Yesterday Tenneco asked for help in setting targets for the Supply Chain Metrics That Matter. We are always glad to help companies complete their supply chain financial benchmarks. This is a complimentary service on Beet Fusion. The reason is simple. As leaders share peer groups and insights, we learn with them, and we share public information with the larger supply chain community so everyone can learn. Attached is the analysis we completed for Steve Vielmetti. (Steve is one of my favorite supply chain leaders. I first met him when he was at Conagra and worked with him when he moved to Johnson Controls.)
For those of you that do not know Tenneco, the company states they are a global leader in developing the latest in "clean air and ride performance products and systems for automotive, commercial truck and off-highway original equipment markets and the aftermarket." Simply put, think shocks, mufflers and exhaust systems on your car.
The company trades under the stock symbol TEN, was founded in 1940, and is currently at $8 billion in annual revenue.
Attached is the analysis which we completed for Steve and his team. On page one note that Tenneco is lagging the industry on the supply chain metrics that matter. For the period of 2011-2014 Tenneco's operating margin is 6% versus a peer group of 8%. Their inventory turns are 12 versus their peer group at 22. However, due to concentrated work on improving supply chain excellence, their ROIC is now at peer group. This is a story where the supply chain is performing below its peer group, but driving great improvements in performance.
Also note that the overall industry is getting better at the Supply Chain Metrics That Matter. (This includes growth, operating margin, inventory turns, and Return on Invested Capital)