Apple Maintains the Top Position for Fourth Year in a Row
Gartner, Inc. has released the findings from its seventh annual Supply Chain Top 25. The goal of the Supply Chain Top 25 research initiative is to raise awareness of the supply chain discipline and how it impacts the business.
Analysts announced the findings from this year's research at the Gartner Supply Chain Executive Conference (http://www.gartner.com/technology/summits/na/supply-chain/), which is being held at The Phoenician Resort & Spa in Arizona, USA, through 3 June.
"Four key themes emerged this year among the leaders, including how they deal with volatility, their approaches to value chain network integration, their focus on sustainable execution and their abilities to orchestrate," said Debra Hofman, research vice president at Gartner.
Gartner analysts said one of the trends they've seen over the last several years is a move from the notion of "supply chain" to "value chain" and a concomitant increase in the span of control of the supply chain organisation.
"The old image of a supply chain organisation limited to either inbound materials management or logistics, with procurement, planning, manufacturing, and customer service as totally separate functions, is fading," Ms Hofman said. "What's replacing it is a supply chain organisation, often reporting at the board level, that includes the functions of plan, source, make and deliver. It also increasingly includes functions such as customer service and new product launch, and links them through the cross-functional processes and roles that are so critical to being demand-driven. The consumer-oriented companies, with their need to renew product lines constantly and their appetite for downstream data, have led the way in this change, which may at least partially explain the steady drift away from industrial companies making the list."
Apple held onto the No. 1 position for the fourth year in a row (see Table 1). The company continued to post strong financials and top-of-the-line voting scores. Research In Motion, which was new to the list last year, rose to No. 4 this year with enviable financials and solid votes. Amazon, another newcomer last year, rose five spots to No. 5 in the 2011 ranking. Colgate-Palmolive, rising steadily since 2009, moved to No. 13 this year.
(download table below)
The leaders took some very clear lessons from the events of the past couple of years, with one of them being the need for supply chain resilience: the ability to deliver predictable results, despite the volatility that many have pointed out is now here to stay. Gartner analysts said speed, agility, efficiency, responsiveness and innovation all remain critical, but equally important is a resilient supply chain. Companies like Cisco, Dow Chemical, RIM, Unilever and others are actively designing in structures, processes and methodologies to create and expand this resiliency not only in their own supply chains, but in those of their trading partners, as well.
Gartner analysts said they see companies such as Samsung, which have always been vertically integrated, weathering the ups and downs through ownership of supply, and others like The Coca-Cola Company and PepsiCo becoming more vertically integrated with the acquisition of their largest bottlers. On the other hand, companies such as Microsoft and Cisco are managing an extensively outsourced network of trading partners. "The key isn't whether a company owns all the pieces of its network — it's how well it controls the outcome of the activities that take place in the network that end in the delivery of a final product to a customer," Ms Hofman said.
Industry leaders are setting their sights beyond the articulation of a clear vision to the need for sustainable execution against that vision. These companies understand that, although a long-term supply chain vision is critical to communicate future value, the ability to replicate, scale and continually build on best practices across the organization in a sustainable way — going beyond a one-time success or pockets of excellence — is just as critical.
"The leaders have been moving steadily up the demand-driven maturity curve over the last several years," Ms Hofman said. "What differentiates the companies that are true 'orchestrators' is that they go beyond simply borrowing and adapting others' best practices. They create new ones altogether, often defying 'conventional wisdom' to rewrite the rules and increase the gap between themselves and others."
More detailed analysis is available in the report "The Gartner Supply Chain Top 25 for 2011." The report is available on Gartner's website.