Gartner Announces Rankings of the 2020 Supply Chain Top 25
Cisco Systems Takes Top Position; Six New Companies Join Ranking
Cisco Systems scored the top spot in the ranking, followed by Colgate-Palmolive, Johnson & Johnson, Schneider Electric and Nestlé (see Table 1). Six new companies joined this year’s list: Lenovo, AbbVie, British American Tobacco, Reckitt Benckiser, Biogen and Kimberly Clark.
“Cisco’s revenue growth, strength in environment, social and corporate governance (ESG) and recognition of leadership in community opinion polls drove the move up from the fifth position in 2019 to the top spot today,” said Mr. Griswold. “Its ESG focus includes the circular economy, with the goal of having 100% of new Cisco products incorporate circular design principles by the financial year 2025.”
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 years’ Masters – Amazon, Apple, P&G, McDonald’s, and Unilever – qualified for the category this year. “The Masters continue to demonstrate advanced lessons for the supply chain community,” Mr. Griswold added. “The Supply Chain Top 25 offer a platform for insights, learning, debate and contributions to the rising influence of supply chain practices on the global economy.”
Table 1. The Gartner Supply Chain Top 25 for 2020
Year Weighted ROPA2
Year Weighted Revenue Growth4
|ESG Component Score5
|3||Johnson & Johnson||885||454||77.6%||3.0||3.6%||8.00||4.65|
|13||Coca Cola Company||1195||207||75.4%||4.4||0.0%||6.00||3.74|
|21||British American Tobacco||154||56||85.6%||0.7||18.1%||9.00||2.90|
1. Gartner Opinion and Peer Opinion: Based on each panel’s forced-rank ordering against the definition of “DDVN Orchestrator”.
2. ROPA: ((2019 operating income) / (2019 Net property, plant equipment + year end inventory)) *50%) + ((2018 operating income) / (2018 Net property, plant equipment + year end inventory)) *30%) + ((2017 operating income) / (2017 Net property, plant equipment + year end inventory)) *20%).
3. Inventory Turns: 2019 cost of goods sold / 2019 quarterly average inventory.
4. Revenue Growth: ((change in revenue 2019-2018) *50%) + ((change in revenue 2018-2017) *30%) + ((change in revenue 2017-2016) *20%).
5. ESG Component Score: Index of third-party environmental, social and governance measures of commitment, transparency and performance.
6. Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROPA*20%) + (Inventory Turns*5%) + (Revenue Growth*10%) + (ESG Component Score*15%).
2019 data used where available. Where unavailable, latest available full-year data used. All raw data normalized to a 10-point scale prior to composite calculation. “Ranks” for tied composite scores are determined using next decimal point comparison.
Source: Gartner (May 2020)
Three key trends stand out this year for the supply chain leaders that are accelerating their capabilities, separating them further from the rest of the pack:
Supply chain teams at leading companies define their work using the language of purpose. They have recognized that solving the world’s largest problems only works through partnership with others in the broader community, as well as through their own radical transparency.
“In the time of COVID-19, it has been a marvel to witness the strength and creativity of the supply chain community in keeping our society fed, supplied and healthy,” Mr. Griswold said. “For example, we’ve seen apparel companies manufacturing personal protective equipment and airlines converting dormant warehouses into food processing centers. Those shifts would normally have taken months or quarters to plan and execute. However, purpose- driven supply chain talent managed to shorten these timeframes to a couple of weeks.
Business Model Transformers
One of the largest external forces impacting corporate supply chains is a dynamic competitive landscape driven by a combination of expanded customer expectations, new market entrants from existing industry ecosystems, and the emergence of non-traditional competitors. Leading supply chain organizations have learned to thrive in that environment and positioned themselves as disruptors – either through reinvention of their offerings and the ability to deliver them or by acquiring start-ups that offer the expertise to compete in new and reinvented markets.
Leading companies on the Supply Chain Top 25 are early and frequent adopters of digital technologies. More importantly, these investments enable business capabilities and outcomes that allow them to thrive in even the harshest economic conditions.
“In the current environment, the natural tendency of many companies is to pull back spending, including money tied to transformational programs. Advanced supply chains are pressing forward, and in some cases, accelerating investments in real-time visibility, planning and agile supply execution capabilities that are well-suited for supporting uncertain demand mixes and volumes,” Mr. Griswold concluded.
About the Gartner Supply Chain Top 25
The Supply Chain Top 25 ranking comprises two main components: business performance and opinion. Business performance in the form of public financial and ESG (environmental, social, governance) 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.
Gartner analysts derive a list of companies from a combination of the Fortune Global 500 and the Forbes Global 2000. In an effort to maintain the list of companies evaluated at a manageable level, a general annual revenue threshold of $12 billion has been applied.
About the Gartner Supply Chain Practice
The Gartner Supply Chain Practice brings together the most relevant analysis, peer-based best practices, metrics and data across Gartner and offers supply chain leaders a platform to make the choices that will drive their business forward. Additional information is available at https://www.gartner.com/en/supply-chain. Follow news and update from the Gartner Supply Chain Practice on Twitter and LinkedIn using #GartnerSC.
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