Today, industry analyst firm Gartner announced the findings from its annual Supply Chain Top 25 rankings, an annual event that comes with the usual fanfare held at the Gartner SCM Executive Conference.
As has been our previous posture, Supply Chain Matters is providing its social media voice of observation and comment and not an endorsement of any analyst firm rankings of supply chains. Our previous annual commentaries have well reflected our beliefs that such ranking criteria can be misconstrued, especially when ranking criteria would tend to favor supply chains that avoid major ownership of assets and inventory, or tend to weight other criteria lower, such as sustainability and social responsibility practices. We will, however complement Gartner for finally including much more transparency in disclosing the individual ranking scores in its press release announcement.
First and foremost, Supply Chain Matters once again extends our congratulations to those supply chain organizations cited in the 2016 Supply Chain Top 25 rankings. Such recognition often reflects a lot of hard work and responsiveness to changing business needs, especially in today’s fast-changing industry environments.
Unlike previous years, the 2016 rankings feature a healthy complement of movement as well as new entrants, which is good. As has been our practice in prior commentaries, we reflect below the history of Gartner Supply Chain Top 25 dating back to 2010. We believe that providing this broader context is more pertinent for contrasting usual players vs. those supply chains on a transformative journey.
For the first time, Unilever garnered a well- deserved number one 2016 ranking, having climbed from Number 25 in 2010. Rounding out the 2016 top five rankings were McDonalds, Amazon, Intel and H&M Hennes & Mauritz. Nestle’s 2016 ranking as #10 from last year’s #17 ranking is noteworthy and well-deserved.
Amazon’s drop from being number one in 2015, to the number three ranking in 2016 was somewhat a surprise, since it garnered by far the highest peer opinion votes. What might have led to such drop was Amazon’s current heavy investment in added supply chain capabilities in customer distribution centers, direct leasing of air freight and trucking fleet. We suspect that as this current last mile customer fulfillment strategy continues to manifest itself in the months to come, that peer vote will indeed be perceptive.
The five new entrants to the Top 25 Supply Chains were BASF, BMW, GlaxoSmithKline, HP and Schneider Electric. From our lens, HP was somewhat of a surprise given its corporate split as well as the magnitude of cost and headcount cuts that have occurred. HP being ranked higher than Lenovo (#25) is perplexing given what the latter has accomplished in three-year weighted global revenue growth and inventory turns.
In its announcement, Gartner cites an increasing emphasis on corporate social responsibility as an emerging competency. This author just returned from the ISM 2016 annual conference where I had the opportunity to view a presentation by PepsiCo on its efforts in this area. I walked away very impressed with PepsiCo’s far-reaching efforts that manifest not just supply chain focused sustainability practices, but overall business sustainability tenets that include social, environmental and business tenets. I was therefore disappointed in the 4.00 CSR Component Score attributed to PepsiCo, especially in the light of other food and beverage firms.
As noted in our Supply Chain Matters posting reflecting on the 2015 rankings, some supply chain teams along with their ecosystems will be pleased and others rather disappointed after lots of hard work. Industry peers may also be surprised. There is no pleasing in any form of ranking and consistency of objectivity based measures and process remains essential.
Once again, congratulations to all supply chain teams included in the Gartner 2016 Supply Chain Top 25.