Supply chain performance → shareholder value

Customer and Supplier Economic Value Added

Click any supplier metric or performance driver to trace its path to EVA. Hover any box for a definition.

Supplier performance levers
ILLUSTRATIVE MODEL · $ MILLIONS
On time & in full96.0%
DELIVERY RELIABILITY
Order cycle time6 days
RESPONSIVENESS
Inventory days of supply45 days
ASSET MANAGEMENT
Cost of capital9%
CAPITAL CHARGE
Baseline: 96% on time, 6-day cycle, 45 inventory days, 9% capital charge.
CUSTOMER EVA
$44.2M
At baseline supply chain performance
Supplier
Customer
Supply chain
metrics
Supply chain
performance
Customer's cost of doing business
Upside SC flexibility
Upside SC adaptability
Downside SC adaptability
Supply chain mgmt. cost
COGS
Multiple shipments/order
Wrong product shipped
Wrong quantity shipped
% on time & in full
Product DPPM
Order cycle time
Order cycle variability
Cash-to-cash cycle time
Inventory days of supply
Return on supply chain fixed assets
Flexibility
Cost
Delivery
reliability
Responsive-
ness
Asset
management
Volume
Price
Mix
Lost sales
Lost customer
Lost opportunity sales
Product cost
Shpg handling labor
Recvg handling labor
Qual. rtns handling
Expedite cost
Del'y error handling
Customer svs cost
Inventory carrying cost
Receivables carrying cost
Space
Warehouse equipment & racks
Sales
$496.0M
Gross margin
$157.5M
Cost of goods sold
$338.5M
Total expenses
$69.8M
Operational profit
$87.7M
Taxes
$21.0M
Net profit
$66.6M
Inventory
$47.3M
Accounts receivable
$61.2M
Fixed assets
$121.2M
Current assets
$128.4M
Total assets
$249.6M
Capital charge
9%
EVA
$44.2M
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CLICK A SUPPLIER METRIC OR PERFORMANCE DRIVER TO TRACE ITS PATH
FIGURES ARE ILLUSTRATIVE, FOR TEACHING THE LINKAGE ONLY