How to be top

I’ve heard it said that Apple knows more about what is going on in its competitors’ supply chains than the competitors do themselves. Just hyperbole? Probably. What is true is that Apple has come out top in the Gartner Top 25 supply chain listing for the third year in a row – and by a big margin.

But, perhaps more surprising is the dramatic rise up the list by Amazon and McDonalds, which have muscled aside last year’s high flyers – Dell and Procter & Gamble.

And there were strong performances from Coca Cola, Intel and Unilever, which have all risen significantly since 2010.

In contrast, PepsiCo, Samsung and Wal-Mart have all fallen down the listing over the past three years.

And some major organisations have fallen out of the Top 25 altogether, including Microsoft, IBM and Tesco.

Each company’s score is based on five elements: peer opinion, Gartner’s opinion, and return on assets each account for 25 per cent of the score, while inventory turns accounts for 15 per cent and revenue growth accounts for 10 per cent.

And these figure turn up some surprising findings. For example, fast fashion specialist Inditex scored a lowly 4 for inventory turns – significantly less that diesel engine manufacturer Cummins.

Procter & Gamble has a mighty reputation for the quality of its supply chain. This year, Unilever beat P&G on return on assets, inventory turns and revenue growth, but came out lower in both the opinion of peers and of Gartner.

And Nike rose from 20th in 2011 to 14th in the latest survey despite the fact that both inventory turns and revenue growth fell. Return on assets was marginally up at 13.3 per cent but the big difference came in peer opinion where its score went up from 781 to 1073.

It’s also worth considering which companies didn’t make it into the Top 25 list. The list is dominated by consumer-focused manufacturers and retailers.

Motor manufacturing is largely absent from the Top 25 –Cummins and Caterpillar are the only representatives of traditional manufacturing. And surprisingly, the pharmaceutical sector is not a strong player in the list.

What about next year? No one is going to bet against Apple taking the top slot again. But can more European companies challenge the US dominance of the list – and what about  the emerging markets of the Far East?

Gartner Supply Chain Top 25 for 2012