1. Supply Chains to Admire 2016 Webinar July 20, 2016

2. Supply Chain Insights LLC Copyright © 2016, p. 2 Your Speaker Today Lora Cecere, Founder and CEO, Supply Chain Insights

3. Supply Chain Insights LLC Copyright © 2016, p. 3 We wanted to have an objective measurement of supply chain excellence for our research. Why Do We Do This?

4. Supply Chain Insights LLC Copyright © 2016, p. 4 The methodology is in its third year. Constantly learning and refining the methodology based on feedback from supply chain leaders. Data sourced from YCharts. Based on financial ratios. History?

5. Supply Chain Insights LLC Copyright © 2016, p. 5 Comparison Gartner Top 25Supply Chains to Admire Focus Fortune Global 500 and Forbes Global 2000 lists $12B minimum revenue Companies by industry, regardless of size Calculation 50% quantitative measures: ROA (3 year weighted average) Inventory Turns (1 year quarterly average) Revenue Growth (3 year weighted average) Corporate Social Responsibility 3 rd party index 50% peer and Gartner analyst opinions Improvement greater than peer group average based on the Supply Chain Index rank: Strength, Balance, and Resiliency Value relative to peer group average Price to Tangible Book Value Performance better than peer group average on the Supply Chain Metrics That Matter: Revenue Growth, Operating Margin, Inventory Turns, Return on Invested Capital Experience 13 th year3 rd year

6. Supply Chain Insights LLC Copyright © 2016, p. 6 What We Expected

7. Supply Chain Insights LLC Copyright © 2016, p. 7 Procter & Gamble (2006-2015)

8. Supply Chain Insights LLC Copyright © 2016, p. 8 Colgate-Palmolive (2006-2015)

9. Supply Chain Insights LLC Copyright © 2016, p. 9 Kellogg (2006-2015)

10. Supply Chain Insights LLC Copyright © 2016, p. 10 Dow Chemical Company and DuPont (2006-2015)

11. Supply Chain Insights LLC Copyright © 2016, p. 11 Honda and Toyota (2006-2014)

12. Supply Chain Insights LLC Copyright © 2016, p. 12 Bristol-Myers Squibb and Merck (2006-2015)

13. Supply Chain Insights LLC Copyright © 2016, p. 13 LaggardsLeaders Focus on Functional MetricsFocus on Horizontal Processes Driving Singular Metric StrategiesBuilding of Balanced Scorecards Changing LeadershipConsistency of Leadership and Culture Focus Solely on Transactional Processes Strong Planning and Network Design Changing Focus. Adoption of Fads.Clarity of Supply Chain Excellence. Why?

14. Supply Chain Insights LLC Copyright © 2016, p. 14 Process Evaluate Supply Chain Improvement Using the Supply Chain Index Determine Relative Position Against Peers for Price to Tangible Book Select Higher Performing Companies Against Performance Factors

15. Supply Chain Insights LLC Copyright © 2016, p. 15 Measuring Supply Chain Improvement Overall Ranking per Company Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%) Strength: Inventory Turns & Operating Margin Vector Trajectory (30%) Resiliency: Inventory Turns & Operating Margin Mean Distance (30%)

16. Supply Chain Insights LLC Copyright © 2016, p. 16 Process Evaluate Supply Chain Improvement Using the Supply Chain Index Determine Relative Position Against Peers for Price to Tangible Book Select Higher Performing Companies Against Performance Factors

17. Supply Chain Insights LLC Copyright © 2016, p. 17 Value Price to Tangible Book = Market Price/Tangible Book Value

18. Supply Chain Insights LLC Copyright © 2016, p. 18 Process Evaluate Supply Chain Improvement Using the Supply Chain Index Determine Relative Position Against Peers for Price to Tangible Book Select Higher Performing Companies Against Performance Factors

19. Supply Chain Insights LLC Copyright © 2016, p. 19 Performance Factors: A Balanced Portfolio Drives the Highest Level of Value: The Supply Chain Effective Frontier Year-over- Year Growth Operating Margin Inventory Turns Return on Invested Capital

20. Supply Chain Insights LLC Copyright © 2016, p. 20 Inventory Turns = Cost of Goods Sold/Inventory Cycle Measurement

21. Supply Chain Insights LLC Copyright © 2016, p. 21 Asset Utilization/Complexity

22. Supply Chain Insights LLC Copyright © 2016, p. 22 Determining Winners PTBV IMPROVEMENTVALUEPERFORMANCE

23. Supply Chain Insights LLC Copyright © 2016, p. 23 Divided 293 public companies into 26 industry peer groups based on NAICS codes. Evaluated the companies within industry peer groups for improvement, value, and performance across two periods: 2006- 2015 and 2009-2015. Methodology Supply Chains to Admire 2016: Winners and Finalists 2006-20152009-2015 WinnersFinalistsWinnersFinalists 17 1621

24. 2009-2015

26. Supply Chain Insights LLC Copyright © 2016, p. 26 Cummins Engine (2006-2015)

27. Supply Chain Insights LLC Copyright © 2016, p. 27 Cisco Systems (2006-2015)

28. Supply Chain Insights LLC Copyright © 2016, p. 28 Whole Foods (2006-2015)

29. Supply Chain Insights LLC Copyright © 2016, p. 29 Apple (2006-2015)

30. Supply Chain Insights LLC Copyright © 2016, p. 30 Conclusion A focus on balanced metrics Strong culture/leadership. Avoidance of fads Strong horizontal processes and focus on supply chain talent.

31. Visit Us Online www.supplychaininsights.com www.supplychainshaman.com www.beetfusion.com www.linkedin.com/company/supply-chain-insights www.slideshare.com/loracecere Follow Us on Twitter @scinsightsllc @lcecere Attend a Live Event www.supplychaininsightsglobalsummit.com www.supplychaininsights.com/the-shamans-circle

34. Supply Chain Insights LLC Copyright © 2016, p. 34 About Lora Cecere Founder of Supply Chain Insights “LinkedIn Influencer” Guest blog for Forbes Author of 5 books: Bricks Matter (2012), Shaman’s Journal (2014), Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015), Shaman’s Journal (2016) Partner at Altimeter Group (leader in open research) 7 years of Management Experience leading Analyst Teams at Gartner and AMR Research 8 years Experience in Marketing and Selling Supply Chain Software at Descartes Systems Group and Manugistics (now JDA) 15 Years Leading teams in Manufacturing and Distribution operations for Clorox, Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter & Gamble. Contact Information: Email: lora.cecere@supplychaininsights.com Blog: www.supplychainshaman.com (15,000 pageviews/month) Forbes: www.forbes.com/sites/loracecere Twitter: twitter.com/lcecere (7,700 followers) LinkedIn: www.linkedin.com/in/loracecere (110,000 followers) LinkedIn Influencer: www.linkedin.com/today/author/446631 Contact Information: Email: lora.cecere@supplychaininsights.com Blog: www.supplychainshaman.com (15,000 pageviews/month) Forbes: www.forbes.com/sites/loracecere Twitter: twitter.com/lcecere (7,700 followers) LinkedIn: www.linkedin.com/in/loracecere (110,000 followers) LinkedIn Influencer: www.linkedin.com/today/author/446631