networks and collaboration with

upstream consumer electronics manufacturers gives it the edge.

Page 43

Figure 20. Semiconductor Orbit Chart (2009-2013)

Table 19. Supply Chain Performance in the Semiconductor Industry (2009-2013)

Page 44

Recommendations In the design of supply chains, it is critical to carefully define supply chain excellence. This report is

designed to help. Use the methodology to carefully answer these questions:

Are you making improvement? The Supply Chain Index is a measuring stick for gauging

improvement. Using the methodology outlined in the Appendix, define the appropriate peer

group and timeframe 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? 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.

Conclusion In the journey towards supply chain excellence, companies need to hold themselves accountable to

balance sheet performance. Too few companies have tied supply chain activities to financial

performance, and seldom do we find a case study of companies working together to drive sustainable

value in a value network.

The patterns are gnarly, but to judge supply chain excellence, performance and improvement need to

be assessed together by peer group. It needs to be viewed over time. The patterns matter. It is a

journey not a sprint. .

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 performed

the best in this time frame have faced the toughest challenges while companies with high margins

and less pressing issues have made less progress. It is our hope that this report can help companies

in all industries drive higher levels of performance.

Page 45

Appendix 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 2006-2013 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

nB nn

.

Strength

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.

Page 46

The strength measure (S) is defined as:

1

1

1

1

1

1

IT

ITIT

OM

OMOM

nS 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

Page 47

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 patter,

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 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

ijdm

R1

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

Page 48

Table A shows the distances between every possible pair of points at the intersection. The 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.

Page 49

Metrics That Matter Reports 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: A Focus on the Chemical Industry Published by Supply Chain Insights in November 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 Pharmaceutical 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

Page 50

Supply Chain Metrics That Matter: A Critical Look at Operating Margin Published by Supply Chain Insights in December 2013 Supply Chain Metrics That Matter: Semiconductors & Hard Disk Drives Published by Supply Chain Insights in February 2014 Supply Chain Metrics That Matter: Aerospace and Defense Published by Supply Chain Insights in March 2014

Other Reports in the Supply Chain Index Report Series Supply Chain Metrics That Matter: Improving Supply Chain Resiliency

Published by Supply Chain Insights in March 2014

Supply Chain Index: Improving Strength, Balance and Resiliency

Published by Supply Chain Insights in May 2014

Supply Chain Index: Evaluating the Consumer Value Network

Published by Supply Chain Insights in June 2014

Supply Chain Index: Evaluating the Healthcare Value Network

Published by Supply Chain Insights in July 2014

Supply Chain Index: Evaluating the Industrial Value Network

Published by Supply Chain Insights in August 2014

About Supply Chain Insights, LLC Founded in February, 2012 by Lora Cecere, Supply Chain Insights LLC is a research and advisory

firm 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 help you understand supply chain trends, evolving

technologies and which metrics matter.

Page 51

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. Her book, Bricks Matter, (co-authored with Charlie

Chase) published on December 26th, 2012. She is currently working on additional

books, The Shaman’s Journal and Metrics That Matter, to publish in 2014.

With over ten years as a research analyst with AMR Research, Altimeter Group, and Gartner

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.

About Abby Mayer Abby Mayer (twitter ID @indexgirl), Research Associate is one of the original

members of the Supply Chain Insights LLC team. She is also the author of the

newly-founded blog, Supply Chain Index. Her supply chain interests include

connecting financial performance and supply chain excellence, as well as talent

management issues and emerging markets. Abby has a B.A. in International

Politics and Economics from Middlebury College and a M.S. in International

Supply Chain Management from Plymouth University in the United Kingdom. She

has also completed a thru-hike of Vermont’s 280 mile Long Trail, the oldest long

distance hiking trail in the United States. As part of the planning and food prep process, she became

interested in supply chain management when she was asked to predict hunger pangs for the entire

three-week trip before departure. If that isn’t advanced demand planning, what is?!?!