Colgate-Palmolive, Nestlé, PepsiCo, Cisco, top Gartner’s 2019 Supply Chain rankings
Gartner has released the results of its annual Supply Chain Top 25, identifying supply chain leaders and highlighting their best practices. “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. 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 organisation 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 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 recognise 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 recognises 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.
The Gartner supply chain Top 25 for 2019
| Rank | Company | Peer opinion
(162 voters) (25%) |
Gartner opinion
(38 voters) (25%) |
Three-
year weighted ROA (20%) |
Inventory turns
(10%) |
Three-
year weighted revenue growth (10%) |
CSR component score
(10%) |
Composite score |
| 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:
- Gartner opinion and peer opinion: based on each panel’s forced-rank ordering against the definition of DDVN orchestrator.
- ROA: 2018 net income/2018 total assets*50% + 2017 net income/ 2017 total assets*30% + 2016 net income/2016 total assets*20%.
- Inventory turns: 2018 cost of goods sold/ 2018 quarterly average inventory.
- Revenue growth: change in revenue 2018-2017 * 50% + change in revenue 2017-2016 * 30% + change in revenue 2016-2015 * 20%.
- CSR component score: Index of third-party corporate social responsibility measures of commitment, transparency and performance.
- 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 normalised to a 10-point scale prior to composite calculation. Ranks for tied composite scores are determined using next decimal point comparison.
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.
Personalisation at scale
Improving customer experience, with a sharpened focus on personalisation, is a top priority for every company. Personalisation at scale, however, is a key differentiator for more advanced companies.
“Personalisation 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 personalisation 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 minimising 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 organisations.
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 Griswold. “But keep in mind that transformational innovations don’t always convert to timely return on investment right away. Often, optimisation tends to deliver more immediate ROI.”
