What is supply chain excellence? In this powerpoint, we analyze and compare two methodologies--The Supply Chains to Admire by Supply Chain Insights and the Gartner Top 25. There is no perfect method: both give insights. Note the differences in industry sectors and the gap in business leader perceptions when compared to corporate performance.

1. Comparison
Supply Chain Insights LLC. Copyright © 2020
1
The Supply C hains t o A dmire A nalysis C ompared t o The
Gart ner Top 25 f or 2020

2. Comparison Gartner Top 25 Supply Chains to Admire™
Focus Fortune Global 500 and Forbes 2000
lists.
12$B minimum annual revenue.
(roughly 300 companies)
All public companies by analyzed by industry
peer groups. 440 companies by 28 peer
groups. No revenue minimum. There is no limit
on the number of winners peer group.
Likewise, there may be no winner by industry.
Analysis 2017-2019 2010-2019
Calculation 50% Opinion: (Equally split between
analyst and peer voting)
50% Quantitative Analysis:
• Revenue Growth (3-year weighted
average)-10%
• Inventory Turns (one-year
average)-5%
• Return on Physical Assets
(ROPA). Three-year weighted
average -15%
• Environmental, Social and
Governmental responsibility (3rd
party indexes)-15%
Improvement: Top 2/3 ranking on the Supply
Chain Index.
Performance: At or above the industry mean
for:
• Year-over-year revenue growth.
• Operating margin.
• Inventory turns.
• Return on Invested Capital (ROIC).
Value: At or above the mean for Price-to-
Tangible Book or Market Capitalization.
Index Calculations: https://www.slideshare.net/loracecere/sci-summit-2014-math-behind-sc-
index?qid=27326733-0325-4ee7-aacd-e2827bd216de&v=&b=&from_search=11
History 16th Year 7th Year
Methodology Comparison: Gartner Top 25 and Supply Chains to Admire

3. Industry Averages: Retail
3
Supply Chain Insights LLC. Copyright © 2020
Number of Companies in the Supply Chains to Admire: 3
Number of Companies in the Gartner Top 25: 5
Sectors listed in descending order based on margin.
Average
Revenue
(M$)
Year-over-
Year Growth
Inventory
Turns
Operating
Margin
Return on
Invested
Capital
Price to
Tangible
Value
Retail
Restaurants 20 2,756 10.5% 10.19 15.4% 29.9% 15.53
Apparel 91 8,081 5.3% 4.61 9.7% 16.4% 4.35
Drug 8 54,264 8.9% 5.66 7.8% 12.8% 3.30
Broadline 20 47,883 3.1% 4.37 6.9% 10.6% 3.07
Home Improvement 8 22,936 6.8% 4.10 4.7% 5.2% 10.41
Grocery 10 44,355 3.2% 12.81 3.5% 12.5% 2.15
Number of
Companies Average for 2010-2019

4. Supply Chain Insights LLC. Copyright © 2020
4
Industry Averages: Process
Number of Companies in the Supply Chains to Admire: 7
Number of Companies in the Gartner Top 25: 13
Sectors listed in descending order based on margin.
Average
Revenue
(M$)
Year-over-
Year Growth
Inventory
Turns
Operating
Margin
Return on
Invested
Capital
Price to
Tangible
Value
Process
Pharmaceuticals 34 26,568 7.6% 2.36 20.4% 9.7% 5.53
Consumer Nondurables 11 18,618 1.9% 4.76 16.5% 14.5% 28.75
Beverages 36 10,070 5.6% 5.07 15.3% 9.6% 4.20
Oil & Gas 47 37,773 6.6% 14.94 11.5% 3.0% 1.71
Chemical 42 9,662 3.3% 4.74 11.1% 8.4% 2.31
Personal Products 15 8,262 3.4% 2.80 10.6% 10.5% 3.73
Containers and Packaging 34 7,649 6.5% 6.50 9.8% 6.9% 3.32
Food Manufacturing 19 12,236 5.2% 6.76 9.8% 7.1% 2.66
Number of
Companies Average for 2010-2019

5. Industry Averages: Discrete
5
Supply Chain Insights LLC. Copyright © 2020
Number of Companies in the Supply Chains to Admire: 12
Number of Companies in the Gartner Top 25: 8
Sectors listed in descending order based on margin.
Average
Revenue
(M$)
Year-over-
Year Growth
Inventory
Turns
Operating
Margin
Return on
Invested
Capital
Price to
Tangible
Value
Discrete
Medical Device 31 5,619 7.48% 2.89 17.5% 10.1% 3.96
Semiconductor 35 9,369 13.4% 4.66 15.4% 9.4% 3.41
Diversified Industries 26 13,736 3.5% 5.03 13.8% 9.3% 2.71
Telecommunications 18 17,208 7.8% 10.93 11.8% 9.1% 2.13
Apparel 27 7,973 8.6% 2.39 11.8% 13.6% 2.86
Automotive Aftermarket 37 11,288 6.8% 7.68 10.1% 10.0% 2.35
Tires 4 11,938 1.2% 4.51 9.6% 10.2% 1.72
Aerospace & Defense 26 18,899 3.0% 6.84 9.4% 10.0% 3.12
Trucks and Heavy Equipment 17 16,770 5.2% 4.54 8.0% 7.4% 1.91
Consumer Durables 19 15,569 7.6% 4.36 7.4% 8.5% 1.98
Automotive 21 99,331 5.8% 6.55 6.1% 5.8% 1.22
B2B Technologies 28 29,684 5.5% 6.97 6.7% 6.5% 2.07
Furniture 17 1,785 4.3% 5.89 5.8% 14.1% 4.25
Contract Manufacturing 7 6,307 5.8% 6.10 3.6% 6.3% 5.60
Number of
Companies Average for 2010-2019

6. Orbit Charts for
Gartner
Top 25 Winners
Supply Chain Insights LLC. Copyright © 2020

7. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2019
3.5
4.0
4.5
5.0
5.5
6.0
0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24
InventoryTurns
Operating Margin
3M Co. Diversified Industries
MMM
0.22, 4.25
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Diversified
Industries
0.14, 5.08
3M Orbit Chart
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

8. 2010
2011
2012
2013
2015
2016 2017
2018
2019
2010
2016
2019
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
0.17 0.19 0.21 0.23 0.25 0.27 0.29 0.31 0.33 0.35 0.37 0.39 0.41
InventoryTurns
Operating Margin
Abbvie Inc Pharmaceuticals
ABBV
0.31, 2.94
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Pharmaceuticals
0.21, 2.32
Abbvie
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

9. 2017
2018
2019
2010
2019
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0.07 0.10 0.13 0.16 0.19 0.22 0.25 0.28 0.31 0.34
InventoryTurns
Operating Margin
Alibaba Ecommerce
BABA
0.29, 11.02
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
ECommerce
0.13, 23.43
Alibaba
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

10. 2010
2019
2010
2011
2012
2013
2014
2015 2016
2017
2018
2019
0.0
10.0
20.0
30.0
40.0
50.0
60.0
-0.02 -0.01 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20
InventoryTurns
Operating Margin
Amazon Ecommerce
AMZN
0.03, 8.98
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
ECommerce
0.13, 23.43
Amazon
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

11. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2019
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
110.0
0.06
InventoryTurns
Operating Margin
Apple B2B Technology
AAPL
0.29, 57.64
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
B2B
Technology
0.08, 8.64
Apple
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

12. 2010
2011
2012 2013
2014 2015
2016
2017
2018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
1.0
1.5
2.0
2.5
3.0
0.02 0.05 0.08 0.11 0.14 0.17 0.20 0.23 0.26 0.29 0.32 0.35 0.38 0.41 0.44 0.47 0.50
InventoryTurns
Operating Margin
Biogen Idec Inc Pharmaceuticals
BIIB
0.41, 1.58
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Pharmaceuticals
0.19, 2.36
Biogen
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

13. 2010
201120122013
2014
2015
2016
2017
2018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
5.0
6.0
7.0
8.0
-0.02 -0.01 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12
InventoryTurns
Operating Margin
Bayerische Motoren Werke AG Automotive
BAMXF
0.10, 6.18
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Automotive
0.04, 7.28
BMW
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

14. 2010
2011
2019
0.5
0.00 0.50
InventoryTurns
Operating Margin
British American Tobacco
BTAFF
0.35, 0.82
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
British American Tobacco
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario
Company shown without peer group
due to the few players in the
industry

15. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
201910.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
0.09 0.11 0.13 0.15 0.17 0.19 0.21 0.23 0.25 0.27 0.29
InventoryTurns
Operating Margin
CISCO Systems Telecommunications
CSCO
0.24, 12.00
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Telecommunications
0.12, 13.67
Cisco
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

16. 2010
2011
20122013
2014
2015
2016
2017
2018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2.0
3.0
4.0
5.0
0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24
InventoryTurns
Operating Margin
Hennes & Mauritz AB (H&M) Apparel Retail
HMRZF
0.15, 3.12
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Apparel Retail
0.10, 4.61
H&M
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

17. 2010
2011
2012
2013
2014
2015
2016
20172018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
4.0
5.0
6.0
0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27
InventoryTurns
Operating Margin
Colgate-Palmolive Household - Non-Durable
CL
0.24, 5.15
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Household
Non-Durable
0.16, 4.75
Colgate-Palmolive
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

18. 2012
2013
2014
2015
2016
2017
2018
20192010
2011
2012
2013 2014
2015
2016
2017
2018
2019
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10
InventoryTurns
Operating Margin
Hewlett Packard Enterprises Co
HPE
0.06, 8.83
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
B2B
Technology
0.08, 8.64
2010
2011
HP
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

19. 2010
2011
2012
2013
2014
2015
2016
2017
20182019
2011
2012
20132014
2015
2016
20172018
2019
0.0
1.0
2.0
3.0
4.0
5.0
0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20
InventoryTurns
Operating Margin
Inditex Retail Apparel
IDEXF
0.13, 3.02
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Retail Apparel
0.10, 4.61
Inditex
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

20. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2011
2012
2013 2014
2015
2016
2017
2018
2019
3.0
3.5
4.0
4.5
5.0
5.5
0.08 0.10 0.12 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 0.32 0.34 0.36
InventoryTurns
Operating Margin
Intel Semiconductor
INTC
0.29, 4.18
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Semiconductor
0.14, 3.62
Intel
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

21. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2.0
2.5
3.0
3.5
0.19 0.21 0.23 0.25 0.27 0.29
InventoryTurns
Operating Margin
Johnson & Johnson Pharmaceuticals
JNJ
0.36, 2.97
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Pharmaceuticals
0.21, 2.32
J&J
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

22. 2010
2011
2015
2016
2017
2018
2019
2010
2019
3.0
4.0
5.0
6.0
0.16 0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 0.30
InventoryTurns
Operating Margin
CocaCola Beverages
KO
0.24, 5.38
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Beverages
0.18, 3.78
Coca-Cola
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

23. 2010
2011
2012
2013
2014
20152017
2018
2019
2010
2019
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
-0.01 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10
InventoryTurns
Operating Margin
Lenovo B2B Technology
LNGVF
0.2, 15.38
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
B2B
Technology
0.08, 8.64
Lenovo
Operating Margin vs. Inventory Turns (2010 –2019)
Best Scenario

24. 2010
2011
2012 20132014
2015
2016
2017 2018
2019
2010
20122013
2014
2017
2018 2019
0.5
1.5
2.5
3.5
4.5
0.17 0.18 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 0.30 0.31 0.32
InventoryTurns
Operating Margin
Diageo Beverages
DEO
0.28, 1.04
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Beverages
0.18, 3.78
Diageo
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

25. 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2012
2013
2014
2015
2016
2017
2018
2019
2.0
2.5
3.0
3.5
0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20
InventoryTurns
Operating Margin
L'Oreal Personal Products
LRLCY
0.17, 2.93
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Personal
Products
0.11, 2.83
L’Oreal
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario

26. Kimberly Clark
Operating Margin vs. Inventory Turns (2010 – 2019)
Best Scenario
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2010
2011
2013
2015
2016
2017
2018
2019
3.0
4.0
5.0
6.0
7.0
8.0
0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19
InventoryTurns
Operating Margin
Kimberly-Clark Household - Non-Durable
KMB
0.14, 6.40
◆Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2010-2019 from YCharts
Household
Non-Durable
0.16, 4.75

27. Looking More Closely at the Gartner Top 25: Intersection of Inventory
Turns and Operating Margin
27
Supply Chain Insights LLC. Copyright © 2020
Performance Against Peer GroupUnder
Under
Over
Over
Improvement

28. Overlap Between the Two Methodologies
28
Supply Chain Insights LLC. Copyright © 2020
Performance Against Peer GroupUnder
Under
Over
Over
Improvement

29. Supply Chain Insights LLC Copyright © 2020
01 There is no perfect method for determining
supply chain excellence.
02
Business leaders’ perceptions of corporate
performance are not in alignment with
actual results.
03 Only 4% of companies outperform their
peer groups. Sector analysis matters.
Insights
29

30. Supply Chain Insights LLC. Copyright © 2020
Founded in February 2012 by Lora Cecere, Supply Chain
Insights LLC is in its eighth year of operation. The
Company's mission is to deliver independent, actionable,
and objective advice for supply chain leaders. Our goal is to
help leaders understand supply chain trends, evolving
technologies, and which metrics matter.
30

31. 31
2 years Partner at Altimeter
Group (leader in open
research)
8 years Gartner and AMR
Research
8 years Experience in
Marketing and Selling
Supply Chain Software at
Descartes Systems Group
and Manugistics (now
JDA/Blue Yonder)
Supply Chain Insights LLC Copyright © 2020
Who Is Lora?
Founder of Supply Chain
Insights
“LinkedIn Influencer”, Guest
blogger for Forbes, Author:
Bricks Matter (2012), Supply
Chain Metrics That Matter
(2014), and Shaman’s
Journal (2014-19)
15 Years Leading Teams in
Manufacturing and
Distribution for Clorox,
Kraft/General Foods,
Nestle/Dreyers Grand Ice
Cream and Procter &
Gamble.

32. Thank You…
Supply Chain Insights LLC Copyright © 2020
LORA CECERE, FOUNDER | lora.cecere@supplychaininsights.com