The Supply Chain Top 25 is the preeminent ranking of supply chain leaders. The ranking is composed of two main components: a quantitative measurement of business performance and a qualitative representation of both peer and Gartner analyst opinions. These two components are combined into a total composite score which ultimately determines the ranking. The ranking is revealed each year at the Gartner Supply Chain Executive Conference.
Each year we determine the companies to include in the Supply Chain Top 25 study by starting with the combined Fortune Global 500 and Forbes Global 2000 lists. In an effort to have a manageable number of companies in the study, a $12 billion minimum revenue threshold is applied. We also remove companies that do not have supply chains for physical products or whose supply chains have unique characteristics that distort the financial metrics used in the ranking. Finally, we eliminate companies that do not have up-to-date publically available financial data. The final list typically consists of approximately 300 companies.
The quantitative part of the Supply Chain Top 25 is composed of three financial metrics and a corporate social responsibility metric which are combined to create a weighted average score. This score represents 50% of a company's total composite score. Below is the list of metrics used and how they're calculated. All financial data is taken from each company's annual report:
- Return on Physical Assets (ROPA) — Operating income / (net property plant and equiptment +year end inventory)
- Inventory turns — Cost of goods sold / inventory
- Revenue growth — Change in revenue from prior year
- Environmental, Social and Governance (ESG) — Index of third-party ESG measures
We use a three-year weighted average for the ROA and revenue growth metrics. The yearly weightings are as follows: 50% for the most recent year, 30% for the second year and 20% for the third year. For inventory, we use a one-year quarterly average calculation.
The Environmental, Social and Governance (ESG) component score assesses each company's commitment to and proficiency in running socially and environmentally responsible supply chains. Using trusted third-party sources, points are awarded if companies produce publicly-available sustainability reports using accepted standards and if certain expert third parties recognize their exceptional performance in social and environmental responsibility.
The opinion component plays an important role in identifying the “leadership” aspect of the ranking. The results highlight companies that are not only engaged in supply chain process innovations with exemplary outcomes, but that also share what they’re doing with the supply chain community at large and provide leadership to others. ESG is an additional aspect of supply chain leadership, and voters are asked to consider each company’s commitment to running a supply chain that addresses social, environmental, ethical human rights and consumer concerns in its operations and core strategy.
The opinion component is determined by two independent panels: a Gartner analyst expert panel and a global peer panel. The results from both panels represent 50% of a company’s total composite score, evenly weighted at 25% from each panel.
Global Peer Panel: The goal of the peer panel is to draw on the extensive knowledge of the professionals that, as customers and/or suppliers, interact and have direct experience with the companies being ranked. Additional knowledge of companies on the list is gained by exposure to periodicals, websites, white papers and conferences. Supply chain professionals and academia are eligible to be on the panel, however only one panelist per company is accepted. Excluded from the panel are consultants, technology vendors and people who don’t work in supply chain roles (such as public relations, marketing or finance).
Gartner Analyst Panel: The Gartner panel consists of both industry and functional analysts, each of whom draw on their primary field research and continuous study of companies in their coverage area. Analyst voters utilize the same online voting system as does the peer panel.
Polling Procedure: Polling is conducted via a Web-based, structured voting process. Panelists are taken through a four-page system to get to their final selection of leaders that come closest to the demand-driven ideal.
All this information — the four business data points and two opinion votes — is normalized onto a 10-point scale and then aggregated, using the aforementioned weighting, into a total composite score. The composite scores are then sorted in descending order to arrive at the final Supply Chain Top 25 ranking.
The Masters category highlights the accomplishments and capabilities of long-term supply chain leaders in the Top 25. Companies qualify for the Masters category if their composite score places them in the top five rankings for at least seven out of the past 10 years. The Masters category is separate from the overall Supply Chain Top 25 list, but it is not a retirement from being evaluated as part of our annual research study. To the contrary, if a “master” company loses its top five composite score for long enough, it will lose the Masters designation and be considered as part of the Supply Chain Top 25 ranking in the same way as any other company in our study.
Read the Global Peer Opinion Panelist Frequently Asked Questions
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