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For over a decade, since founding Supply Chain Insights in 2012, I have pounded the keyboard, asking business leaders to think more holistically about the impact of supply chain decisions on the firm’s value, the improvement of a value chain, and the impact on the environment. Functional Metrics and the Lack of Alignment to Strategy.
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.) As shown in Figure 1, the results for the period of 2012-2021 tell the story.
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.
In 2012, I placed the first alignment study in the field. Organizational Alignment 2012. Functional Metrics. With the implementation of transactional systems, the focus was on measuring and controlling functional metrics like the lowest manufacturing cost or purchase price variance in procurement.
The relationship between corporate financial performance and supply chain metrics was complex; and in my first attempts, I was unable to derive a correlation. The year 2012 marked the 30th anniversary of the use of supply chain management as a cross-functional process for source, make and deliver in the commercial sector. Definitions.
Background In January 2012, Forbes published the article named " Who Are The Top 50 Social Media Power Influencers? " Related Metrics There are 3 other metrics dedicated to the measurement of social media influence as below, 1) Klout develops Klout Score, the number between 1-100 that represent influence (the ability to drive action).
When I started my business in 2012, I frequently wrote about the future using the moniker of Supply Chain 2020. Use data and new metrics systems to free the organization from the ball and chain of corporate politics. Use data and new metrics systems to free the organization from the ball and chain of corporate politics.
The industry first started speaking of digital in 2012, but today, it is still an amorphous concept. (My My first digital supply chain presentation was in Milan at an SAP Insider conference in 2012.) Traditional planning taxonomies focus on the optimization of functional metrics.
Early 2012 marked the end of the third decade and 2013 finds us into the fourth. It will be nice to be home and to have time to write on this second book, Metrics that Matter. Supply chain management, as a practice in commercial operations, is now thirty years old. How would you have answered the question? Anything you would add?
This year, we will publish two new books: Supply Chain Metrics That Matter and The Shaman’s Journal. We are adding these two new books for your bookshelf to stand beside Bricks Matter which published in December, 2012. Supply Chain Metrics That Matter will publish in December 2014. It is hard to not get cranky and out-of-sorts.
It is a quest and the subject of my next book, Metrics That Matter , that will publish in September, 2014. We used the period of 2006 to 2012 to build the model and we used the formula to attempt to predict 2013. .” As I shuffle along, I am not sure. I shake my head. Why Does It Matter? The result is outlined in figure 1.
Abby and Mikey on my team have built a database of financial ratios from publicly available balance sheets from 1995-2012. We are trying to understand how supply chain leaders have raised the bar at the intersection of these four sets of metrics on the supply chain effective frontier. reference Carbon Disclosure Project 2012).
We selected these metrics based on correlation work with Arizona State University in 2012. The winners drove long-term value (measured by market capitalization) while outperforming on the portfolio of metrics shown in Figure 1 and driving improvement faster than their peer groups. Celebrating Success. Target Setting.
We founded Supply Chain Insights on February 9th, 2012. Over the course of 2012, I feel that we made a lot of progress. The focus of this conference will be the evolution of Supply Chain Metrics that Matter and the launch of the Supply Chain Index (a formulaic representation of supply chain excellence by peer group).
Results in the Automotive Industry for the period of 2012-2021. Companies driven by functional metrics struggled: they could not adapt quickly to the higher transportation costs.). As we brace for the future of continued and unplanned disruption, the knee-jerk reaction is to tighten functional metrics. Conclusion.
Based on literature review by Behdani et al 2012 called " How to Handle Disruptions in Supply Chains – An Integrated Framework and a Review of Literature ", academic articles in this area is centered around 2 themes, namely, Risk Management (before disaster strikes) and Disruption Management (after disaster strikes). Literature Review.
We have found that supply chain metrics are gnarly and complicated.During During the period of 2006-2012, Campbell Soup Company outperformed its peer group on the Supply Chain Index. Food and Beverage Company Performance on the Supply Chain Index for the Period of 2006-2012. We named it the Supply Chain Index.
I have taken myself off the road to write the book Metrics That Matter. You just do not see the patterns of the interrelationships of metrics in an Excel spreadsheet. The Index will rate every publicly held company on strength, resiliency and balance for the period of 2000-2012. It is a slow week. It is tedious. Related.
Bottom Line: Manufacturers are reaching a new level of results in 2018 because they have clearer, more actionable insights based on real-time manufacturing and quality metrics than ever before. Quality Metrics Enable Customer-Driven Manufacturing Networks. Quality Metrics Defining the Future of Manufacturing.
Which supply chain metrics correlate to market capitalization by Morningstar sector? In 2012, supply chain process evolution was thirty years old, and I wanted to use the book, Bricks Matter, as a litmus test to tell the story of success. Which companies have made year-over-year improvements? Results of the Supply Chain Index.
The most popular posts are on demand management and Supply Chain Metrics that Matter. In 2012, I am proud that we have published 24 reports, completed 14 quantitative research studies and have had over 72,000 views of our work on Slideshare. Over the course of 2012, I feel that we made a lot of progress.
My first training in 2012 was with Ideo. Remember the need for goal clarity, rules, and clear metrics in my opening paragraph? ” My reply is a tangled web of realizations, but let’s start with the definition and then explore the issues. Lessons Learned From Design Thinking.
One of my favorite interviews on this topic, that I recently completed for my upcoming book Metrics That Matter , was with Amway’s Chief Supply Chain Officer George Calvert. Service level is our most important metric. Reliability in both of these metrics is critical. Our activities are broad.
I think about this discussion with Keith often as I work on the Supply Chain Index and edit the chapters of Metrics That Matter. In Figure 1, I share a composite orbit chart of progress of Cisco Systems, Intel, Samsung and Flextronics on the Effective Frontier at the intersection of inventory turns and operating margin for 2006-2012.
In the Supply Chain Metrics that Matter table, we can clearly see that “operating margin” and “inventory turns” matter to public financial performance. Each faces four years of deterioration on this important supply chain metric. They measured out-of-stocks at the shelf and they made improvements.
As I’ve commented in previous postings, if you are a 3PL or transportation company and you’re not involved in cross-border shipping with Mexico, then you are missing out on a growing business opportunity (see Reuters article from December 2012).
Completed in 2012, the ERP project forced the company to standardize organizational design, roles, and metrics. When the price of oil dropped from $120 per barrel in 2012 to the staggering $29 per barrel in 2015, everyone in the oil and gas industry felt the impact. A Brief History of IT Investments. The reason?
Comparison of Industry Players Within Consumer Goods for the Period of 2012-2021. The focus needs to move from functional metrics to balanced scorecard outcomes. Functional metrics insulate organizations and throw the supply chain out of balance.
These examples point to a key metric that’s emerging for quantifying the value of social networking : Time-to-Resolution. According to a McKinsey & Company report from July 2012 , “[social networking technologies], which create value by improving productivity across the value chain, could potentially contribute $900 billion to $1.3
I began analyzing correlations of groups of metrics to market capitalization and found that the most significant correlation was between market capitalization and growth. Initially, I worked with Arizona State statistics professors and graduate students to correlate market factors to 2006-2012 data.)
Comparison of Owens Illinois Versus Sonoco Products for the Period of 2000-2012. Alignment on a Metrics Portfolio. In 2012, Sonoco was listed in the top one hundred Corporate Responsibility’s 100 Best Corporate Citizens and listed for two consecutive years as one of Fortune’s most admired companies.
When Cisco saw news of wildfires in Colorado in 2012, it wasn’t concerned, because it had no manufacturing or suppliers in the area. The post Guest Post: Ignoring this Performance Metric is Risky appeared first on Connect Blog by TMC, a division of C.H. But even watchful companies can still miss the potential impact of a disruption.
Comparison of Owens Illinois Versus Sonoco Products for the Period of 2000-2012. Alignment on a Metrics Portfolio. In 2012, Sonoco was listed in the top one hundred Corporate Responsibility’s 100 Best Corporate Citizens and listed for two consecutive years as one of Fortune’s most admired companies.
Overall Results on the Supply Chain Metrics That Matter. I was challenged on this in 2012 by a client, and it forced me to do deeper research. I started this research in 2012 with the writing of Bricks Matter , and it continues today. Supply chain leaders make progress in three-to-five years. It is seldom a step change.
Figure 1 came from the 2012 study. (We E2open went public in July 2012 and in February 2015 participated in a private buy-out for $273M by Insight Venture Partners. Lora has written the books Supply Chain Metrics That Matter and Bricks Matter , and is currently working on her third book, Leadership Matters.
performance metrics to influence vendor behavior and impact sourcing choices. As performance reporting metrics capture vendor performance, the company can substantiate penalties for noncompliance and poor performance, recognize or reward high performers, and incent positive results and consistent behavior. Sourcing uses P.O.
The selection of metrics is based on prior work with Arizona State University to understand which metrics, in combination, correlate to market capitalization and price to book value. We calculate the results based on public data from the period 2012-2021. Why do we spend four months doing this?
They built them between 2012 and 2014, and then enhanced them when better supply chain risk management solutions became available. Agility is more about reacting in the next day or two, or even the next hour or two, to potential supply chain disruptions. The company has built Control Towers for this purpose.
While, in 2012, SAP acquired Ariba. After a very tough decade, the Supply Chain Operating Network solutions were evolving with strong development plans during the period of 2012-2015. . Lora has written the books Supply Chain Metrics That Matter and Bricks Matter , and is writing her third book, Leadership Matters.
By 2012 Quiet had revenues of $37 million, was profitable, and in no need of any more investment. “If Their metrics just don’t make sense. We just needed the robots to satisfy the demand. They totally got that.”. Ultimately, Mr. Welty and his team raised $9.5 million to support the Quiet Logistics business model.
In July 2012, E2open went public with a market capitalization of 442M. Supply Chain Metrics That Matter has been selling briskly on Amazon, and we are actively working on the program for the Supply Chain Insights Global Summit on September 9th and 10th, 2015.The Do not put time-dependent shipments through these ports at this time.
Chainalytics Creates New Metrics for Demand Planning Consortium. In other news… Descartes Signs SuiteCloud Developer Network Agreement With NetSuite. HighJump Software Announces New Partnership With NetSuite. UPS App For iPad Advances Suite Of Customer Technology Offerings. Maersk warns on slowing global trade ( Financial Times ).
That was the question Michael Uskert, managing vice president, Gartner, asked at the end of the day 1 keynote at Gartner’s 2012 Supply Chain Executive Conference. What is your moon? The supply chain is hard and you need the right, enabling technology in place.
That was the question Michael Uskert, managing vice president, Gartner, asked at the end of the day 1 keynote at Gartner’s 2012 Supply Chain Executive Conference. What is your moon? The supply chain is hard and you need the right, enabling technology in place.
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