Gartner, Inc. has released the results from its annual Global Supply Chain Top 25, identifying leading supply chains and highlighting their best practices.
“Nineteen companies achieved the highest possible environmental, social and governance (ESG) score this year, reflecting the growing importance supply chain leaders assign to these initiatives,” said Mike Griswold, vice president team manager with the Gartner Supply Chain practice.
Cisco Systems scored the top spot in the ranking for the third consecutive year, followed by Schneider Electric, Colgate-Palmolive, Johnson & Johnson and PepsiCo (see Figure 1). Three companies joined this year’s list for the first time: Microsoft, Siemens and AstraZeneca.
“Cisco continues to adapt in various ways to the changing environment, and its supply chain moves in alignment,” Griswold said. “ESG is a big focus, with circular concepts incorporated in the design, operations and consumption aspect of the products and the supply chain.”
To recognize sustained supply chain excellence, Gartner introduced the “Masters” category in 2015. To be considered Masters, companies must have attained top-five composite scores for at least seven out of the last 10 years. All of last year’s Masters – Amazon, Apple, P&G, McDonald’s, and Unilever – again qualified for the category this year.
“All of the Masters provide prime examples of how to deliver agility and responsiveness at scale for sustained periods of time,” Mr. Griswold added. “Other chief supply chain officers (CSCOs) can look to them and the other organizations in the ranking to learn their best practices.”
Figure 1. The Gartner Supply Chain Top 25 for 2022
|4||Johnson & Johnson||5.62|
|12||The Coca-Cola Company||4.36|
|24||British American Tobacco||3.23|
Note: Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROPA*15%) + (Inventory Turns*5%) + (Revenue Growth*10%) + (ESG Component Score*20%)
Source: Gartner (May 2022)
For 2022, the Top 25 and Masters companies embraced four macro trends.
The CSCO as Chief Ecosystems Officer
In recent years, CSCOs have become drivers of new business models, sustainability efforts and commercial innovation. To fulfill their new responsibilities, supply chain leaders are looking beyond their own company and strive to create coopetition-based ecosystems that are equipped to address larger scale challenges.
“For example, many consumer goods companies in the ranking are joining forces through the Consumer Goods Forum to set the agenda for the development of new plastic recycling technologies. This form of cooperation is an effective way to address the environmental crisis,” Griswold said.
Self-Stabilizing Supply Chains
To become more agile in the face of ongoing disruption, leading supply chains have transformed their decision-making processes and funding. Some have deployed temporary transformation teams to address near-term challenges in the business, knowing they will return to their day-to-day work once the environment has stabilized.
This ability to react quickly is driven by adaptive funding techniques based on venture capital models. Those models allow for transformation budgets to flex up based on successful pilots justifying greater scale or flex down in cases where experiments don’t pan out or resources are more needed elsewhere.
Progress on Broader Sustainability Agenda
Leading supply chains have announced ambitious “net zero” goals that include Scope 3 emissions reductions with suppliers and customers. “Companies such as Walmart, Microsoft and Unilever have formal programs in place to track the status of supplier reduction projects and quantify the resulting reductions over time,” Griswold added.
In the high-tech industry, circular economy models are gaining in popularity. Companies such as Cisco, Lenovo and HP Inc. are redesigning their broader business models away from the periodic sale of discrete pieces of equipment to service-based models that include the responsible collection, recycling and disposal of end-of-life products.
Human-Centric Digital Automation
Supply chain leaders are tasked with balancing long-term investments in automation with immediate investments in technologies that reduce employee cognitive load ,and prioritize time and attention to areas where people perform better than machines, such as relationship building and responding to new operating conditions. There are also cases where people perform better with machines. For example, warehouse or factory workers can increase their productivity by working with cobots.
“To prepare their employees for the future, leaders are prioritizing programs that train digital literacy and dexterity. These educational and applied learning programs enable employees to use data-driven analytics for more informed decision making in their roles,” Griswold concluded.
Participants at Gartner Supply Chain Symposium/Xpo can attend the session “Keynote: Unlocking the Potential of the Supply Chain: Lessons From Top 25 Leaders”.