Smarter supply chain initiatives span Gartner's top 25 supply chains

Brenda Cole

Gartner has rolled out its 2013 Supply Chain Top 25 list of companies that excel at managing demand-driven supply chain initiatives. For the fourth year in a row, Apple took the top spot, but this year's list has also seen some big-name newcomers -- and departures -- in industrial and high tech manufacturing.

Three companies -- Ford, Lenovo and Qualcomm -- joined the list for the first time, while three others -- Kimberly Clark, HP and BlackBerry (formerly RIM) -- dropped off, according to Gartner Supply Chain Research Director Stan Aronow, an author of the Supply Chain Top 25 report.

"This is a fairly typical level of annual change for the list, so no surprise in that regard," Aronow said. He noted a shift in manufacturing verticals in recent years. "While industries such as retail, consumer packaged goods and high tech continue to populate the list, heavy industrial companies like CAT, Cummins and Ford have also emerged, which is very exciting for us," he said. "Also, within high tech, we now have two semiconductor companies, Intel and Qualcomm, and our first China-headquartered company, Lenovo."

Top supply chains boast innovation, demand-driven leadership

Although manufacturers like Ford and Intel don't seem to have much in common on the surface, all the companies in the Supply Chain Top 25 have mastered the art of the demand-driven supply chain, Aronow explained. "Demand-driven" means that the supply and product management processes of each company are integrated, he said, allowing for the agility needed to respond quickly to changes or new business opportunities that arise from market and customer demands.

"The defining characteristics of supply chains built to this design include the ability to manage demand, rather than just respond to it, a networked, rather than linear, approach to global supply and the ability to embed innovation in operations, rather than keep it isolated in the laboratory," Aronow said.

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Companies in the top 25 also have been identified by Gartner as supply chain leaders in their respective industries, he added. They are innovators among supply chain practitioners, and share their knowledge and best practices with peers at conferences and in written research.

Last, but not least, the top 25 "think differently," Aronow said. "These leaders aren't afraid to try out new ideas, like partnering with competitors on logistics or end customer distribution. They are also very proactive about enabling supply chain capabilities for their company's next businesses."

Candidates for the Supply Chain Top 25 are examined from both a financial and an opinion-based perspective, according to Aronow. "Public financial data provides a view into how companies have performed in the past, while the opinion component offers an eye to future potential and reflects leadership in the supply chain community. These two components are combined into a total composite score," he said.

Trends in supply chain initiatives

The makeup of this year's list reflects three notable trends in supply chain initiatives, Aronow said. First, companies are building on the basic foundation of supply chain management with initiatives in end-to-end supply chain segmentation, simplification, cost-to-serve analytics, multi-tier visibility and supply network optimization. "The leaders have gone beyond the theory and are now deploying the capabilities that others are just starting to consider," he noted. "In doing so, they are finding new and creative ways to use these capabilities, exploring synergies and opportunities they hadn't necessarily anticipated in advance."

Second, businesses are getting smarter about how they manage their supply chains financially, cutting costs without cutting corners. "[Due to slowed revenue growth,] we might have expected to see many companies retrench and slip back to focusing their supply chains solely and exclusively on delivering cost reductions and efficiency gains to corporate bottom lines," Aronow said. "Instead, leaders are embracing a new imperative for growth, realizing they have to get smarter about how they do it."

Lastly, companies are recognizing the importance of cultivating -- and retaining -- internal supply chain talent. "Leading supply chain organizations are going beyond specific talent initiatives to look at the fundamentals of motivation in their supply chain teams," Aronow said. "For them, it's about engaging hearts, not just minds; it's about igniting passion and excitement for the work, not just compliance."

"[Supply chain leaders] are connecting the dots between the work people do every day and its contribution to the societies within which they live, recognizing the difference that each individual can make in the world," Aronow said.

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