Gartner announces rankings of the 2020 Supply Chain Top 25

Gartner announces rankings of the 2020 Supply Chain Top 25

Gartner, Inc. has released the results from its annual Supply Chain Top 25, identifying supply chain leaders and highlighting their best practices.

“In our 16th edition of the Supply Chain Top 25 we have an impressive group of leaders with new lessons to share, including a diverse set of six new entrants,” said Mike Griswold, vice president analyst with the Gartner Supply Chain practice. “With substantial amounts of the economy closed due the COVID-19 pandemic, leaders need an agile strategy that allows the supply chain organization to sense and respond to changes in the business context as they happen. Our ranking highlights companies that possess these strategies and other differentiating capabilities.”

Cisco Systems scored the top spot in the ranking, followed by Colgate-Palmolive, Johnson & Johnson, Schneider Electric and Nestlé (see Table 1). Six new companies joined this year’s list: Lenovo, AbbVie, British American Tobacco, Reckitt Benckiser, Biogen and Kimberly Clark. 

“Cisco’s revenue growth, strength in environment, social and corporate governance (ESG) and recognition of leadership in community opinion polls drove the move up from the fifth position in 2019 to the top spot today,” said Mr. Griswold. “Its ESG focus includes the circular economy, with the goal of having 100% of new Cisco products incorporate circular design principles by the financial year 2025.”

To recognize sustained supply chain excellence, Gartner introduced the “Masters” category in 2015. To be considered Masters, companies must have attained top-five composite scores for at least seven out of the last 10 years. All of last years’ Masters – Amazon, Apple, P&G, McDonald’s, and Unilever – qualified for the category this year. “The Masters continue to demonstrate advanced lessons for the supply chain community,” Mr. Griswold added. “The Supply Chain Top 25 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 2020

Rank

Company

Peer Opinion1

(151 voters)

(25%)

Gartner Opinion1

(44

voters)

(25%)

Three-

Year Weighted ROPA
2

(20%)

Inventory Turns3

(5%)

Three-

Year Weighted Revenue Growth
4

(10%)

ESG Component Score5

(15%)

Composite Score6

1

Cisco Systems

470

574

300.7%

12.5

2.9%

10.00

6.25

2

Colgate-Palmolive

1113

532

68.8%

4.7

1.0%

10.00

5.37

3

Johnson & Johnson

885

454

77.6%

3.0

3.6%

8.00

4.65

4

Schneider Electric

567

453

63.0%

5.4

4.2%

10.00

4.48

5

Nestlé

1084

350

40.0%

4.8

1.2%

10.00

4.44

6

PepsiCo

857

385

47.9%

8.2

2.7%

10.00

4.42

7

Alibaba

991

316

106.7%

23.9

54.0%

0.00

4.39

8

Intel

583

488

37.4%

3.5

5.8%

8.00

4.12

9

Inditex

737

351

34.7%

4.6

6.8%

10.00

4.11

10

L’Oréal

677

252

71.1%

2.8

7.4%

10.00

4.01

11

Walmart

1333

324

13.2%

8.5

2.4%

7.00

4.00

12

HP Inc.

296

389

51.1%

8.5

5.5%

10.00

3.87

13

Coca Cola Company

1195

207

75.4%

4.4

0.0%

6.00

3.74

14

Diageo

403

280

41.4%

0.9

6.2%

10.00

3.49

15

Lenovo

397

307

16.9%

11.2

7.0%

10.00

3.44

16

Nike

768

265

47.2%

4.0

6.7%

6.00

3.35

17

AbbVie

128

30

262.4%

4.1

7.6%

5.00

3.20

18

BMW

575

182

24.8%

3.9

4.2%

10.00

3.17

19

Starbucks

799

202

52.6%

13.0

7.7%

4.00

2.99

20

H&M

412

161

22.4%

2.8

7.7%

10.00

2.95

21

British American Tobacco

154

56

85.6%

0.7

18.1%

9.00

2.90

22

3M

624

207

54.1%

3.9

1.1%

6.00

2.90

23

Reckitt Benckiser

265

14

99.0%

3.8

8.2%

9.00

2.79

24

Biogen

79

27

152.2%

2.5

7.8%

7.00

2.78

25

Kimberly-Clark

534

80

34.6%

6.6

0.2%

10.00

2.76

1. Gartner Opinion and Peer Opinion: Based on each panel’s forced-rank ordering against the definition of “DDVN Orchestrator”.

2. ROPA: ((2019 operating income) / (2019 Net property, plant equipment + year end inventory)) *50%) + ((2018 operating income) / (2018 Net property, plant equipment + year end inventory)) *30%) + ((2017 operating income) / (2017 Net property, plant equipment + year end inventory)) *20%).

3. Inventory Turns: 2019 cost of goods sold / 2019 quarterly average inventory.

4. Revenue Growth: ((change in revenue 2019-2018) *50%) + ((change in revenue 2018-2017) *30%) + ((change in revenue 2017-2016) *20%).

5. ESG Component Score: Index of third-party environmental, social and governance measures of commitment, transparency and performance. 

6. Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROPA*20%) + (Inventory Turns*5%) + (Revenue Growth*10%) + (ESG Component Score*15%).

2019 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 2020)

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

Purpose-Driven Organizations

Supply chain teams at leading companies define their work using the language of purpose. They have recognized that solving the world’s largest problems only works through partnership with others in the broader community, as well as through their own radical transparency. 

“In the time of COVID-19, it has been a marvel to witness the strength and creativity of the supply chain community in keeping our society fed, supplied and healthy,” Mr. Griswold said. “For example, we’ve seen apparel companies manufacturing personal protective equipment and airlines converting dormant warehouses into food processing centers. Those shifts would normally have taken months or quarters to plan and execute. However, purpose- driven supply chain talent managed to shorten these timeframes to a couple of weeks. 

Business Model Transformers

One of the largest external forces impacting corporate supply chains is a dynamic competitive landscape driven by a combination of expanded customer expectations, new market entrants from existing industry ecosystems, and the emergence of non-traditional competitors. Leading supply chain organizations have learned to thrive in that environment and positioned themselves as disruptors – either through reinvention of their offerings and the ability to deliver them or by acquiring start-ups that offer the expertise to compete in new and reinvented markets.

Digital Orchestrators

Leading companies on the Supply Chain Top 25 are early and frequent adopters of digital technologies. More importantly, these investments enable business capabilities and outcomes that allow them to thrive in even the harshest economic conditions. 

“In the current environment, the natural tendency of many companies is to pull back spending, including money tied to transformational programs. Advanced supply chains are pressing forward, and in some cases, accelerating investments in real-time visibility, planning and agile supply execution capabilities that are well-suited for supporting uncertain demand mixes and volumes,” Mr. Griswold concluded. 

More information is available in the report “The Gartner Supply Chain Top 25 for 2020”. A replay of the webinar “The Gartner Supply Chain Top 25 for 2020” is available here. 

Learn more about how to lead organizations through the disruption of coronavirus in the Gartner coronavirus resource center, a collection of complimentary Gartner research and webinars to help organizations respond, manage and prepare for the rapid spread and global impact of COVID-19.

About the Supply Chain Top 25

The Supply Chain Top 25 ranking comprises two main components: business performance and opinion. Business performance in the form of public financial and ESG (environmental, social, governance) data provides a view into how companies have performed in the past, while the opinion component offers an eye to future potential and reflects leadership in the supply chain community. These two components are combined into a total composite score.

Gartner analysts derive a list of companies from a combination of the Fortune Global 500 and the Forbes Global 2000. In an effort to maintain the list of companies evaluated at a manageable level, a general annual revenue threshold of $12 billion has been applied. 

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