Monday 21st Aug 2017 - Logistics & Supply Chain

What happened to Apple?

This is the time of year that I normally get to write: “Apple tops Gartner supply chain rankings”. But not this year. What is going on?

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

Gartner has just published its 11th annual Supply Chain Top 25. In many of those previous years Apple topped the rankings. But this year the top slot goes to Amazon. Not only that, McDonald’s is second and Unilever is third.

In fact, what Gartner has done is to take Apple out of the rankings and placed it in a new “Masters” category. This category is only for those companies that have top five composite scores for at least seven of the past ten years. It’s an exclusive club – at the moment only Apple and Proctor & Gamble are members.

Stan Aronow, Gartner’s research VP, said that both Apple and P&G have made major contributions to the supply chain profession over the years. P&G was one of the first to characterise and embed the concept of a consumer-driven supply chain, and Apple, defining the very notion of a “solution” supply chain, blazed new trails with its demand creation capabilities.

It’s worth remembering that Gartner’s scoring system relies heavily on opinions – 25 per cent of the total score is down to peer opinion, while another 25 per cent is Gartner opinion. The rest comes from three generally available metrics: return on assets, inventory turns, and revenue growth.

This tends to favour large well-known organisations – Amazon for example got a score of 3,394 in the peer opinion section (compared to a lowly 176 for 16th paced Seagate). And that was enough to counteract the fact that Amazon scored zero for return on assets.

In fact, Seagate is a good example of a company that scored well on the key metrics – 19.9 per cent return on assets, 10.8 inventory turns, and 3.9 per cent revenue growth. But it got low scores from both its peer group and Gartner’s analysts, leaving it in the bottom half of the table. The full ranking is below.

Of course, taking out Apple and P&G has not only left space for a new number one – it has also opened the way for more new companies to come into the ranking – this year for example L’Oréal, Toyota, and Home Depot are all making a debut.

The question is, will this new approach from Gartner encourage companies in developing their supply chain strategies?

 

 Gartner Top 25 supply chains
(last year’s rank in brackets)

1 Amazon (3)

2 McDonald’s (2)

3 Unilever (4)

4 Intel (8)

5 Inditex (11)

6 Cisco Systems (7)

7 H&M (13)

8 Samsung Electronics (6)

9 Colgate-Palmolive (9)

10 Nike (12)

11 Coca-Cola (10)

12 Starbucks (17)

13 Walmart (14)

14 3M (18)

15 PepsiCo (15)

16 Seagate Technology (20)

17 Nestlé (25)

18 Lenovo Group (16)

19 Qualcomm (19)

20 Kimberly-Clark (21)

21 Johnson & Johnson (22)

22 L’Oréal (-)

23 Cummins ((24)

24 Toyota Motor (-)

25 Home Depot (-)

Source: Gartner (click here for more information)

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