Gartner announces ranking of top European supply chain organisations for 2016

Send to friend

Gartner, Inc., revealed its 2016 ranking of the top 15 supply chain organisations based in Europe at its annual Supply Chain Executive Conference, held from 19-20 September in London.

"In this year's edition, four of the top five European supply chain organisations from 2015 (see Table 1) remained in the top five. H&M and Inditex switched places at No. 2 and No. 3, respectively and Schneider Electric made its debut in the European top five," said Stan Aronow, research vice president at Gartner. "Three new companies also made the supply chain top 15 ranking in Europe this year, with Bayer joining the list for the first time and Nokia and Ahold Delhaize rejoining after several years."

This year, Unilever not only maintained the No. 1 spot in the European supply chain ranking, but also ranked No. 1 globally. Unilever has made supply chain a true partner to the business in delivering its broader Unilever Sustainable Living Plan, with the aim of doubling revenue and halving its environmental impact by 2020. H&M climbed one place to gain the No. 2 European ranking this year, reflecting a strong record in sustainability and workers' rights, as it quickly grows its business.

Uncertainty in Europe exists and has increased since the UK's decision to leave the European Union. "More than ever, leading organisations in Europe will need to optimise their supply chain functions and embrace bi-modal capabilities in order to drive growth and remain competitive in new markets," said Aronow. "They will also need to deliver strategies that add real value to consumers, be mindful of new competitors capitalising on this period of uncertainty, and incorporate corporate social responsibility (CSR) goals into their supply chain strategy and operations."

Table 1. Gartner Supply Chain Top 15 in Europe for 2016

Rank
Company
Return on Assets (ROA)1
Inventory Turns2
Revenue Growth3
CSR Component Score4
Composite Score5
1 Unilever
10.8%
6.9
3.6%
10.00
5.84
2 H&M
25.3%
3.5
16.3%
9.00
4.50
3 Inditex
16.7%
3.9
11.2%
9.00
4.42
4 Nestlé
8.9%
5.2
-1.1%
10.00
3.68
5 Schneider Electric
4.3%
5.1
4.9%
10.00
2.80
6 L'Oréal
11.4%
3.0
7.0%
4.00
2.70
7 BASF
6.5%
5.0
-2.0%
10.00
2.70
8 BMW
3.8%
6.0
8.8%
10.00
2.61
9 GlaxoSmithKline
12.6%
1.9
-1.9%
9.00
2.51
10 Nokia
10.3%
5.7
-0.5%
10.00
2.25
11 Reckitt Benckiser
14.3%
5.2
-1.8%
9.00
2.22
12 Diageo
9.7%
1.0
1.2%
5.00
2.18
13 British American Tobacco
14.2%
0.8
-5.5%
8.00
2.10
14 Ahold Delhaize
7.3%
17.0
8.4%
8.00
1.95
15 Bayer
5.5%
2.4
7.1%
10.00
1.92

Notes:

  • 1 ROA:  ((2015 net income / 2015 total assets)*50%) + ((2014 net income / 2014 total assets)*30%) + (2013 net income / 2013 total assets)*20%)
  • 2 Inventory Turns:  2015 cost of goods sold / 2015 quarterly average inventory
  • 3 Revenue Growth:  ((change in revenue 2015-2014) *50%) + ((change in revenue 2014-2013) *30%) + ((change in revenue 2013-2012) *20%)
  • 4CSR Component Score: Index of third-party corporate social responsibility measures of commitment, transparency and performance.
  • 5 Composite Score:  (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROA*20%) + (Inventory Turns*10%) + (Revenue Growth*10%) + (CSR Component Score*10%)

Source: Gartner (September 2016)
 
Gartner has outlined below some of the common challenges and key supply chain capabilities of this year's leading European supply chain organisations:

A Growing Emphasis on Corporate Social Responsibility

This year, for the first time, Gartner included a CSR score in order to highlight CSR excellence within Europe's top supply chains, with seven of the top 15 European companies scoring a maximum of 10 and four more scoring nine of out of 10.
 
"The emphasis on CSR is not only driven by investors, but also by consumers, employees and the general public, all of whom expect businesses to run socially responsible supply chains and for their methods and results to be made public," said Aronow.

Increased Adoption of Advanced Analytics

The use of predictive and prescriptive analytics is becoming more prevalent within leading European organisations across all sectors. For example, Nestlé uses predictive analytic algorithms to support its global engineering process flows and expand its supply chain. BASF is developing a single platform supply chain control tower, applying advanced prescriptive analytics to remove silos in its supply chain and create a value-based supply chain ecosystem.

Digital Business and Innovation Increasingly Featured

Digital business is increasingly featured as part of the capabilities of leading supply chains. Companies such as Unilever are spending a substantial proportion of their marketing activities on digital, and the supply chain is being reconfigured to leverage digital opportunities. Schneider Electric receives more than 70 per cent of its orders digitally, which substantially reduces order processing time.

Supply chain innovation is no longer used just to make supply chain more efficient, but also to drive a new level of competitive advantage for leading organisations. For example, L'Oréal uses its supply chain technology and analytics to monitor the safety of its ingredients, thereby reducing the need for product testing on animals; also, H&M has a supply chain designed to move a garment from design to the hanger within 20 days.

Comments (0)

Add a Comment

This thread has been closed from taking new comments.