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Uh-Oh! Insights On How P&G Failed And What This Means For You

Supply Chain Shaman

At each company, there is a relationship between the metrics of growth, margin, inventory, customer service, and asset strategy. For the purpose of this article, I will use Return on Invested Capital (ROIC) as the proxy metric to discuss asset utilization.) Shown in Figure 2, we track the results for the period from 2006-to 2021.

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Congratulating the Supply Chains to Admire Winners

Supply Chain Shaman

It is now our fifth year of analyzing balance sheets to understand which companies are outperforming their peer groups on the metrics of growth, operating margin, inventory turns and Return on Invested Capital (ROIC) while driving improvement. Wal-Mart and TJX Orbit Chart for Operating Margin and Inventory Turns for the Period of 2006-2017.

Gartner 277
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Mush

Supply Chain Shaman

As a result, the metrics have to be viewed together as a pattern over time. In the journey, the supply chain leader needs to improve the potential of a portfolio of metrics. The metrics of growth, Return on Invested Capital, Inventory Turns and Operating Margin have the highest correlation to market capitalization.

Gartner 366
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How Can We Heal the Global Supply Chain?

Supply Chain Shaman

In my work tonight, I carefully studied 2006-2015 financial results to select the Supply Chains to Admire winners. The winners drive improvement while posting financial results in the Supply Chain Metrics That Matter ahead of the peer group. Higher percentage of growth than the industry average for the period of 2006-2015.

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Q&A on the Supply Chains to Admire

Supply Chain Shaman

The companies were selected based on performance better than peer group for 2006-2013 and delivering better than average improvement within the peer group as determined by the Supply Chain Index. We find that companies will establish metric targets in isolation and throw the supply chain out of balance.

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Make Room for Leadership to Drive S&OP

Supply Chain Shaman

How aligned do you believe your organization is to drive these metrics? This research, completed in 2006, was during the transformation of multi-national to global supply chains. In assessing the health of the plan, what do you measure? Is your plan feasible? Did past plans prove valuable?) Were they used?

S&OP 393
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Provoking the Industry to Move Past Incrementalism

Supply Chain Shaman

To make the argument, let’s look at industry orbit charts in aggregate for the period of 2006-2017 for the apparel and chemical companies. An orbit chart is a plotting of data at the intersection of two metrics. In this case, the metrics are operating margin and inventory turns. We are not improving balance sheets.