Supply Chain Metrics that Matter

FORGET EFFICIENCY FOR ITS OWN SAKE AND FOCUS ON WHAT WORKS

"Digital business and the collaborative economy are changing what is possible. When I need supply chain advice, I turn to Lora. I value her insights."
Jeremiah Owyang, Founder and CEO of Crowd Companies

"This is game changing work and will redefine how we view business supply chain effectiveness. We have now graduated from popularity comparisons to performance data methodology."
Joe Krkoska, Director, Global Supply Chain, Dow

"The translation of supply chain excellence is tough for the financial analysts to track. This book makes it much more transparent."
Alexia Howard, Senior Research Analyst – US Foods, Sanford C. Bernstein & Co., LLC

"For clients and enterprises, there is no substitute for a data–driven approach to defining supply chain excellence. In this book, Lora skillfully translates the issues of and opportunities for managing the supply chain into a language that the entire organization can understand, which is important because supply chains matter more than ever."
Fran O′Sullivan, GM, Integrated Supply Chain, IBM

Foreword xi

Preface xv

Acknowledgments xvii

Chapter 1: Starting the Journey 1

Meet Joe 4

Setting Metrics Targets 5

The Journey 6

Agility 37

Evolution 40

Conclusion 42

Notes 43

Chapter 2: Managing Metrics on the Effective Frontier 45

The Connection of Metrics to the Business Strategy 46

Managing Metrics as a Complex System 49

Using the Metrics Maturity Model to Drive Change 52

Aligning on Asset Strategies 81

Managing Change 85

Conclusion 87

Notes 88

Chapter 3: Using Value Network Strategies to Move to the Next Level on the Frontier 89

Managing What You Can t Control 90

Building the Guiding Coalition 132

Educating the Organization to Take the First Step 133

Conclusion 139

Notes 139

Chapter 4: A Strategy Session on Managing Value Networks 141

Addressing Organizational Tensions 142

The Strategy Day 154

The Journey: Becoming Market–Driven 169

Risk Management: A Catalyst for Driving Balance and Resiliency? 171

Can Corporate Social Responsibility Be an Impetus to Drive

Alignment and Build Market–Driven Value Networks? 176

Sales and Operations Planning to Drive Balance and Resiliency 180

Moving to the Next Level of the Effective Frontier 186

Conclusion 188

Notes 188

Chapter 5: What Drives Value in the Value Network?: Industry Progress in Consumer Value Chains 189

The Questions 190

Leveling the Playing Field 193

The Supply Chain Index 195

The Consumer Value Chain Journey 196

Wrapping Up the Strategy Workshop 235

Conclusion 237

Notes 237

Chapter 6: What Drives Value in the Value Network?: Industry Progress in the Health–Care Value
Chain 239

What Is Value? 242

Who Is the Customer? 248

Where Are We Headed? 250

The Health–Care Value Chain 253

Hospitals 259

Pharmaceutical Industry 267

Medical Device Manufacturers 278

Conclusion 283

Notes 284

Chapter 7: What Drives Value in the Value Network?: Industry Progress in the Industrial Value Chain 285

Understanding the Industrial Value Network 296

High–Tech and Electronics 300

Semiconductor Industry 310

Conclusion 320

Notes 321

Chapter 8: What Drives Value in the Value Network?: Industry Progress in the Automotive Value
Chain 323

Automotive Progress on the Index 325

Review of the Automotive Industry 329

Moving Forward with Project Orbit 346

Notes 350

Chapter 9: The Smoke Clears 351

Reflections 353

Joe s Story 354

Reflections 363

Appendix: The Methodology 365

About the Author 371

Index 373

LORA M. CECERE is the founder of the research firm Supply Chain Insights. She is the author of the enterprise software blog Supply Chain Shaman, which attracts 5,000 readers weekly. She also writes a blog for Forbes and is a LinkedIn Influencer. Currently, Lora′s research focuses on supply chain sensing and revenue management. Her supply chain experience includes specialist roles at AMR Research, Clorox, Gartner Group, Kraft, and Procter & Gamble.