US firms dominate list of globe's best supply chain companies

06 June 2018 Authored by Consulting.us

Research firm Gartner has released its 2018 Supply Chain Top 25 ranking. McDonald’s joined Amazon, Apple, and Procter & Gamble in the ‘Masters’ level of supply chain excellence, while US firms accounted for just under half of the Top 25-rated companies.

Effective supply chains are a critical element in the operations of successful businesses. Efficiently and effectively sourcing raw materials, while getting the right products to the right places on-time and cost effectively can give companies a huge advantage over rivals. Neglecting supply chain issues, on the other hand, can quickly sink a business. In the case of US retailer Target’s failed expansion into Canada, a dysfunctional supply chain and inventory system – which led to bare shelves and frequently incorrect shipments – contributed to Target Canada’s shuttering of operations after barely two years.

Gartner’s ‘Supply Chain Top 25,’ however, ranks the companies with the best supply chain management in the world. US companies dominated the Top 25 ranking, and continue to have a monopoly on the research and advisory firm’s supply chain ‘Masters’ category – which recognizes sustained leadership over the past decade. The 2018 edition is the 14th year that Gartner has released the Top 25 ranking.

"Looking back at 2017, we experienced a year of healthy growth, despite heated trade rhetoric," remarked Stan Aronow, research vice president at Gartner. "Now, in 2018, protectionism is spreading in response to announced moves by the U.S. and the U.K., among others. This has led many organizations to re-evaluate the location strategy for their supply networks. We also see strong growth constraining available supply in many geographies, increasing the cost of logistics and labor. The most advanced supply chains are proactively managing these risks and continue to post solid performances."

The 20 companies with the best supply chain and logistics practices

While Dutch consumer goods company Unilever snagged the top spot for the third year in a row, the rest of the top ten was dominated by US firms – with Cisco, Colgate-Palmolive, Intel, Nike, PepsiCo, and Starbucks among the ten best supply chain-leveraging companies. HP, Johnson & Johnson, Walmart, Kimberly-Clark, Coca Cola, and Home Depot were the other US firms that made it into the Supply Chain Top 25. Altogether, US companies made up just under half of the firms in the prestigious ranking.

Further, American restaurant chain McDonald’s was inducted into Gartner’s ‘Masters’ category, which recognizes a firm’s supply chain excellence over the past decade. McDonald’s joins fellow US companies Apple, Amazon, and Procter & Gamble in the gilded and, as yet, wholly American grouping. The category was put together in 2015 because the aforementioned firms were consistently the top ranking firms in the analysis; as such, they were simply graduated to a different tier of god-like supply chain mastery.

"The key to McDonald's success is skillful orchestration across a network of strategic suppliers, service providers and thousands of companies and franchise-owned stores worldwide," commented Aronow. "The company is also experimenting with digital supply chain capabilities like augmented reality to manage storerooms, so staff can spend more time with the customer.”

Aronow notes that the top firms are investing in the digitization of their supply chains, enhancing, for example, processes like order-to-cash with robotic process automation (RPA). The custom software, which can do repetitive tasks more quickly, cheaply, and accurately than humans, is being rolled out across pioneering firms in order streamline processes. McKinsey & Co say that effective RPA implementation can have a return-on-investment of 30-200% in the first year alone.

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