Now in its fourth year, Supply Chain Insights analyzes levels of supply chain performance and improvement for all retail, manufacturing and distribution peer group. The goal of this work is threefold: to help supply chain leaders set realistic supply chain goals; provide industry benchmarks for gauging progress; and recognize companies achieving higher levels of supply chain excellence. Here we share the results of winners and background on the analysis.
he Supply Chain Top 25 is the preeminent ranking of supply chain leaders. The ranking is comprised of two main components: a quantitative measurement of business performance and a qualitative representation of both peer and Gartner analyst opinions. These two components are combined into a total composite score which ultimately determines the ranking. The ranking is revealed each year at the Gartner Supply Chain Executive Conference.
Company List
Each year we determine the companies to include in the Supply Chain Top 25 study by starting with the combined Fortune Global 500 and Forbes Global 2000 lists. In an effort to have a manageable number of companies in the study, a $12 billion minimum revenue threshold is applied. We also remove companies that do not have supply chains for physical products or whose supply chains have unique characteristics that distort the financial metrics used in the ranking. Finally, we eliminate companies who do not have up-to-date publically available financial data. The final list typically consists of approximately 300 companies.
Business Data
The quantitative part of the Supply Chain Top 25 is comprised of three financial metrics and a corporate social responsibility metric which are combined to create a weighted average score. This score represents 50% of a company's total composite score. Below is the list of metrics used and how they're calculated. All financial data is taken from each company's annual report:
Return on assets (ROA) — Net income / total assets
Inventory turns — Cost of goods sold / inventory
Revenue growth — Change in revenue from prior year
Corporate social responsibility — Index of third-party CSR measures
We use a three-year weighted average for the ROA and revenue growth metrics. The yearly weightings are as follows: 50% for the most recent year, 30% for the second year and 20% for the third year. For inventory, we use a one-year quarterly average calculation.
The Corporate Social Responsibility (CSR) component score assesses each company's commitment to and proficiency in running socially and environmentally responsible supply chains. Using trusted third-party sources, points are awarded if companies produce publicly-available sustainability reports using accepted standards and if certain expert third parties recognize their exceptional performance in social and environmental responsibility.