Supply Chains to Admire 2022 - Report v4.0-web

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2022 // SUPPLY CHAINS TO ADMIRE

A Closer Look at Supply Chains to Admire Results by Industry At the start of this analysis, we start by mapping industry trends. Supply chain practices grew in importance as the margins of 85% of the industry sectors regressed over the last decade. Without the supply chain's redesign, companies cannot drive progress based on traditional process paradigms. Inventory is a sticky wicket—a political hot potato—in many organizations. Inventory levels at the end of 2021 were significantly higher across industries than pre-recession levels in 2007. Today, many companies have burgeoning inventories; but lack the right product to ship orders reliably. They are drowning in inventory, decreasing cash-to-cash performance, but have the wrong products to ship orders. This is due to the lack of evolution of processes to manage inventory holistically. Winners focus on the design of inventory strategies while most companies, often laggards, only focus on safety stock levels. The lack of performance in inventory optimization is a significant factor in determining the winners in the Supply Chains to Admire Award process. While over 82% of manufacturers greater than 5B$ in annual revenue own an advanced planning solution, a spreadsheet is the most often used technology. There is a significant gap in inventory performance between companies that use advanced optimization versus those dependent on spreadsheets. When we started this analysis, we believed the analysis would favor the iconic brands of Procter & Gamble, Unilever, or Walmart. While each company contributed significantly to supply chain process improvement, in this study, each struggled to outperform its peer group on the balanced scorecard selected for this analysis.

Table 6. Inventory Levels by Industry Sector Across Time Periods

Days of Inventory by Industry: Comparison across Years

Years

Diffeence (2020 - 2021 vs 2004 - 2006)

Industries

2004 - 2006

2007 - 2008

2009 - 2013

2014 - 2019

2020 - 2021

Beverage

95

98

114

160

153

57

Pharmaceuticals

146

135

158

184

182

36

Medical Device

100

107

120

129

145

44

Beauty

105

127

132

142

147

42

Automotive Parts

47

52

61

66

76

29

Household Products

50

51

57

74

78

29

Aerospace & Defense

94

89

97

103

122

28

Apparel Retail

62

65

66

69

83

21

Chemical

58

54

59

73

77

19

Semiconductor

61

69

80

92

76

15

Automotive

37

41

43

48

51

14

Food

50

51

57

59

61

11

Broadline Retail

65

62

63

66

59

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