Lora Cecere needs no introduction in the supply chain world. That’s especially true when she has 320,000 followers on LinkedIn, and that list continues to grow. Lora is the founder of the research and analysis firm, Supply Chain Insights which publishes the annual Supply Chains to Admire annual report. We talk about Lora’s supply chain insights, and her book, Supply Chain Metrics That Matter.
Who Is Lora Cecere?
I don’t know anyone who isn’t fascinated with a person’s origin story of those we greatly admire.
For instance, did you know that one of Lora’s first jobs was reducing the standard deviation of Pringles chips going through a production line at P&G to eliminate breaking in the can?
Lora has worked in supply chain since the 1970s before supply chain got its name in 1982. Some of her early career projects have included:
- product launches at General Foods
- vendor managed inventory implementation between Clorox and Walmart
- running and building distribution centers
- worked on many tech-driven forecasting and supply chain projects while the software was still in its infancy stages
- later went to work at Gartner and AMR Research
- after Gartner acquired AMR, Lora started her own firm
A Supply Chain Definition
The supply chain is the process from the customer’s customers to the supplier’s supplier. And one of the things that I find very sad is that sometimes people try to make supply chain as a function within a functional silo of logistics or delivery, but I think about supply chain holistically.Lora Cecere
Are Supply Chain Advancements and Improvements Happening?
Lora and her firm, Supply Chain Insights, publish Supply Chains to Admire annually. The analysis reveals the intersection of operating margin and inventory turns as well as the intersection of growth and return on invested capital. According to Lora, ” … the research shows 94% of the public companies are not making improvement.”
And one of the issues is people don’t tend to look at the intersection of the metrics because supply chains are complex, nonlinear systems. And if you look at the metrics in an Excel spreadsheet, you don’t see the connection and the patterns.Lora Cecere
The Big 5 Supply Chain Metrics
- Year-over-year growth
- Operating margin
- Inventory turns
- Return on invested capital
Source: Supply Chain Metrics That Matter (2015)
One of the big issues that supply chain talent has is the friction between finance and supply chain, and the role of the budget and the fact that many financial leaders are guiding IT strategies without a really good understanding of supply chain.Lora Cecere
Is There Too Much Focus on Cost?
- value isn’t driven by just focusing on cost
- functional metrics are not the solution to adding value
- value is also decreased with an over-emphasis on cash-to-cash (cash conversion cycle) metrics which can throw the supply chain out of balance and reducing value for shareholders
Do Some Organizations Have Too Many Measuresments?
- An example from Honeywell
- Good functional metrics but no alignment with The Balanced Scorecard
- the functional metrics should be about reliability, forecasted value, and on-time orders, schedule adherence, first-pass yield and manufacturing
- metrics aligned with a Balanced Scorecard are hard because most people are enamored with functional metrics
What is the 10-30-60 Rule?
S&OP expert Bob Stahl credits Lora Cecere with the 10-30-60 rule regarding behavioral change in the organization:
10 – software only has a 10% impact on any change initiative
30 – new systems and processes account for 30% of the impact
60 – the biggest impact on change results from changed behaviors
Most people did not have a clear definition of success. And most people did not rate themselves very highly. But they had very clear process definitions. And they were on a fixed path to implement technology. So I built this model around change management that references the Kotter [8-Step Change] Model.Lora Cecere
Where to Find Lora Cecere
Other Books by Lora Cecere
Consider following Lora on her Amazon author page so that you can be notified of her next book that she is writing. Her new book will be a sequel and based on leadership matters. Like her last book, it will be in the form of a novel based around the character Joe who is promoted and has to figure out how to help his organization move toward a digital transformation.