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Benchmarking Your Performance Assess, Diagnose, Correct

Benchmarking Your Performance Assess, Diagnose, Correct. Trevor Miles director, industry & application marketing. Agenda. Benchmarks What should they measure? Why are they important? So what? Cash-to-cash Free Kinaxis Benchmarking Service Q&A. Benchmarks – What Should They Measure?.

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Benchmarking Your Performance Assess, Diagnose, Correct

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  1. Benchmarking Your PerformanceAssess, Diagnose, Correct Trevor Miles director, industry & application marketing

  2. Agenda • Benchmarks • What should they measure? • Why are they important? • So what? • Cash-to-cash • Free Kinaxis Benchmarking Service • Q&A

  3. Benchmarks – What Should They Measure? What it tells you Demand Forecast Accuracy Predictable returns to shareholders Strategic Benefit Perfect Order SCM Cost Assess Cash to Cash Working Capital Cash efficiency Accounts Payable Accounts Receivable Inventory Diagnose Raw Material Inventory Direct Material Costs Supplier Quality Supplier On Time Purchasing Costs Stability of processes driving value Operational Execution Production Schedule Variable Order Cycle Time Perfect Order Detail Cost Detail Plant Utilization WIP & FG Inventory Correct The AMR Research Supply Chain Top 25 Lessons from Leaders - Kevin O’Marah , GVP, Supply Chain Research, 7/26/2010

  4. Benchmarks – What Should They Measure? What it tells you New Product Forecast Accuracy Predictable returns to shareholders Strategic Benefit Innovation Benefits Innovation Investments Assess Time to Value Working Capital Cash efficiency Time to Market Time to Break Even Diagnose Design and Launch % Customer Needs Met Planned vs. Actual Design Budget / Sched. Product Pipeline Manage Part and Process Reuse First Pass Yield Stability of processes driving value Operational Execution Post Launch Planned vs. Actual Manufacturing Cycle Time Cost Detail New Product Detail First Year Field Returns Engineering Changes Correct The AMR Research Supply Chain Top 25 Lessons from Leaders - Kevin O’Marah , GVP, Supply Chain Research, 7/26/2010

  5. Benchmarks – Balance is the Key

  6. Benchmarks – Why Are They Important? • Attempt to combine opinion with rational measures • Still very asset-focused, industry bias • Little focus on working capital • Though both inventory and ROA have WC influence • Even revenue growth not immune to industry effects • “All models are wrong. Some are useful.” – GEP Box

  7. Some Consistency, Lots of Fluidity

  8. So What? – Performance Since June 2, 2010 AMR 1-10 AMR 15-25

  9. So What? – Performance Over Last 3 Years AMR 1-10 AMR 15-25

  10. Cash-to-Cash Cash-to-Cash: Speed of money flow through the supply chain • Cash-to-Cash = • Days of sales outstanding • How much your customers owe you • + Days of inventory on-hand • How much money is tied up in inventory • - Days of payables outstanding • How much you owe your suppliers

  11. Cash-to-Cash Balance is Important Inventory liability risk Added inventory costs Customer service risk Added borrowing costs Forcing cost onto suppliers Absorbing too much cost

  12. Consistent Performance = Competitive Advantage

  13. Free Kinaxis Benchmarking Service Better Worse

  14. Free Kinaxis Benchmarking Service • Access via http://community.kinaxis.com

  15. Free Kinaxis Benchmarking Service

  16. Free Kinaxis Benchmarking Service

  17. Thank You!

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