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Copyright © 2010 Kinaxis Inc. All Rights Reserved. 1
Copyright © 2010 Kinaxis Inc. All Rights Reserved. 1
Copyright © 2010 Kinaxis Inc. All Rights Reserved.
Trevor Milesdirector, industry & application marketing
Benchmarking Your PerformanceAssess, Diagnose, Correct
Copyright © 2010 Kinaxis Inc. All Rights Reserved. 3
Agenda
• Benchmarks– What should they measure?– Why are they important?– So what?– Cash-to-cash
• Free Kinaxis Benchmarking Service• Q&A
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Benchmarks – What Should They Measure?
DemandForecast Accuracy
PerfectOrder
SCMCost
AccountsPayable Inventory Accounts
Receivable
SupplierQuality
SupplierOn Time
RawMaterial
InventoryPurchasing
CostsDirect
MaterialCosts
CostDetail
ProductionScheduleVariable
PlantUtilization
WIP & FGInventory
OrderCycleTime
PerfectOrder Detail
Strategic Benefit
Working Capital
OperationalExecution
Predictable returns to shareholders
Cash efficiency
Stability of processes driving value
Cash to Cash
What it tells you
Diagnose
Correct
Assess
The AMR Research Supply Chain Top 25 Lessons from Leaders - Kevin O’Marah , GVP, Supply Chain Research, 7/26/2010
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Benchmarks – What Should They Measure?
NewProduct
Forecast Accuracy
InnovationBenefits
InnovationInvestments
Time toMarket
Time toBreak Even
% CustomerNeeds Met
Planned vs. Actual Design
Budget / Sched.
Product
PipelineManag
e
Part andProcessReuse
FirstPassYield
New ProductDetail
Planned vs. Actual
Manufacturing Cycle Time
EngineeringChanges
First YearField
Returns
CostDetail
Strategic Benefit
Working Capital
OperationalExecution
Predictable returns to shareholders
Cash efficiency
Stability of processes driving value
Time to Value
What it tells you
Design and Launch
Post Launch
Diagnose
Correct
Assess
The AMR Research Supply Chain Top 25 Lessons from Leaders - Kevin O’Marah , GVP, Supply Chain Research, 7/26/2010
Copyright © 2010 Kinaxis Inc. All Rights Reserved. 6
Benchmarks – Balance is the Key
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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
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Some Consistency, Lots of Fluidity
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So What? – Performance Since June 2, 2010
AMR 1-10
AMR 15-25
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So What? – Performance Over Last 3 Years
AMR 1-10
AMR 15-25
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• 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
Cash-to-Cash
Cash-to-Cash: Speed of money flow through the supply chain
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Cash-to-Cash Balance is Important
Forcing cost onto suppliers
Absorbing too much cost
Inventory liability risk
Customer service risk
Added inventory costs
Added borrowing costs
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Consistent Performance = Competitive Advantage
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Free Kinaxis Benchmarking Service
Better
Worse
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Free Kinaxis Benchmarking Service
• Access via http://community.kinaxis.com
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Free Kinaxis Benchmarking Service
Copyright © 2010 Kinaxis Inc. All Rights Reserved. 17
Free Kinaxis Benchmarking Service
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Thank You!
