Supply Chain Index: Evaluating the Consumer Value Network

Supply chain management is a balancing act.

It requires alignment.

This is easier said than done.

The terms lack definition. What is balance? How can companies judge alignment? What defines improvement? In this series of reports, we want to help.

Day by day leaders are forced to make decisions on priorities and trade-offs like growth, profitability, cycle, and complexity. The supply chain leader is charged with improving the potential of an organization at the intersection of operating margins, inventory turns and case-fill rate1.

But are the choices that are made conscious or unconscious? This is a strong factor in determining supply chain excellence. It is our hope that through this series of reports the choices can be made consciously, based on an improved knowledge of what is possible.

In our research, we find that laggards are held hostage and struggle to balance disparate demands with the threat of throwing the supply chain out of alignment. Success requires a nuanced approach using a portfolio of carefully selected metrics to ensure success.

While supply chain excellence does not make a company, it is hard for a company to succeed without it. While the discrete industries are more focused on cycles, the consumer value network is more focused on the optimization of flows.

Research Overview:

• Report Details: This report is based on analysis of financial balance sheet and income statement data for the period of   2006-212 and cooperative research conducted with Arizona State University.
• Objective: To apply the Supply Chain Index methodology to 6 industries comprising the consumer value network.
• Hypothesis: The Supply Chain Index measures   improvement over a set time period presenting different results depending upon the years considered. Overall, progress on supply chain performance has occurred at different rates across the consumer value network. Downstream industries and companies have struggled to a greater degree with cost pushed back in the value chain.