Gartner Announces Rankings of the 2019 Supply Chain Top 25

Gartner, Inc. has released the results of its annual Supply Chain Top 25, identifying supply chain leaders and highlighting their best practices. Analysts announced the results at the Gartner Supply Chain Executive Conference, which is being held this week at the JW Marriott Desert Ridge Resort and Spa in Phoenix, Ariz.

“2019 is the 15th consecutive year we are publishing the Supply Chain Top 25 ranking,” said Mike Griswold, vice president, analyst at Gartner. “The ranking consists of an impressive group of leaders, including two new entrants, one from retail and one from the chemical sectors.

Colgate-Palmolive scored the top spot in the ranking for the first time, followed by Inditex, Nestlé, PepsiCo and Cisco (see Table 1). Chinese e-commerce company, Alibaba, and Dutch chemical company, Akzo Nobel, joined the Supply Chain Top 25 for the first time.

“Colgate-Palmolive’s strong financial performance, combined with its focus on an aligned organization and impressive work in corporate social responsibility, helped drive the move up from the fourth position in 2018 to the top spot in 2019,” said Mr. Griswold. “The company is focused on building a business-first mindset enabled by new technologies, enhanced decision-making and leadership capabilities.”

After seven consecutive years of scoring in the top five of the Supply Chain Top 25, Unilever joined Apple, P&G, Amazon and McDonald’s in the “Masters” category, which Gartner introduced in 2015 to recognize sustained leadership over the last 10 years.

“Unilever continues to lead the way with solid digital supply chain processes and operations, including leveraging automation, data science and machine learning,” said Mr. Griswold. “The company also recognizes the importance of improving digital-enabled manufacturing initiatives by using emerging technologies for maintenance and process control.”

Along with the “Masters” category, the Supply Chain Top 25 continues to offer a platform for insights, learning, debate and contributions to the rising influence of supply chain practices on the global economy.

Table 1. The Gartner Supply Chain Top 25 for 2019

Rank Company Peer Opinion1
(162 voters)
(25%)
Gartner Opinion1
(38
voters)
(25%)
Three-
Year Weighted ROA2
(20%)
Inventory Turns3
(10%)
Three-
Year Weighted Revenue Growth4
(10%)
CSR Component Score5
(10%)
Composite Score6
1 Colgate-Palmolive 961 347 19.9% 5.0 -0.2% 10.00 4.88
2 Inditex 1,091 341 16.2% 3.8 6.5% 10.00 4.80
3 Nestlé 1,262 374 6.9% 4.8 1.2% 10.00 4.27
4 PepsiCo 997 368 11.7% 9.0 1.2% 8.00 4.22
5 Cisco Systems  

699

 

518

 

4.0%

 

10.2

 

0.7%

 

10.00

 

4.13

6 Intel 576 454 12.4% 3.7 9.6% 6.00 4.12
7 HP Inc. 293 353 11.7% 8.2 7.3% 10.00 3.81
8 Johnson & Johnson  

737

 

348

 

7.6%

 

3.1

 

5.8%

 

10.00

 

3.80

9 Starbucks 900 167 19.3% 12.7 9.0% 4.00 3.74
10 Nike 1,194 186 13.3% 3.9 6.0% 4.00 3.73
11 Schneider Electric  

677

 

256

 

5.4%

 

4.9

 

0.7%

 

10.00

 

3.71

12 Diageo 625 404 9.8% 0.9 4.3% 10.00 3.44
13 Alibaba 1,095 72 10.6% 23.4 52.6% 0.00 3.43
14 Walmart 1,415 268 4.6% 8.6 2.5% 5.00 3.40
15 L’Oréal 858 229 9.9% 2.7 3.6% 8.00 3.38
16 H&M 582 155 13.7% 2.7 5.1% 10.00 3.35
17 3M 597 192 14.3% 3.8 3.2% 8.00 3.34
18 Novo Nordisk  

86

 

54

 

36.4%

 

1.1

 

0.8%

 

10.00

 

3.31

19 Home Depot  

402

 

124

 

22.2%

 

5.0

 

7.0%

 

5.00

 

3.29

20 Coca Cola Company  

1,329

 

196

 

5.8%

 

4.2

 

-10.7%

 

6.00

 

3.13

21 Samsung Electronics  

748

 

83

 

13.2%

 

9.8

 

8.7%

 

7.00

 

3.05

22 BASF. 597 252 6.4% 3.9 -0.6% 8.00 2.89
23 Adidas 714 172 9.2% 3.2 7.9% 5.00 2.75
24 Akzo Nobel 137 0 20.9% 4.6 -8.6% 8.00 2.61
25 BMW 733 131 3.8% 3.8 1.3% 10.00 2.57

Notes:
1. Gartner Opinion and Peer Opinion: Based on each panel’s forced-rank ordering against the definition of “DDVN orchestrator.”
2. ROA: (2018 net income/2018 total assets)*50% + (2017 net income/2017 total assets)*30% + (2016 net income/2016 total assets)*20%.
3. Inventory Turns: 2018 cost of goods sold/2018 quarterly average inventory.
4. Revenue Growth: (Change in revenue 2018-2017)*50% + (change in revenue 2017-2016)*30% + (change in revenue 2016-2015)*20%.
5. CSR Component Score: Index of third-party corporate social responsibility measures of commitment, transparency and performance.
6. Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROA*20%) + (Inventory Turns*10%) + (Revenue Growth*10%) + (CSR Component Score*10%).
2018 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 2019)

Three key trends stand out this year for supply chain leaders that are accelerating their capabilities, separating them further from the rest of the pack.

Personalization at Scale

Improving customer experience, with a sharpened focus on personalization, is a top priority for every company. Personalization at scale, however, is a key differentiator for more advanced companies.

“Personalization at scale requires a level of agility, supply chain flexibility and underlying technological capability in order to pull it off,” said Mr. Griswold. “Leading companies in the Supply Chain Top 25 have found the right balance. Where personalization is valued, they digitally capture customer requirements, flexibly convert designs to physical products and packages, and quickly get them into customers’ hands. Where standard product portfolio variety is good enough, they are ruthless about only keeping the best performers in the mix.”

Leveraging Ecosystems

As supply chain leaders face new challenges, such as fostering local talent for advanced skills and minimizing plastic waste creation and ocean pollution, they will need to focus on cooperation with an ecosystem of external partners will be the key to tackling problems of this scale. This change in perspective and approach is part of leading companies’ broader shift to run more purpose-driven supply chain organizations.

Driving Business-Led Digital Strategies

A wave of automation and augmentation has sped through corporate supply chains over the last five years and companies that grace the top of the Supply Chain Top 25 tend to be early adopters of new business concepts and technologies. For those furthest along in their digital supply chain journey, a return to the fundamental concept of business-led digital transformation is taking place.

“These leading supply chains are focusing on initiatives that understand and elevate the customer needs and the operational performance points needed to support them and work backward from those requirements to the process and technological transformations that will enable them,” said Mr. Griswold. “But keep in mind that transformational innovations don’t always convert to timely return on investment (ROI) right away. Often, optimization tends to deliver more immediate ROI.”

Gartner clients can read more in “The Gartner Supply Chain Top 25 for 2019.

Get information on how to innovate and scale the supply chain on the Gartner Chief Supply Chain Officer Insight Hub.

 

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