GARTNER SUPPLY CHAIN TOP 25

Gartner Supply Chain Top 25 Methodology

The Supply Chain Top 25 is the preeminent ranking of supply chain leaders. The ranking is comprised 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.

Company List

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 who do not have up-to-date publically available financial data. The final list typically consists of approximately 300 companies.

Business Data

The quantitative part of the Supply Chain Top 25 is comprised 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:

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 Corporate Social Responsibility (CSR) 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.

Opinion Data

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. CSR 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 is comprised 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.

Gartner Seven Dimensions of Demand
Driven Value Network Excellence

Orchestrate

  • Ecosystem driving beyond legally defined organizational and contractual boundaries to create joint value through partnerships and councils.
  • Value-based metrics support profitable trade-offs for shared value creation and capture across the ecosystem.
  • Supply chain strategy incorporates voice of the customer with outcomes tied to customer value. Supply chain initiatives coordinated across companies, including suppliers and customers.
  • Extended ecosystem executes strategy and risk management for the right balance of profitability and sustainability.
  • Self-directed teams coordinate enterprise and influence ecosystem decision making close to the point of execution aligned by values and goals.

Collaborate

  • CSCO shapes business strategy with a broadened span of control and influence. SC balances the drive for scalable efficiency with delivering multiple market-driven outcomes.
  • Outside-in metrics such as profitable perfect orders and customer satisfaction across the extended value chain.
  • Ongoing strategy process with trends scanning. All supply chain initiatives tied to strategy, coordinated across the company and benefits link to business operational and financial metrics.
  • Business units and partners use CSR frameworks to identify innovations that serve customer and other stakeholder interests.
  • Collaborative decision-making within a cascaded process framework that includes suppliers. Consistency between operating and financial plans. Inventory used for strategic risk and opportunity management.

Integrate

  • Cross-functional processes support business objectives. Processes and functions evolving toward regional and global models.
  • Integrated supply chain outcomes, such as total cost, capital efficiency and perfect order performance.
  • Multiyear SC roadmap based on comprehensive assessments and vision aligned to strategy. Coordinated and governed across all SC functions at multiple process levels.
  • Applies CSR concepts to supply chain strategy and risk management; operational functions unite to address material issues.
  • S&OP focus shifts to alignment and framing of cross-functional trade-off decisions while balancing demand and supply across the midterm time horizon. Inventory targets consider full risk-adjusted carrying cost.

Anticipate

  • Emphasis on functional excellence supported by the emergence of COEs to drive standards.
  • Function-specific objectives with a bias toward efficiency and repeatable scalability.
  • Ad hoc, uncoordinated response to company initiatives that impact supply chain. Groups and processes emerge for cost reduction without considering trade-offs.
  • Quality, cost-efficiency efforts offer some sustainability benefit; functional silos execute on enterprise-wide sustainability goal.
  • Monthly S&OP process balances supply with forecasted demand volume for near-term inventory control. Pressure to reduce inventory conflicts with low-cost focus.

React

  • Supply and delivery activities performed in business unit sales and manufacturing functions.
  • Business-specific objectives focus on achievement of revenue growth targets.
  • Business units control strategic supply decisions. Ad hoc groups form in regions or sites in reaction to operating issues without established governance.
  • Focus on EHS regulatory compliance; react to incidents in supplier network.
  • Isolated decisions, dominated by sales or manufacturing, driven by assumptions and history. Operating plan is separate from the financial plan.

Orchestrate

  • Multi-enterprise initiatives identified, measured and governed to realize maximum ecosystem value.
  • SCRM included with overall enterprise risk management. Risk mitigation and exploitation governed across the ecosystem.
  • Pervasive E2E processes for value-driven innovation focused on ecosystem impact.
  • Global strategy and network of development partners. Fluid career paths beyond SC supported by lateral and hierarchical models.
  • Integrated landscape supports network visibility and decisions. Emerging functionality employed to support innovation in pursuit of breakthrough capabilities for competitive advantage.

Collaborate

  • SC initiatives aligned and prioritized with business strategy. Cascaded metrics architecture aligned with proper time horizons and segmented targets.
  • Mitigation decisions based on value at risk and reducing time to recovery. Operational visibility and risk management extends to suppliers and service providers.
  • Collaborative innovation managed as a critical enabler of growth. Open innovation is planned, funded and championed.
  • SC drives its global talent strategy. Competency models include innovation and digital skills. Some mobility of career paths into other roles.
  • Joint, proactive IT and SC enablement of partner connectivity and flexibility for collaboration to improve customer experience for growth. Increased presence of SODs to support differentiated processes.

Integrate

  • Clear alignment of initiatives with goals and consistent global metrics. Cross-functional process improvement coordinated by specialist resources.
  • Risk management addresses resilience of the full value chain with business continuity plans to sustain essential functions during a disruption.
  • Formalized innovation supported by a COE with limited customer/supplier involvement.
  • Talent strategy defined with soft global linkages. Dedicated supply chain HR resource(s), competency models for leaders and orchestrators.
  • SC planning SOR with selective use of advanced functionality for differentiation (SOD). Increased emphasis on improved master data quality and integrated cross-functional processes.

Anticipate

  • Governance by function is focused on metrics consistency and control to follow internal standards. Functional metrics targets set with no coordination or explicit trade-offs.
  • Risk management is functionally led, with mitigation emphasizing the impact on costs and assurance of supply.
  • Innovation limited to simplification for individual functional performance and scalability.
  • Evolving SC ownership, part-time SC resources, SC-customized approach emerges, functional leadership and career paths for masters of disciplines.
  • Consolidation of transactional systems of record (SOR) begins. Rationalize local applications with emphasis on cost and functional standardization.

React

  • Independent silos react in isolation without alignment of objectives or consistency of practices or policies.
  • Emphasis on recovery from disruptions with no awareness of risk management and mitigation.
  • Ad hoc, personality-driven innovation in response to specific issues.
  • Supply chain staffing supported by corporate HR using standard job descriptions.
  • Disparate transaction systems with limited functionality. Investments driven by obsolescence and local needs.

Orchestrate

  • Dynamically orchestrate adaptable ecosystems of partners to deliver personalized solutions to customer problems.
  • Multiple operating models leading to different trade-off choices requiring changes across the ecosystem based on partner bargaining power.
  • Agility enabled with real-time visibility of multitier process capabilities. Joint innovation for value creation across partner ecosystem.
  • Service providers and trade partners integrated with aligned incentives to enable full network visibility for event management and risk mitigation.

Collaborate

  • Integration across partners, channels and all SC functions to deliver integrated solutions of products, software, services and content.
  • Multiple simultaneous operating models linking distinct targeted segmentations to achieve differentiated process and financial metrics.
  • Key partners provide input into product development and supply network decisions. Resiliency and total cost-to-serve focus.
  • LSPs segmented based on strategic importance. Selective collaboration and strategic outsourcing. FTZs leveraged for competitive advantage.

Integrate

  • Holistic design of sequential operations and information flow with conscious trade-offs between supply cost, agility and reliability.
  • Ongoing scenario modeling by specialists. Targeted segmentation (e.g., sites, suppliers, partners) to create a menu of approaches yielding different outcomes.
  • Sourcing, manufacturing and reverse logistics aligned to provide best overall performance for product supply outcomes, including new product launch.
  • Manufacturing and inventory considered in optimization of product distribution and returns network. Global engagement of international freight forwarders.

Anticipate

  • Arrange supply assets by function (supply contract portfolio, production assets, distribution network) for security of supply at minimum cost.
  • Modeling, simulation, and optimization targeted at specific opportunities. Develop standardized one-size-fits-all approach.
  • Strategic sourcing for reliable, cost-competitive product supply. Sites aligned by region or market and positioned to leverage capital efficiency, cost and tax.
  • Regional distribution network designed for product delivery at lowest cash cost. Uniform corporate agreements with LSPs.

React

  • Ensure product supply from company-owned assets serving subsets of product lines or markets.
  • Ad hoc, unconscious design often evolved over time or as acquired.
  • Supplier relationships managed locally. Custom design of each site for local requirements and product specifications.
  • Distribution capacity sized to support production. Service providers, agents and brokers arranged locally.

Orchestrate

  • All SC design, planning and operations, including quality and risk management.
  • Appropriate mix of configure, optimize and respond capabilities to ensure appropriate network response to events based on analytics and business rules.
  • Key supplier relationships across multiple network tiers align physical and information flows to share risk and value during the full product life cycle.
  • Control towers enable dynamic orchestration of material flow across ecosystem to maximize joint value and mitigate risk.
  • Granular, real-time, multitier ecosystem visibility. Planning systems of innovation enable convergence of planning with execution for enhanced response capability.
  • Quality, innovation and operational excellence culture supported by a high-performance management system.

Collaborate

  • SC design, planning and logistics align with segmented supply management, product life cycle and manufacturing.
  • Trade-off decisions for product supply supported by multi-echelon what-if analysis and value network collaboration.
  • Key suppliers integrated into product design, quality, CSR and BCP. Supplier summits foster alignment and innovation.
  • COEs support knowledge and performance management to operate and sustain an agile, resilient product supply response to markets and disruption.
  • Advanced supply planning for differentiated capability and MES integration. Door-to-door global logistics transparency framework supports monitoring and analysis.
  • Separate performance metrics for each major supply segment. Collaborative supplier performance management.

Integrate

  • Supply chain design, planning and logistics align with supply management, product life cycle and manufacturing operations.
  • Supply plan incorporates value chain capacity and constraints. Inventory supports location-specific cost and service trade-offs.
  • Supply contract portfolio aligned with product strategy. Formalized supplier relationship management process.
  • Globally aligned operating practices support reliable scalability. Supply chain plans balance operations across facilities to meet business needs.
  • Integrated supply planning SOR. Supplier portals and automated settlement. Integrated GTM systems with full visibility of shipments and inventory.
  • Multi-attribute scorecards used to manage performance. KPIs include total product supply cost and lead time.

Anticipate

  • SC includes finished goods supply planning and logistics. Coordination but limited alignment to manufacturing.
  • Decentralized DRP for some warehouse replenishment. Production planning to control inventory and meet demand.
  • Automated ordering and payment. Quality and delivery performance used in bid evaluations.
  • Regionally managed processes supported by automation systems. Scheduling manages short-term constraints.
  • ERP plans disconnected from factory scheduling. Fragmented carrier T&T systems. Automated requisition workflow.
  • Local safety and quality best practice sharing. Functional objectives and cost controls create internal conflicts.

React

  • Product supply managed within each division or business unit to fill orders.
  • Production based on budget volumes and available capacity pushed to warehouse storage.
  • Local supplier relationships managed informally with manual processes.
  • Capabilities vary and operations managed autonomously across sites. Emphasis on service at any cost with manual processes and frequent changes.
  • Separate operating and costing systems. Spreadsheet decision support. Manual transactions and shipment tracking.
  • Reactive approach to variation and defects. Uncontrolled processes difficult to measure and improve.

Orchestrate

  • Regional customer service synchronized with other regional processes in shared service centers. Integrated digital multichannel capability.
  • Order management aligned with customer differentiation and CTS analysis. E-commerce integrated into multichannel order management system.
  • Cost-to-serve modeling of delivery options. Multilateral collaboration with customers and carriers based on full network visibility and orchestration.
  • Single order management system with multilateral connectivity supports all channels.
  • Profitable delivery, cost to serve for key accounts and custom solutions.

Collaborate

  • Regional customer service centers embedded in local organizations. Standardized back-office activities and differentiated customer experience for joint value.
  • Directed ordering and CTP for configurable products. Highly automated OTC for low-end customers. Stand-alone e-commerce capability.
  • Transportation operates as a shared service. Collaboration with key customers and carriers to optimize asset utilization and delivery outcome.
  • Flexible system functionality supports order configuration, CTP and diverse customer needs. Integrated connectivity for control tower visibility and collaboration.
  • Perfect order rates based on customer experience. End-to-end cash cycle times. Joint scorecards and VOC surveys.

Integrate

  • Customer service part of the SC organization aligned to support commercial goals across multiple channels. Segmentation to maximize value at low- and high-end accounts.
  • Increased electronic ordering and invoicing. Order quantity and lead time policies reflect customer needs. Commitment rules and ATP logic support improved speed and accuracy.
  • Aligned regionally or globally by transportation mode through a unified carrier base. Electronic carrier tendering and ASN messages.
  • ERP-based order management system with integrated ATP and execution (TMS, WMS, GTM). Improved data quality enhances automation and visibility.
  • OTC cycle times, automation and defect rates through invoice and collection. POD for on-time delivery. Total cost to deliver to channel.

Anticipate

  • Order management in stand-alone customer service centers aligned by channel with a focus on compliance and productivity.
  • Electronic orders batch-processed. Order confirm and status messaging. Inconsistent enforcement of order guidelines (methods, lead times) and ad hoc prioritization.
  • All deliveries managed by standard processes. Ad hoc coordination of global trade.
  • ERP-based transactional order management system with integrated price, credit and regulatory checks. Separate WMS and TMS applications.
  • Standard metrics and variances for landed unit cost, fill rate, invoice accuracy and on-time shipment.

React

  • One-size-fits-all order capture and expediting embedded in plant sites/sales offices. Separate processes for returns and service parts.
  • Order acquisition is highly manual (phone, fax, email). Frequent service failures and delivery expediting due to inaccurate commitments.
  • Reactive shipping across disparate carrier base to fill orders. Outsourced freight payment and export compliance.
  • Disparate order management and execution systems. Data quality issues cause service failures.
  • Inconsistent localized cost detail and fill rate metrics.

Orchestrate

  • Includes creation of new demand to maximize revenue growth and value.
  • Demand planning includes attribute-based modeling and incorporates a wider array of external input and shaping estimates.
  • Influence demand sensing and shaping processes and promote with key ecosystem partners.
  • Demand shaping optimization analytics and fully scaled, enterprise DSR for demand sensing. Selective testing of innovative demand analytics.
  • Success measures include market share, cash flow and profit.

Collaborate

  • Demand is analyzed based on channel sell-through and shaped to optimize profitability and network performance.
  • Consensus demand plan by item/location/customer, using collaborative, probabilistic, time-series and causal methods.
  • Collaboration with network partners to sense demand. Inputs used to produce daily or weekly operating plan updates.
  • Advanced demand modeling and shaping. SODs integrated with DP SOR workflow and collaboration capabilities. Use of DSRs to capture external demand signals.
  • Cross-functional measurement for promotion, price and other demand shaping.

Integrate

  • Demand management within the commercial BU enables matching supply and demand with shaping levers (such as sales incentives, price or promotion), as applicable.
  • Unconstrained demand plan by item/location based on statistical and collaborative methods. Consensus demand plan is finalized within the S&OP process.
  • Channel sell-in and some sell-through data (e.g., POS) received, but not scaled from customers.
  • Demand planning SOR with some demand modeling capability. Limited workflow and CRM integration.
  • Monthly demand forecast error and bias with detailed analysis of causes by location and account.

Anticipate

  • Demand baselines are established based on history to support forward supply decisions.
  • Demand forecast at the most appropriate granularity level based on order history using a limited amount of market intelligence.
  • Demand visibility generally limited beyond channel sell-in; some pre-event, demand-shaping analysis.
  • Basic time-series modeling to generate a forecast within ERP or a demand planning module.
  • More granular monthly demand forecast error (mean absolute percent error) by material or SKU.

React

  • Forecasting is a part-time activity within sales or marketing for budgeting and financial updates.
  • Demand forecast is based on the sales budget for finished goods for a category, brand or family.
  • Demand visibility limited to orders. Channel dictates shaping levers.
  • Spreadsheets common with some point solutions connected to ERP systems.
  • Aggregated (family-level) regional demand variance against the sales budget.

Orchestrate

  • Open innovation across partners. Maximize ecosystem value through integrated solution innovation.
  • S&OP aligned tightly with the innovation pipeline enabling risk assessment and mitigation. SC segmentation and CTS analysis for evaluation of new offerings.
  • Simulation and modeling of customer outcomes versus operational and financial impact on life cycle portfolio complexity.
  • Seamless interaction of applications (including partner systems), managing open innovation and all product life cycle processes.
  • Success measured based on value across ecosystem incorporating partner innovation, network cost and customer outcomes.

Collaborate

  • Evaluate cross-brand portfolios for differentiated value. Market opportunities, innovation inputs and design trade-offs assessed collaboratively with partners.
  • Product portfolio management linked to S&OP early for strategic and operational assessment across multiple brand platforms.
  • Cross-functional feedback across internal and external partners to assess joint value within the life cycle portfolio.
  • Systems of differentiation support analysis and execution and collaborative data management with partners.
  • Impact on total portfolio performance. Metrics include new product time-to-value and return on R&D.

Integrate

  • Ideas prioritized based on value to business strategy. Customer use analysis and cost impacts of new variants factored into decisions. Co-development of product and supply chain processes.
  • Integrated product, production, supply and service development techniques used for broad sharing of design decisions. Product launch coordinated with S&OP.
  • Product roadmaps shared cross-functionally to reduce risk. Full SC impacts of product complexity factored into portfolio decisions.
  • A single source of product information shared across functions. Functional applications integrated by common master data with clear ownership.
  • Impact on ROA and asset efficiency. Additional metrics include design changes, product variability, yield and field performance.

Anticipate

  • Marketing-defined requirements drive new product variants. Develop for production, incorporating reuse of existing materials and processes to improve cost and utilization.
  • Product and production processes co-developed with emphasis on cost reduction after launch.
  • Existing product maturity considered during phase-in. Cost of complexity indirectly influences portfolio decisions.
  • Product data consolidation and process workflow supported by separate functional applications and spreadsheets for analysis and execution.
  • Additional success measures include reuse of existing component parts and achieved cost reduction after launch.

React

  • Minimal reuse of parts or processes. Product variants proliferate without consideration of the impact to the portfolio or supply efficiency.
  • Minimal operations involvement early in design or development.
  • Revenue-based evaluation of either continuation or phase-out of existing product variants.
  • Disconnected applications with multiple PDM systems across development groups.
  • Metrics include time to market, market share, revenue growth and direct product cost.

Scoring

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.

Masters

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 5 rankings for at least 7 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 were to fall out of having a top five composite score for long enough, they would lose this 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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