Monday, May 25, 2015

Gartner Announces Their Supply Chain Top 25 Rankings For 2015

Amazon Takes the Top Spot in Top 25 Rankings; Apple and P&G Move into New Masters Category Winners Revealed at Gartner Supply Chain Executive Conference in Phoenix, AZ. By 24/7 Staff


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May 14, 2015
Gartner, Inc. has released the findings from its 11th annual Supply Chain Top 25, identifying global supply chain leaders and highlighting their best practices.
Analysts announced the findings from this year’s research at the Gartner Supply Chain Executive Conference, which is being held through today at the JW Marriott Desert Ridge Resort and Spa in Phoenix, AZ.
“2015 marks the 11th year of our annual Supply Chain Top 25 ranking,” said Stan Aronow, research vice president at Gartner. “In this edition of the Supply Chain Top 25, we have several longtime leaders with new lessons to share and a number of more recent entrants from the high-tech, consumer products, retail and industrial sectors.”
The top five include three from last year - Amazon, McDonald’s and Unilever - one returning leader, Intel, and a newcomer to this elite group, Inditex (see Table 1).
Three companies rejoined the list this year after a lengthy hiatus, with L’Oréal at No. 22, Toyota at No. 24 and Home Depot at No. 25. Those familiar with Gartner’s Supply Chain Top 25 may wonder why perennial leaders Apple and P&G are not included on this year’s list.
“This year we are introducing a brand new category to highlight the accomplishments and capabilities of long-term leaders. We are, therefore, recognizing those companies that have consistently had top five composite scores for at least seven out of the last 10 years and placing them into a ‘masters’ category, separate from the overall Supply Chain Top 25 list,” said Mr. Aronow. “In this the inaugural year for supply chain masters, we want to recognize two companies demonstrating sustained leadership: Apple and P&G.”
Mr. Aronow said that both Apple and P&G have made major contributions to the supply chain profession over the years. P&G was one of the first to characterize and embed the concept of a consumer-driven supply chain, and Apple, defining the very notion of a “solution” supply chain, blazed new trails with its demand creation capabilities.
Table 1. The Gartner Supply Chain Top 25 for 2015
RankCompanyPeer Opinion 1(200 voters)(25%)
Gartner Opinion 1 (35 voters) (25%)
Three- Year Weighted ROA2 (25%)
Inventory Turns 3(15%)
Three-Year Weighted Revenue Growth 4 (10%)Composite Score 5
1Amazon3,3944680.0%8.7 21.7%  5.32
2  McDonald’s  1,626  283  14.6%  157.3  -0.2%  5.23
3  Unilever  1,996  619  11.3%  6.7  -0.2%  5.15
4  Intel  1,064  481  12.1%  5.0  2.4%  4.09
5  Inditex  1,003  297  17.0%  3.8  8.8%  4.04
6  Cisco Systems  1,147  500  8.4%  12.6  1.5%  4.01
7  H&M  809  89  26.6%  3.7  12.8%  4.01
8  Samsung Electronics  1,568  330  10.5%  17.7  0.5%  3.91
9  Colgate-Palmolive  1,034  318  17.8%  5.0  0.6%  3.91
10  Nike  1,369  214  14.5%  4.1  10.7%  3.78
11  Coca-Cola  1,938  287  8.9%  5.4  -1.0%  3.49
12  Starbucks  1,215  174  13.0%  6.8  11.6%  3.48
13  Walmart  1,794  259  8.4%  7.8  2.5%  3.39
14  3M  1,161  150  14.9%  4.2  2.7%  3.09
15  PepsiCo  890  330  8.9%  8.3  0.3%  3.04
16  Seagate Technology  176  114  19.9%  10.8  3.9%  2.99
17  Nestlé  1,123  244  9.9%  5.1  2.0%  2.93
18  Lenovo Group  771  218  3.9%  12.8  18.9%  2.89
19  Qualcomm  218  50  15.5%  8.8  17.8%  2.85
20  Kimberly-Clark  819  243  10.5%  5.9  0.8%  2.76
21  Johnson & Johnson  1,192  139  11.1%  2.8  4.6%  2.73
22  L’Oréal  749  118  12.5%  2.9  2.9%  2.41
23  Cummins  148  149  11.5%  5.2  4.7%  2.16
24  Toyota Motor  1,322  23  3.6%  10.6  13.4%  2.16
25  Home Depot  268  44  14.1%  4.6  5.6%  2.11
Notes:
1. Gartner Opinion and Peer Opinion: Based on each panel’s forced-rank ordering against the definition of “DDVN orchestrator”
2. ROA: ((2014 net income/2014 total assets) * 50%) + ((2013 net income/2013 total assets) * 30%) + ((2012 net income/2012 total assets) * 20%)
3. Inventory Turns: 2014 cost of goods sold/2014 quarterly average inventory
4. Revenue Growth: ((change in revenue 2014-2013) * 50%) + ((change in revenue 2013-2012) * 30%) + ((change in revenue 2012-2011) * 20%)
5. Composite Score: (Peer Opinion * 25%) + (Gartner Research Opinion * 25%) + (ROA * 25%) + (Inventory Turns * 15%) + (Revenue Growth * 10%)
2014 data used where available. Where unavailable, latest available full-year data used. All raw data normalized to a 10-point scale prior to composite calculation. “Ranks” for tied composite scores are determined using next decimal point comparison.
Source: Gartner (May 2015)
Gartner Analysts Highlighted Three Standout Trends For Supply Chain Leaders In 2015:
Bimodal Supply Chain Strategies
Chief supply chain officers (CSCOs) and their teams face an environment where business models must change quickly, where the expectation is that they will spend as much or more time growing and innovating as they will streamlining and promoting efficiency. Gartner has termed this reality “bimodal.” Traditionally, supply chain executives have been successful because they were good at driving down costs. The leaders now realize they will be judged on cost containment as well as the ability to promote and support the top line.
Increased Customer Intimacy
Another trend is a focus on customer experience as a measured priority in supply chain organizations. Independent of the product being sold, leaders are focused on listening more closely to their customers and responding with innovative solutions.
“This year, we heard from more companies extending visibility and insight beyond first-line customers and moving on to the end users of their products. Their supply chains are not just collecting data concerning the details of the sale, but also the patterns of usage and resulting sentiment of the end user,” said Mr. Aronow. “Ultimately, pleasing customers with strong operational supply chain performance, when combined with improved solution performance, will lead to measurable improvements in customer satisfaction and contributions to the top line.
Emerging Digital Business Models
While still a nascent concept, the view on how supply chain can leverage digital capabilities to support new business models and improve broader value chain performance became clearer this year. Manufacturing is currently at the center of many digital capabilities and leading companies recognize that “the factory” is not just somewhere inside the four walls of the company or an outsource partner. Digital synchronization of manufacturing lines with upstream suppliers and other supply chain functions is where the business value starts to multiply.
The logistics function is not far behind manufacturing in terms of automation using sensors, gateways, tracking systems and business rules to predict and alert when there will be a variance to the current plan of record. Logistics control tower capabilities are not new, but when combined with more affordable sensors and computing power, they portend the democratization of deeper visibility that can reduce risk and improve both operating costs and customer-service levels for many companies.
More detailed analysis is available in the report “The Gartner Supply Chain Top 25 for 2015.”
About the Gartner Supply Chain Top 25
The Supply Chain Top 25 rankings comprise two main components: financial and opinion. Public financial data gives a view into how companies have performed in the past, while the opinion component provides an eye to potential and reflects future expected leadership, a crucial characteristic. These two components are combined into a total composite score.
Gartner analysts derive a master list of companies from the Fortune Global 500 and the Forbes Global 2000, with a revenue cutoff of $12 billion. Gartner then pares the combined list down to the manufacturing, retail and distribution sectors, thus eliminating certain industries, such as financial services and insurance.
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