sc digest
September 14, 2017 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Inventory Performance 2017 Part 2 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Extended One Week bullet Trivia      bullet Feedback
bullet New Expert Column and Supply Chain by Design bullet On Demand Videocasts

The State of Retail and Vendor 
Supply Chain Relations 2017

SCDigest Launches Second Biannual Benchmark Study


Example Chart from 2015 Report




Are We Getting More Integrated and Collaborative - 
Or Heading in the Other Direction? Help Needed from 
Retailers and Vendors/Brand Companies.


first thought


Supply Chain Graphic of the Week
In Honor of National Truck Driver Appreciation Week


Private Labels at Costs, Others, on the March

China Ready to Mandate Only Electric Cars
Very Different New Store Concept for Nordstrom
Blockchain Set to Disrupt Maritime Insurance Sector
The State of Retail and Vendor Supply Chain Relations 2017

Example Chart from 2015 Report


Are We Getting More Integrated and Collaborative - 
Or Heading in the Other Direction? Help Needed from 
Retailers and Vendors/Brand Companies.


August 9, 2017 Contest

See The Full-Sized Cartoon and Send in Your Entry Today!

Holste's Blog: The Typical Distribution Center Business Model Is Rapidly Changing

Weekly On-Target Newsletter:
September 12, 2017 Edition

RFID Cartoon, CO2 Filter? MIT RFID Drone Update, New Blockchain and more

Fragmented Planning Horizons: How They Undermine Consumer Goods Supply Chains
by Henry Canitz
Product Marketing & Business Development Director

Three Things That Supply Chain Managers Should Know about Artificial Intelligence

by Dr. Michael Watson

Great Expectations: Supply Chain Control

by Jim Preuninger
Chief Executive Officer
Global Product Marketing
Amber Road


What was the US trade deficit in goods with China in 2016, in $billions?

Answer Found at the
Bottom of the Page

Inventory Performance 2017 Part 2

I am going to let one big graphic do most of the talking this week.

Relative to inventory management that is. I am back again this week with more analysis of inventory performance , after last week's first introductory column (see Inventory Performance 2017).


Inventory turns are in general flat if not down somewhat in recent years, despite lots of attention and much technology thrown at the problem.


Send us your
Feedback here

In that column, I noted that overall inventory performance is gauged by two main measures: Days Inventory Outstanding (DIO) and in logistics circles the more common inventory "turns."

 Reviewing  briefly:


DIO = End of Year Inventory Level/[Total Cost of Goods Sold/365]

So, you calculate the average cost of goods sold for one day, and then see how many of those COGS days you keep in inventory (based on year-end balance sheet numbers).

As such, DIO is sort of the reverse of inventory turns, in that a higher DIO, all things being equal, means poorer inventory management performance, while a lower number signals improvement. You are being more efficient with inventory versus a given level of COGS.

Inventory turns is measured as follows:


Cost of Goods Solid/End of Year Inventory


SCDigest went through the rather tedious effort - even with some tools we built to help us - of gathering turns information for 554 companies, and then grouping those companies into more than 60 sectors. As I explain each year, there are some sectors where this is easy (e.g., department stores) and others where it is more difficult (e.g., machinery).


Nevertheless, below is a chart with data on almost 70 sectors, listed in order of their inventory turns in 2016. Also shown is the sector turns in 2013, from which we calculate the change (positive percentages being a good thing) over that period.


In the last column, we also provide the resulting DIO, which is calculated by dividing 365 by inventory turns. We also indicate how many companies were included in each sector and example companies:

A couple of notes. You will find a few "special cases," where for example we didn't include Apple with "computer hardware and peripherals" because Apple's turns, for reasons that aren't immediately clear, were so dramatically higher than everyone else it would have greatly distorted the average. Ditto with restaurant chain Cracker Barrel, which had turns far lower than the industry average, I assume due to all that merchandise it carries beyond food.

I will also note we are dependent on the financial data supplied by sources such as Yahoo or Google finance, and sometimes there are some anomalies. In some cases, data is missing. And we found Yahoo and Google have somewhat different numbers for cost of goods sold for Procter & Gamble's most recent fiscal year, as an example. Who knows.

But I hope with all that that you find this data interesting. The bottom line, as we reported last week, is that inventory turns are in general flat if not down somewhat in recent years, despite lots of attention and much technology thrown at the problem.


Why is that? I would be interested in your observations.

Anyway, take a look. We will do still more analysis of this data in OnTarget next week.

Any reaction to this inventory data? Why have inventories been creeping up on the past 5 years?  What explains differences in turns between similar companies in a sector? Let us know your thoughts at the Feedback button below.


On Demand Videocast:

How DOM and WMS Work Together to Power Omnichannel Supply Chains

Experts from Tompkins International and Softeon Set the Record Straight in Fast Paced, Q&A Format

This discussion will be based on an outstanding new "Executive Brief" on this same topic, developed jointly by Kevin Hume of Tompkins International and Satish Kumar, a vice president at Softeon.

Featuring SCDigest editor Dan Gilmore, Kevin Hume of well-known consulting firm Tompkins International and Satish Kumar, a vice president at Softeon.

Available On Demand

On Demand Videocast:

New Cloud WMS Solution is Game Changer for Warehouse Management Deployment and Flexibility

New Technology and Deployment Approach Offer a Simply Better Way to WMS Implementations - Learn How

In this outstanding Videocast, we will cover the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids.

Featuring  Dan Gilmore, Editor, along with Mark Hawksley and Bruno Dubreuil of TECSYS, a leading provider of WMS solutions.

Available On Demand

On Demand Videocast:

Innovation in Shipper-3PL Relationships Benchmark Study Results

New Research will be Unveiled from SCDigest and JDA On This Increasingly Important Topic

In this outstanding broadcast, SCDigest and JDA recently completed new research study on innovation in shipper-3PL relationships, with the goal of obtaining the perspectives of both shippers and service providers on this increasingly important topic. All registrants will be sent a copy of the report will all the data shortly after the Videocast.

Featuring SCDigest editor Dan Gilmore and Danny Halim and Lori Harner of JDA.


Available On Demand


We publish here some of the several emails we received from Dan Gilmore's column last week on The Greatest Time to be a Supply Chain Pro Ever?

More soon.

Feedback on The Greatest Time to be a Supply Chain Pro Ever?


My own career choice going back to 1968 continues to be vindicated.

Based on my undergraduate studies I saw that if you were involved in making "stuff" in just one sector you stood a good chance of having your employment disrupted. However if you were involved in moving "stuff" it didn’t really matter what you moved you still had a job.

49 years later and it is just as true; so as you say "keep it moving!"

David MacLeod
Learn Logistics Limited


You wrote: "It is not good to have some supply chain managers focused on all this innovation and cool stuff while others are stuck with grinding out the execution every day."

I wouldn't classify this situation as good or bad. It really depends on what each supply chain person likes to do and is good at doing. Just like some people are better at managers versus leaders and vice a versa.

Some supply chain people are better at doing versus innovation and some are better at innovation versus doing. For me personally I have more interest in and abilities at being an innovator.

The trick is to find that right mix of people skills, deploy them correctly, and give them the right tools to be successful. If you do that, you can support Bi-Modal Operations driving both efficient on-going operations and robust innovation.

Henry Canitz (Hank)
Director, Product Marketing & Business Development




When I read the article, I was struck by how important it is for me to share it with the supply chain students at the Illinois Institute of Technology. I am sure it will motivate them to read your thoughts.


Herb Shields




Q: What was the US trade deficit in goods with China in 2016, in $billions?

A: $347 billion, which for a change was not another new recored, but imports are on the rise again in 2017.

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