Apple tops global supply chain top 25

The Supply Chain Top 25 research initiative is designed to raise awareness of supply chain discipline and how it impacts the business. Rankings comprise two main components: financial and opinion. Public financial data gives a view into how companies have performed in the past, while the opinion component provides an eye to future potential and reflects future expected leadership. The two components are combined into a total composite score. Debra Hofman, research vice president at Gartner, said: "The old image of a supply chain organisation limited to either inbound materials management or logistics, with procurement, planning, manufacturing, and customer service as totally separate functions, is fading. What's replacing it is a supply chain organisation, often reporting at the board level, that includes the functions of plan, source, make and deliver. It also increasingly includes functions such as customer service and new product launch, and links them through the cross functional processes and roles that are so critical to being demand driven. The consumer oriented companies, with their need to renew product lines constantly and their appetite for downstream data, have led the way in this change, which may at least partially explain the steady drift away from industrial companies making the list." Gartner analysts said they see companies such as Samsung, which have always been vertically integrated, weathering the ups and downs through ownership of supply. Companies such as Microsoft and Cisco are managing an extensively outsourced network of trading partners. "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," Hofman said. "The leaders have been moving steadily up the demand driven maturity curve over the last several years," Hofman said. "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." Notes: 1. Gartner Opinion and Peer Opinion: Based on each panel's forced-rank ordering against the definition of "DDVN Orchestrator" 2. Return on Assets (ROA): ((2010 net income / 2010 total assets) * 50%) + ((2009 net income / 2009 total assets) * 30%) + ((2008 net income / 2008 total assets) * 20%) 3. Inventory Turns: 2010 cost of goods sold / 2010 quarterly average inventory 4. Revenue Growth: ((change in revenue 2010-2009) * 50%) + ((change in revenue 2009-2008) * 30%) + ((change in revenue 2008-2007) * 20%) 5. Composite Score: (peer opinion * 25%) + (Gartner opinion*25%) + (ROA*25%) + (inventory turns * 15%) + (revenue growth * 10%) 2010 data was used where available. Where 2010 data was unavailable, latest available full-year data was used. All raw data was normalized to a 10-point scale prior to composite calculation. Source: Gartner (June 2011)