Gartner’s annual Supply Chain Top 25 report helps to raise awareness of the supply chain discipline and how it impacts business. The identification of the leaders, based on financial performance and opinion, highlights best practices from which others can learn.
Leaders took some very clear lessons from the events of the past couple years, with one of them being the need for supply chain resilience: the ability to deliver predictable results, despite the volatility that many have pointed out is now here to stay. Speed, agility, efficiency, responsiveness, and innovation: all remain critical, but equally important is a resilient supply chain. Companies like Cisco, Dow Chemical, RIM, Unilever, and others are actively designing in structures, processes, and methodologies to create and expand this resiliency not only in their own supply chains, but in those of their trading partners as well.
- The Top 5 include three mainstays: Apple, Dell, and P&G, and two that joined the list for the first time last year: Research In Motion (RIM) and Amazon.
- Four new companies joined the list this year: Nestle, Starbucks, 3M, and Kraft Foods.
- Four key themes emerged this year among the leaders, including how they deal with volatility, their approaches to value chain network integration, their focus on sustainable execution, and their abilities to orchestrate.
- Develop supply chain processes and methodologies throughout your trading partner network that will provide the resiliency to deliver predictable results in the face of ongoing volatility.
- Supplement a clearly articulated, long-term value chain vision with strong, agile, and sustainable execution capabilities. Push your team to think differently and go beyond conventional wisdom to push the boundaries on performance levels.
- Measure your supply chain as your customers experience it. Develop the capability to internalize customer needs, and proactively build customer feedback into your supply chain design.
- Step back and consider the basic supply chain capabilities you need, as well as the innovations that will differentiate your performance. Ensure the sustainability of your efforts and initiatives through a constant focus on governance, change management and culture.
Four Overall Themes Emerged from the Research:
First, of course, is the impact of the recovering economy. Companies are starting to invest again in resources and assets, and although the economy is not yet fully recovered, the trend is certainly looking up. At the same time, leaders took some very clear lessons from the events of the past couple years, with one of them being the need for supply chain resilience: the ability to deliver predictable results, despite the volatility that many have pointed out is now here to stay. Speed, agility, efficiency, responsiveness, and innovation: all remain critical, but equally important is a resilient supply chain. Companies like Cisco, Dow Chemical, RIM, Unilever, and others are actively designing in structures, processes, and methodologies to create and expand this resiliency not only in their own supply chains, but in those of their trading partners as well.
2. Value Chain Network Integration
Rather than traditional vertical integration, leaders are focusing on the right set of value chain network integration strategies that allow better control of the end-to-end value chain. What this means is that there’s no one answer that’s always right. The key isn’t whether a company owns all the pieces of its network, it’s how well it controls the outcome of the activities that take place in the network that end in the delivery of a final product to a customer. As such, each company needs to figure out the right strategy for sustainable differentiation given its unique business goals, and design the tactics and processes that will best ensure the quality and efficiency of the end-to-end output and response to the end customer.
3. Vision and Sustainable Execution
Leaders are setting their sights beyond the articulation of a clear vision to the need for sustainable execution against that vision. These companies understand that, although a long-term supply chain vision is critical to communicate future value, the ability to replicate, scale, and continually build on best practices across the organization in a sustainable way, going beyond a one-time success or pockets of excellence, is just as critical. This is no small task given the size, complexity and sheer scale of many of the Top 25 leaders. It often requires fundamental shifts in organization and governance, as well as an unshakeable commitment to effective change management.
Leaders have been moving steadily up the demand-driven maturity curve over the last several years. What differentiates the companies that are true “orchestrators” is that they go beyond simply borrowing and adapting others’ best practices. They create new ones altogether, often defying “conventional wisdom” to rewrite the rules and increase the gap between themselves and others.
With seven years of data and discussion behind it, the 2011 Supply Chain Top 25 continues to offer lessons about staying power, change, and the never-ending challenge of defining and measuring excellence.
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