25. Samsung Electronics
Samsung Electronics had a precipitous drop from number 8 last year to almost falling out of the Top 25 this year, but just to remain on the list at all is something of an accomplishment. After all, how many other companies could boast of having a Top 25 Supply Chain despite the U.S. Department of Transportation banning one of its products from air transportation? Such was the fate of the Galaxy Note7 smartphone, which had a nasty propensity to spontaneously combust. Gartner’s analysts, though, believe that Samsung will recover and point to the recently introduced Galaxy S8 smartphones, that feature such tech wizardry as face recognition, iris scanning and fingerprint scanning capabilities.
IBM’s old PC and server products are still alive and well in the marketplace, except of course they’re being made and sold by Chinese high-tech manufacturer Lenovo. As Lenovo’s product line has matured, so too has its supply chain strategy, according to Gartner’s analysts, from traditional product-centric quality metrics to customer-centric quality measures that focus on the overall customer experience. Lenovo has been using predictive analytics as part of its SWOT analysis, which has helped the company improve its forecast accuracy while reducing excess inventory levels.
UK beverage company Diageo made the list for the first time in 2017, displacing pharmaceutical firm GlaxoSmithKline, the only company to drop off the Gartner Top 25 rankings this year. Best known for popular spirits brands like Baileys, Guiness, Captain Morgan and Johnnie Walker, Diageo’s climb into the rankings was due in part to a creative product assessment technique known as tramlining, explain the Gartner analysts. This term, which derives from how a vehicle’s wheels follow grooves in a road’s surface, is how Diageo describes the process by which it tears down the individual cost of its products and compares them to both competitive products and internal benchmarks. Tramlining helped convince the company it could adopt a new pressure-sensitive label technology that lowered its costs by roughly $3 million.
BMW is the only automotive manufacturer on the Top 25 list this year, which Gartner attributes in part to its Connected Supply Chain program, which focuses on such areas as IT connectivity, AGVs and smart robots, augmented reality, connected vehicle distribution and sustainability. BMW is also realigning its supply chain in anticipation of producing autonomous vehicles within the next five years.
Kimberly-Clark, a personal care and paper goods manufacturer, uses real-time demand data from its customers to improve the accuracy of its forecasts by making adjustments almost on-the-fly in its distribution, inventory and manufacturing processes, according to Gartner. The company has also made reducing or eliminating all waste from landfills one of its key sustainability goals.
Cosmetics giant L’Oréal is part manufacturer / part retailer, thanks to its growing e-commerce business as well as its own brick-and-mortar stores. Omni-channel strategies are a big part of L’Oréal’s supply chain focus, as the company shifts to distributed order management, integration of marketplaces and more efficient reverse logistics to deal with the larger volume of returns due to e-commerce, explain Gartner’s analysts. The company is also focusing on improvements in inventory optimization and supplier visibility.
19. HP Inc.
Following Hewlett-Packard’s split in 2015 into two entities, HP Inc. now appears on the Gartner list, representing the PC and printer side of the business (Hewlett-Packard Enterprises retains the services side of the business). HP has upgraded its replenishment capabilities by using predictive analytics to forecast how often customers will need more printer ink. This has allowed the company to dramatically reduce its inventory buffers, Gartner’s analysts point out.
With Amazon now part of the “Masters” list, Walmart is now the only mass-market retailer left on the Top 25 list, and the company’s supply chain bona fides continue to impress. In the past year alone, Walmart has begun pilot testing blockchain technology on two food items, with the goal of improving speed of delivery to stores to reduce spoilage and waste; expanded its in-store pickup service; and launched a program allowing store associates to earn additional income by delivering products in their own vehicles to customers. And in its traditional 800-pound gorilla mode, Walmart launched Project Gigaton, which aims to “encourage” suppliers to reduce greenhouse gas emissions by one gigaton, which is said to be the equivalent of taking more than 200 million cars off the road for a year.
17. Schneider Electric
Workforce development is a key strength of energy and automation specialist Schneider Electric’s supply chain programs. According to Gartner, Schneider is well regarded for its learning academy, a broad-scoped rotation program and a focus on diversity and employee well-being. The company uses various digital tools throughout its supply chain in such areas as planning, purchasing analytics, smart factory and digital customer logistics.
BASF, a chemical conglomerate, continues to win praise from Gartner’s analysts for its “lighthouse” program, which is focused on digitizing the company’s logistics operation using prescriptive analytics to improve strategic planning. BASF is also applying analytics in such areas as customer service, risk and cost management, and environmental issues.
Those with long memories might recall that before Apple began its 10-year hold on the number one slot (which only ended when Gartner decided to boot Apple off the Top 25 and onto the “Masters” list), Nokia was the Top Supply Chain back in 2007, during a period when it was an undisputed smartphone leader. Those days are long gone, but Nokia has reinvented itself, and thanks to its recent acquisition of rival Alcatel-Lucent, the Finnish company has emerged (or reemerged) as a telecom networking giant. Its development of a total cost management tool has helped it better track manufacturing costs based on real-time operational data.
14. The Coca-Cola Co.
Coke Light sounds like a diet cola brand (and indeed it is overseas), but at the corporate level, it’s how The Coca-Cola Co. describes its asset-light supply chain strategy. A year ago, the soft drink giant sold off its U.S. manufacturing and distribution assets, with the goal of concentrating on producing concentrate, rather than bottling or transportation. Coke is also using mobile apps to accelerate the replenishment process.
13. Johnson & Johnson
Healthcare products giant Johnson & Johnson has 250,000 customers, who account for roughly 100,000 orders per day on a globally balanced scale. The company’s supply chain team is responsible for working with J&J’s R&D department to bring to life every product the company makes around the world—more than 300,000 SKUs—and to make those, test those and deliver those to customers worldwide. The supply chain team’s innovation strategy has become much more technology-focused in recent years, particularly in the use of Internet of Things-based solutions and 3-D printing.
Industrial products manufacturer 3M is focusing its supply chain efforts on three areas, according to Gartner: regionalizing its supply chains to shorten lead times; harmonizing standard global processes and tools; and accelerating the use of disruptive technologies such as robotics and 3-D printing to accelerate innovation. The company also has a workplace culture that openly encourages experimentation and creativity.
Beverage and snack food producer PepsiCo has been focusing on increasing visibility throughout its supply chain—both to improve efficiency in distribution and at the point-of-sale, and to support its sustainability initiatives, including reductions in water use and carbon emissions. According to Gartner, PepsiCo has adopted digital shelf visibility tools to improve forecast accuracy and on-shelf availability.
Starbucks claims that 99% of its coffee is ethically sourced, thanks in part to its creation of the Coffee and Farmer Equity Practices (CAFÉ) program, though as has become typical with multinational companies, the achievement of a specific sustainability target is largely the result of its own definition of sustainability. In any event, the retailer has announced plans to open as many as 12,000 more stores, on top of the 20,000 it already manages. On the technology side, Starbucks has stepped up its ability to take and fulfill smartphone orders, and is now piloting the use of an AI-based voice ordering app.
Gartner notes that consumer goods producer Colgate-Palmolive has been recognized often for its environmental and ethics programs, but left unsaid is that the company whose name refers directly to palm oil has also gotten some unwanted publicity for the decidedly unethical treatment of palm plantation workers by some of its suppliers. Where the company truly excels, though, is in its continuous improvement efforts, which have generated substantial savings over the past 15 years thanks to a plethora of projects in every area of the company’s operation.
Nike earned its spot on the Top 25 list the old-fashioned way: strong financial performance. The company’s supply chain team has been focusing on improving its sales and operations planning processes as well as its product lifecycle management capabilities. Nike’s use of lightweight fabric and computer design technologies have advanced its ability to customize products at scale, while driving waste out of its manufacturing process, according to Gartner.
Nestlé, like fellow CPG giant Unilever, scored a perfect 10 on the Gartner corporate social responsibility scale, but that requires a bit of myopia on the part of the official scorers, given Nestlé’s recent spate of negative headlines accusing the company of child slavery, deforestation and human trafficking within its extended supply chain. In any event, Gartner points to Nestlé’s pursuit of technology to boost its supply chain efforts, singling out Internet of Things-based vending machines that can automatically replenish themselves, as well smartphone apps that display the freshness and availability of their products in any store.
Not content with providing the chips powering PCs and servers, chipmaker Intel has set its sights on the nascent Internet of Things market and a potential market of billions of connected devices. According to Gartner, Intel is realigning its supply chain to produce smaller, more powerful chips, while relying on internally designed planning and optimization tools to accommodate a step-function increase in network complexity.
There’s quite a disconnect between how Gartner measures corporate social responsibility (CSR) and how the rest of the world looks at it. Case in point: Swedish fast-fashion retailer scored a perfect 10 on the Gartner CSR scale, despite industry reports that thousands of workers at a Cambodian facility have been subjected to sweatshop conditions; that women at various Asian supplier facilities are fired if they get pregnant; and unsafe building conditions in Bangladesh. Nevertheless, the company continues to expand both its online and brick-and-mortar store operations, and has introduced automation and warehouse optimization technologies in its distribution centers.
4. Cisco Systems
Networking equipment giant Cisco Systems’ supply chain proficiency is built the old-fashioned way: talent development and management. Besides the usual recruiting and mentoring programs, the company uses technology and upskilling to encourage its current employees to seek out opportunities for promotions and more challenging roles, according to Gartner. Those efforts are paying off in various ways throughout Cisco’s supply chain, particularly in energy efficiency and logistics.
Inditex, a Spanish “fast-fashion” retailer best known in the U.S. for its Zara line of clothing stores, managed to achieve a perfect 10 from Gartner for corporate social responsibility, which seems a bit at odds with the company’s reputation for using child labor and sweatshops in various areas of the world. That’s the dark side of what otherwise has been a very bright supply chain story, as the company has developed a process that’s made it possible to design new apparel and have it in stores in just over two weeks, a dramatic shrinking of the normal time-to-market supply chain for traditional apparel companies. Inditex relies on both online and brick-and-mortar channels, and is focusing on enhancing its omni-channel demand planning capabilities to support its growth.
McDonald’s flips a lot of burgers, no doubt about that. In fact, when it comes to inventory turns, Mickey D’s operates in a world of its own. Its average of 174.5 is far and away the best number among the Top 25 companies; the next-closest company is Samsung, with 15.1 turns. Explaining McDonald’s role at managing the largest restaurant supply chain in the world, Gartner’s analysts say, “McDonald’s is a classic example of how smaller teams at brand owners can manage large-scale transformation across outsourced vendors, suppliers, corporate stores and external customers. It governs through the use of multi-enterprise councils and well-defined performance management expectations.”
Unilever, according to Gartner, sits perched atop the Top 25 rankings due to high opinion polling as well as its perfect 10 on the corporate social responsibility component of the scoring. And to be sure, Unilever’s Sustainable Living Plan is one of the best known and most comprehensive corporate environmental initiatives. Even so, though, Unilever and other top consumer goods manufacturers also appearing on the Gartner list—such as Procter & Gamble, Nestlé and Colgate-Palmolive—were recently singled out by Amnesty International as companies that are profiting from child and forced labor. If nothing else, that indicates both a weakness in measuring corporate CSR programs as well as the enormity of trying to clean up the messes made by shady business operators large and small throughout every corner of the world. From all indications, Unilever still remains one of the pioneers in sustainable supply chain practices. And on the logistics side, Gartner points to the company’s shift from a point-to-point network to a courier-type approach, with nine European hubs that consolidate the movement of all goods.
Online retail giant Amazon has already ventured strategically into the brick-and-mortar world, but with the announcement of its $13.7 billion acquisition of Whole Foods, the company continues to rewrite the rulebook on retail-centric supply chain management. As the Gartner analysts rightly point out, “Hardly a day goes by without another announcement of Amazon’s foray into a new market, ownership of its own logistics capabilities or filing of patents to improve customer experience.” That includes wonky stuff like flying warehouses and automated trucks, as well as bread-and-butter expansion into more and more DCs. For its continued supply chain proficiency, Amazon was “promoted” off the Top 25 list to what Gartner calls its “Masters” list of companies whose scores finished in the top five for at least seven of the past 10 years.
-1. Procter & Gamble
While consumer packaged goods giant Procter & Gamble may not have invented supply chain management, it certainly is as good at it as any company has ever been. P&G’s end-to-end synchronization program focuses on pulling daily demand flows from retailers back through the supply chain to its distribution centers, production plants and suppliers, explain Gartner’s analysts. Indeed, P&G has even commercialized its Integrated Work System, extending its supply chain and manufacturing proficiency to other companies. The company is currently focusing on digital technologies to enable mass customization of its products.
Apple’s biggest competitor these days appears to be itself, as the high-tech giant is constantly being challenged by customers and Wall Street to outdo itself and create even more gadgets and devices that the world can’t live without. For a while there it looked like Apple’s next-big-thing might be automobiles, but the company put the brakes on that talk for the time being, though it continues to develop autonomous vehicle technologies. Apple is also reportedly developing a neural network chip to improve the ability of its various devices to handle tasks such as facial and speech recognition, according to a Bloomberg report.