When the Supply Chain Top 25 was first introduced in 2004, the world looked very different, as did the role of the supply chain. “Shrek 2” and “Spiderman 2” dominated the movies, “flash mob” was added to the Oxford English Dictionary, and “You’re fired” became a popular catchphrase.
While not hearing, “You’re fired,” in 2019 is still important, today’s supply chains must be more resilient and responsive than ever before.
Today’s supply chain leaders recognize we are entering a new era of supply chains where companies physical and digital supply chains converge. The accelerating rate of technology development, adoption and digital innovation offers game-changing opportunities for supply chains prepared to harness and scale them. Companies reflected in the Supply Chain Top 25 are transforming business models and redefining markets by blending well-established capabilities with emerging digital innovation. These leading companies have embraced three key principles:
- Shift from integrating supply chain functions to participating in digital ecosystems.
Top-performing supply chains have high levels of integration across the physical supply chain. This was supported with integration capabilities like systems and process alignment, consolidation of physical networks, and internal and external collaboration. Leading supply chains are building upon this foundation to orchestrate business ecosystems. A business ecosystem is a dynamic network of entities (people, businesses and things) interacting with each other to create and exchange sustainable value for participants.
- Move from traditional automation of processes to an autonomous supply chain in which systems increasingly make decisions.
Automation of processes has been a characteristic of supply chain for decades. With the introduction and pervasiveness of artificial intelligence (AI), supply chains can introduce autonomous processes into their functions. These tools give sovereignty to systems to make decisions and take actions that traditionally had been the responsibility of humans. As we move toward a more autonomous way of working, supply chains will need to create strategies to get their human resources to adapt to a way of working that includes autonomous processes.
- Move the focus from optimizing functional capabilities to an aptitude of digital business synchronization. (See Figure 1.)
Optimization of overall supply chain performance has always been a reactive and exploratory process. Mastering core concepts and capabilities have made aspects of supply chains more effective over the years, including some cross-functional processes. With synchronization, the optimized domain results are combined to determine if what is being executed is optimized from a full end-to-end perspective.
Gartner analysts are often asked what does a good supply chain look like or who are supply chain leaders? The Gartner Supply Chain Top 25 is a good place to start. Two key aspects of the Supply Chain Top 25 ranking are the demonstration of demand-driven leadership and corporate social responsibility (CSR). We’ve been researching and writing about demand-driven practices since 2003, highlighting the journey companies are taking — from inward-focused supply management functions to supply chains that orchestrate a profitable response to demand. Beyond profit, these companies focus on people and protecting the planet. We reflect this aspect of leadership through a quantitative CSR measure (10% of the scoring), first added to our methodology in 2016.
We continue to invest in this supply chain leadership research to foster the enablement and sharing of best practices as a way to raise the bar of performance for everyone in supply chain management. Another objective of the Supply Chain Top 25 is to highlight and elevate the importance of the supply chain function and profession across our community, within corporate boardrooms and for the investment community at large.
Congratulations to the Gartner 2019 Supply Chain Top 25 and Masters!
All of the companies making this year’s Supply Chain Top 25 and our five longtime leaders (AKA “Masters”) have worked hard to incorporate these strategic shifts. More information on the Top 25 can be found on Gartner’s public website.
Congratulations on continued supply chain leadership and providing inspiration for all of us.
Mike Griswold, VP Analyst, Gartner Supply Chain