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2022 // SUPPLY CHAINS TO ADMIRE
The presence of the new executive team with deep experience in 2013 led the rise in capabilities. Was Alex’s departure the reason for the fall? Probably not the sole factor. Supply Chain Excellence is a combination of factors, but performance is hard to sustain through management changes.
Companies following traditional supply chain practices focused on transactional efficiency do not make the cut to place in the Winner’s Circle. The use of functional metrics and close coupling of the supply chain to the budget is a barrier to improving balance sheet improvement. (In contrast, the budget is input but not a constraint for winners.) A worst-case scenario is defining the supply chain as another function within a rigid set of silos. The supply chain function is a more significant issue in Europe than in the Americas.
There are many barriers to beating the peer group in the areas of improvement, performance, and value.
Smaller innovative and newer companies focusing on customer value tend to win the Supply Chains to Admire award. Examples of smaller innovative companies winning the award include AbbVie, Intuitive Surgical, and Sleep Number. The retail winners drove excellence through constant change and business model innovation.
Annual Growth vs. Inventory Turns (2012 - 2021) Figure 2. Orbit Chart: Ecolab Progress Against Peer Group
Best Scenario
7.0
2019
6.5
Ecolab 0.14, 5.44
6.0
2012
2016
2013 2014
2017
2012
2020
5.5
2013
2015
Chemical Industry 0.11 4.95
2021
2014
2015
5.0
2016
2017
2018
4.5
2019
2020
2021
2018
4.0
0.06
0.07
0.08
0.09
0.10
0.11
0.12
0.13
0.14
0.15
0.16
Annual Growth
Chemical Industry
Ecolab
Average (Annual Growth, Inventory Turns) Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2021 from YCharts
Supply Chain Insights LLC Copyright © 2022, p. 1 Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2021 from YCharts
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