DRAFT

The Majority of Gartner Supply

Chain Top 25 for 2014
Companies Have Designed
with LLamasoft.
Do You?
Model, Analyze and Optimize
the End-to-End Supply Chain

Contents
2

Welcome

Model, Analyze and Optimize the End-to-End

Supply Chain

Why Choose LLamasoft?

From the Gartner Files:

The Gartner Supply Chain Top 25 for 2014

22 About LLamasoft

Featuring research from

2
Welcome
We began our
partnership with
LLamasoft on Supply
Chain Guru 2.0 in 2003
and are still an active
customer at version
8.0. The reasons we
chose LLamasoft back
then are the same
reasons we continue
our relationship today:
LLamasoft offers the
most innovative supply
chain design technology
and the people we work
with are knowledgeable
and dedicated to
customer success.
Ettore Piccirillo, Group CSE
Director, Unilever

Over half of the global companies recognized as part of the Gartner Supply Chain Top 25 for 2014 have
designed supply chains using LLamasoft supply chain modeling solutions. The annual Supply Chain Top
25 report identifies the companies that best demonstrate leadership in applying demand-driven principles
to drive business results. Fourteen of the 25 companies listed in the 2014 report have utilized LLamasoft
supply chain modeling software. 2014 is the fourth year running in which 50 percent or more of the 25
companies have had supply chain design projects supported by LLamasoft.
At LLamasoft, we believe its no accident that this trusted and authoritative report in large part mirrors the list
of companies that have utilized LLamasoft technology to design better supply chains.

Companies included in Gartner Supply Chain Top 25 for 2014

Apple

McDonalds

Amazon

Unilever

P&G

Samsung Electronics

Cisco Systems

Intel

Colgate-Palmolive

The Coca-Cola Co.

Inditex

Nike

H&M

Walmart

PepsiCo

Lenovo Group

Starbucks

3M

Qualcomm

Seagate Technology

Kimberly-Clark

Johnson&Johnson

DRAFT
Caterpillar

Cummins

Nestle

Model, Analyze and Optimize the End-to-End

Supply Chain
Design alternatives
and explore the
trade-offs associated
with change. Then
test results under
real-world conditions
using simulation.

LLamasoft provides the technology and

expertise to help companies visualize,
optimize and simulate the supply chain
for major improvements in cost, service,
sustainability and risk mitigation. Design
alternatives and explore the trade-offs
associated with change. Test results under
real-world conditions using simulation.
With LLamasoft you can do it all in a single,
integrated software platform.
LLamasoft Enables Companies to:
Visualize and Optimize the End-to-End Supply
Chain
Supply Chain Guru design software offers
multiple options for finding hidden inefficiencies
in the supply chain. Models contain SKU-level
detail, run across multiple time periods and

Service-area mapping precisely displays

service distance to various geographic regions
using shaded areas bounded by actual streetlevel details

3
incorporate transportation and sourcing costs and policies, network structure, inventory, service level
and operational details.
Right-Size Inventory Levels
Analyze and properly categorize demand, factor all aspects of inventory for both existing and new supply
chain structures and simulate real-world behavior to enable true what-if capabilities. The result is a
prescription for the right levels of working capital across your business.
Optimize Product Flow
Analyze how SKU-level products flow along transportation lanes, through distribution centers and on
to customers. Determine which products should be shipped via air, rail or truck and the appropriate
distribution path to meet service levels while minimizing transportation costs.
Create Optimal Transportation
Networks
Transportation Guru enables designers
to model entire supply chain networks,
incorporating alternate transportation
options and key variables such as cost,
time, capacity and delivery parameters.
Identify optimal mode mix and most
efficient multi-stop vehicle routes while
optimizing fleet size. Routes can include
pick-ups and deliveries interleaved
throughout to minimize costs.

DRAFT

Streamline Sales and Operations

(S&OP) Planning

Transportation route optimization reduces

overall route cost by minimizing the time and
distance trucks are driven empty

Using Supply Chain Guru as the planning

and optimization engine, S&OP can
become a key driver for optimizing
resource utilization and maximizing
return on assets.
Analyze Cost-to-Serve
Model all supply chain activities and
costs incurred to fulfill customer demand
for cost-to-serve and margin-to-serve
insight at the customer SKU level for
both existing and alternative networks.
Reduce Risk
Identify alternate sources, routes,
transportation modes or production
processes that may be required due
to planned or unplanned supply chain
disruptions. Integrated simulation
identifies physical and financial risks or
rewards of various network scenarios.

Network optimization model output graphic showing

customer flows, colored by source

Source: Llamasoft

Identify alternate
sources, routes,
transportation
modes or production
processes that may
be required due to
planned or unplanned
supply chain
disruptions.

4
Why Choose LLamasoft?
Unmatched design technology and the expertise to back it up
Applying modeling and optimization to supply chain design problems for more than 10 years
Pure-play supply chain design solutions company
Over 500 supply chain design projects completed across industries:
Consumer Goods
Automotive
Footwear/Apparel

Retail
Chemical
Defense

High Tech
Manufacturing
Public Health

Oil and Gas

Food and Beverage

Logistics/3PL
Grocery

More than 70 experienced solutions consultants available worldwide

DRAFT
LLamasoft solutions consultants offer expertise in:

Network Optimization
Inventory Optimization
Transportation Network Design Statistics

Simulation
Analytics and Data Management

Continuous Improvement; Above-Average Investment

LLamasoft invests greater than 30% of annual revenue in research and development, enabling
continuous technology innovation.
40% of LLamasoft employees are solutions and development focused, making our customers success
top priority.

5
From the Gartner Files:

The Gartner Supply Chain Top 25 for 2014

This research unveils the 10th annual global
Supply Chain Top 25, identifying global supply
chain leaders and highlighting their best practices.
Key Findings
The top five include four from last year Apple,
McDonalds, Amazon and Unilever plus
another familiar leader, P&G.
Two new companies joined the list this year:
Seagate for the first time and Kimberly-Clark
after a years hiatus.
Three key trends emerged among the leaders:
deeper contextual understanding of customers,
leveraging digital business as part of broader
customer solutions and supply chain leading
balanced growth.
Recommendations

Weve been researching and writing about

demand-driven practices since 2003, highlighting
the journey companies are taking from insular
supply management functions to supply chains
that orchestrate a profitable response to volatile
demand.
One of our goals is to foster the celebration and
sharing of best practices as a way to raise the bar
of performance for everyone. Another objective
of the Supply Chain Top 25 is to shine a light
on the importance of supply chain within
our community certainly, but also for corporate
executives outside of supply chain and the
investment community, at large.

The Notable Trends

Each year, our analysts research the supply chains
of hundreds of companies. Through this work, we
note the trends: What are the leaders focusing on,
where are they investing time and effort, and what
can be applied broadly? Three key trends stand out
this year for these leaders that are accelerating
their capabilities and separating from the rest of
the pack.

DRAFT

Partner with sales and marketing to observe

customers and understand their supply
chain requirements in the context of the
environments where they buy and use your
products and solutions.

Establish and expand supply chains influence

in cross-organizational governance bodies
steering product life cycle management (PLM),
integrated business planning and corporate
social responsibility (CSR).
Help guide your customers toward a
subscription/replenishment model for your
product and supply chain solutions to lock in
demand and streamline value chains.

Understanding and Supporting the Fully

Contextualized Customer
An enduring trait of leading companies is that
customer needs and behaviors serve as the starting
point for go-to-market and operational support
strategies. The very best of them present simple,
elegant solutions to their customers, driven by
conscious supply chain orchestration behind
the curtain. Their center-led cultures enable
consistently high quality customer experiences,
tailored where important, to local tastes.

Analysis
2014 marks the 10th year of our annual Supply
Chain Top 25 ranking. In celebration of this
milestone, we have several longtime leaders with
new lessons to share and a number of more recent
entrants from the high-tech, consumer products
(CP) and industrial sectors.
A key aspect of the Supply Chain Top 25 ranking
is the demonstration of demand-driven leadership.

Listening to supply chain leaders over the

past year, we heard them expand the demanddriven concept in terms of how they relate to
their customers. It is now about understanding
customers in a deeper way and blending
seamlessly into their daily routines. Over the past
few years, there has been a lot of press on the
insights to be gleaned from big data sourced from
point of sale (POS) transactions, online searches,

6
ordering activities and assets in service. Leading
companies go beyond just tracing correlations
in operational data, however. They study the
environments this activity occurs in to parse out
the contextual reasons behind local behaviors that
appear quirky when viewed from a distance.
Consider a high-tech leader that hired an
anthropologist to go out in the field of emerging
markets to understand how they consider and
relate to consumer electronics. Observing people
in their natural environments led to products better
able to perform where there is a lot of dust in the
air or where power supplies are unreliable. It also
revealed that enough new mobile phone buyers in
China will wait for a traditionally believed good
number, such as one with a lot of 8s, to create
spikes in consumption around the times that new
batches of those numbers are available.
In another instance, a CP company decided to
sell daily-sized soap sachets in emerging markets
to better fit household budgets. These products
are delivered in a just-in-time (JIT) fashion to
local retailers, reflecting those buyers cash-flow
constraints. In mature markets, this leader uses
simulated store environments to better understand
how customers move through shopping aisles and
make buying decisions, based on product displays.
It also models the buying patterns of retail
partners and looks for opportunities where value
can be obtained and shared by improving on-shelf
availability and moving toward less-complex order
and delivery methods.

Regardless of industry, these companies want their

customers to be loyal subscribers to their solutions.
Several of the leading CP companies on this years
list are offering e-commerce subscriptions for their
products, in partnership with retailers, to create a
seamless multichannel experience. This approach
offers convenience and privacy to end customers
that would normally buy these products in a physical
store and might switch to another consumer brand
during any given store shopping visit.
The more progressive industrial companies that we
heard from this year had instituted suggested order
replenishment systems with their dealer networks,
based on a superior ability of the manufacturer
to forecast demand for their dealer. Some went
further and are now acting as virtual consultants
to their customers planning organizations. They
recognize that helping improve customers internal
capabilities is part of a total solution, making them
more competitive suppliers.
Another significant aspect of the total customer
solutions we see deployed by leaders relates to
the remote management of aftermarket services,
leveraging Internet connectivity. The Internet of
Things (IoT) allows for monitoring of performance
across the value chain and in the field at customer
sites, but also to collect and analyze the big data
generated as part of upstream manufacturing
and logistics flows. This additional connectivity
has also elevated the importance of supply chain
security to prevent theft, counterfeiting and other
forms of fraud.

DRAFT

Ultimately, a deeper understanding of customers

in their local environments helps supply chain
leaders capture more revenue for their businesses
and improve operational effectiveness.

One thing is clear: Future supply chains must

seamlessly integrate the digital and physical
worlds of customers to be competitive.
Supply Chain as Trusted and Integrated Partner

A Convergence of Digital and Physical Supply

Chains Delivering Total Customer Solutions
Leading companies have moved past only selling
discrete products or services to their customers
and are now focused on delivering solutions. In
high tech, this might mean selling a coordinated
collection of hardware, software and services to
stand up a data center for a business customer. In
consumer markets, this same company might sell
a hardware device for near break-even, recognizing
that the profit of the solution will come later
through the metered delivery of software
applications and content.

If theres one trend that came through loud and

clear in our annual CEO survey this year, it is that
the C-suite is now laser-focused on growth. A full
63% of senior executives picked growth as a top
imperative, as compared to the next most popular
area, cost management, at 25%. Leading supply
chains are enabling this growth, both organically
and through successful M&A integration. At the
same time, were seeing true supply chain leaders
emerge as trusted and integrated partners to
business groups. Their focus on profitable growth
often leads to smarter, more conscious decision
making, saving business groups from spiraling out

7
of control in the drive to maximize revenue. Supply
chains influence over which products will be sold
and what customer service levels will be supported
is akin to the checks and balances built between
the branches of a democratic government.

tremendously profitable, further proving that

hardware is important, but content is king. Beyond
its chart-topping financials, the high-tech leader
again received the highest number of peer votes,
albeit, this year, in a virtual tie with Amazon.

In the quest for growth, many companies are

finding the business models they were famous
for dominating are now under attack from
competition. Supply chain has a large part to play
in enabling the business to compete for the future,
concurrent with protecting existing business. The
most advanced companies on our ranking are not
afraid to rethink the design of their global supply
networks, if that is required, for success. In some
cases, this has led to increased vertical integration
where leaders are getting into their customers
and their suppliers businesses in an attempt to
dominate value chains, redrawing the lines of
competition in the process.

Apples supply chain strategy has always centered

on orchestrating the delivery of winning customer
solutions. Historically, this was done with
complete ownership of the design and control,
but mixed ownership of the physical supply chain.
Within the past year, Apple has become more
vertically integrated through strategic acquisitions,
locking in the next set of innovations and supply
of key components, such as the Touch ID readers
used in high-end iPhones. It is also investing
more than $10 billion in manufacturing tooling
and equipment to ramp and automate production
of its latest gear, and has brought iPad/iPhone
component sourcing back in-house.

Another area we see supply chain leaders

championing is CSR. Sometimes, doing the right
thing for the environment also yields cost savings
through the elimination of waste. By contrast,
pursuing a higher standard for human rights at
suppliers in less-stringent geographies, costs more,
but is the right thing to do. In organizations where
the head of supply chain speaks passionately
and often on this topic, social responsibility has
become a mantra for the entire organization. One
benefit of this is that new and veteran supply chain
employees have become excited by the level of
impact they can have on their companies and the
world at large.

Turning to the rest of the top five, there was

a fair amount of stability from 2013 to 2014.
McDonalds landed at No. 2 again, with a threeyear weighted average return on assets (ROA) over
15% and improved year-over-year peer opinion
scores. With its massive scale, McDonalds serves
nearly 1% of the worlds population through its
supply chain, every day.

DRAFT

Deeper contextual understanding of customers,

leveraging digital business as part of broader
customer solutions and supply chain leading
balanced growth are this years most common
trends among supply chain leaders. At its 10-year
anniversary milestone, the Supply Chain Top 25
continues to offer a platform for debate, insights,
learning and contribution to the rising influence of
supply chain practices on the global economy (see
Table 1).

Inside the Numbers

The Top Five
Apple takes the No. 1 slot again, its seventh year
running. Its hard to argue with operations that
regularly generate more than $10 billion in cash
flow each quarter for existing products, while
predictably bringing the next set of innovations to
market. Apples iTunes ecosystem has also become

Over the past year, its supply chain operations

have deepened involvement in the product life
cycle to drive profitability and market share with
core menu and new product growth platforms,
such as the McCaf coffee line. McDonalds is
also highly focused on collaborative planning and
inventory management, both downstream with
the company and franchise-owned store network
and upstream with suppliers. Its supply chain
organization has focused on talent management
as a critical capability, including strong succession
planning and expanded technical and leadership
competencies.
The ever-innovative and game-changing Amazon
came in at No. 3 again this year. Consistent
with previous years, its financials were heavy
on revenue growth (27.2% three-year weighted
average), with lower profits reflecting its outsized
investments in operational technologies, new
products and customer services. In particular, its
Kindle line is expanding from tablets into phones
and TV set-top boxes. In a high-tech version
of a razor handle and blade model, Amazon
manages its physical supply chain with precision

8
Table 1. The Gartner Supply Chain Top 25 for 2014

Rank

Company

Peer
Opinion1
(188 voters)
(25%)

Gartner
Opinion1
(32
voters)
(25%)

ThreeYear
Weighted
ROA2
(25%)

Inventory
Turns3
(15%)

Three-Year
Weighted
Revenue
Growth4
(10%)

Composite
Score5

Apple

3,187

371

20.5%

69.2

31.2%

8.85

McDonalds

1,612

369

15.6%

153.0

4.0%

6.25

Amazon

3,171

510

0.8%

8.9

27.2%

6.08

Unilever

2,031

517

9.9%

6.9

2.6%

5.32

P&G

2,166

513

8.2%

5.9

2.2%

5.20

Samsung
Electronics

1,871

351

11.4%

18.1

12.7%

5.13

Cisco Systems

1,092

480

9.1%

12.3

6.3%

4.57

Intel

908

475

12.8%

4.8

3.8%

4.51

Colgate-Palmolive

891

322

17.4%

5.1

3.1%

4.22

10

The Coca Cola Co.

1,820

265

10.1%

5.3

6.2%

4.03

11

Inditex

751

259

17.7%

3.9

9.1%

3.99

12

Nike

1,192

225

14.2%

4.2

11.0%

3.89

13

H&M

690

108

26.7%

3.6

6.4%

3.83

14

Walmart

1,764

215

8.0%

7.9

3.5%

3.52

15

PepsiCo

1,000

298

8.6%

8.2

3.2%

3.37

16

Lenovo Group

808

210

3.3%

17.5

24.4%

3.14

17

Starbucks

1,044

185

8.5%

5.7

11.9%

3.06

18

3M

975

146

13.6%

4.1

4.1%

3.05

19

Qualcomm

193

56

14.1%

6.8

30.6%

2.95

20

Seagate
Technology

67

39

19.5%

12.5

8.1%

2.75

21

Kimberly-Clark

605

206

9.9%

6.1

1.6%

2.65

22

Johnson & Johnson

957

149

9.6%

2.8

5.2%

2.65

23

Caterpillar

696

245

5.4%

3.0

3.3%

2.43

24

Cummins

153

144

12.1%

5.3

6.0%

2.34

25

Nestl

1,060

99

8.3%

5.4

1.5%

2.30

DRAFT

Notes:
1. Gartner Opinion and Peer Opinion: Based on each panels forced-rank ordering against the definition of
DDVN orchestrator
2. ROA: ((2013 net income / 2013 total assets) * 50%) + ((2012 net income / 2012 total assets) * 30%) + ((2011
net income / 2011 total assets) * 20%)
3. Inventory Turns: 2013 cost of goods sold / 2013 quarterly average inventory
4. Revenue Growth: ((change in revenue 2013-2012) * 50%) + ((change in revenue 2012-2011) * 30%) +
((change in revenue 2011-2010) * 20%)
5. Composite Score: (Peer Opinion * 25%) + (Gartner Research Opinion * 25%) + (ROA * 25%) + (Inventory Turns *
15%) + (Revenue Growth * 10%)
2013 data used where available. Where unavailable, latest available full-year data used. All raw data normalized
to a 10-point scale prior to composite calculation. Ranks for tied composite scores are determined using next
decimal point comparison.
Source: Gartner (May 2014)

9
and efficiency, enabling broad adoption of its
competitively priced hardware, which acts as a
platform for software and media content sold
either discretely or through its buffet-style Prime
service.
Amazon is exploring taking over management
of the last mile of delivery to customers in some
markets. One of its more provocative proposals in
this area, which made a huge splash in the media,
is the use of unmanned aerial drones to deliver
shoebox-size packages from Amazons fulfillment
centers to customers homes within 30 minutes.
Beyond the sensational headlines, Amazon has
recognized the need to more effectively handle
the high volume of returns associated with online
buying. It has done this by rolling out a new service
allowing customers to return unwanted merchandise
using large metal lockers it has installed for
deliveries in garages, convenience stores and grocery
stores in major metropolitan areas.
CP giant Unilever held steady at No. 4 this year
after rapidly climbing nearly 50 slots since
2008. Unilevers supply chain team is one of the
more advanced at using cost-to-serve insights
to optimize its distribution network and make
profitable trade-off decisions with customers. As
part of its channel-ready supply chain program,
this leader is determining the appropriate level of
supply chain services and marketing support each
channel and customer requires to enable growth
in a profitable way. Further, its low-cost business
model allows entrance and growth in more
constrained emerging markets.

terms of the breadth of demand signals tracked and

sophistication of analytics applied. Its operations
are governed by strong processes internally and
with trading partners to maximize the ROI for R&D
through open innovation with partners, ongoing
SKU productivity analysis and the simulation of
products-to-shelf. P&G recently opened an advanced
Innovation Center in Singapore for skincare,
cosmetics and personal care products. This center
will include a pilot manufacturing plant producing
small batches of products for rapid, small-scale
consumer testing, as well as advanced prototype
packaging designs developed using leading-edge
multimaterial 3D printers.
Movers and Shakers: No. 6 Through No. 15
This section of the ranking offers an impressive
array of blue chips, with notable contributions to
the discipline of supply chain management (SCM).
Samsung jumps two slots to No. 6 this year on
strong financial performance linked to its Galaxy
line of mobile devices and the fifth-highest peer
vote total of any company in the ranking. This
high-tech juggernaut continues to run a highly
coordinated, vertically integrated supply chain
that includes critical display, touch, camera
and microprocessor component technologies,
in addition to the release, ramp and highvolume manufacturing of finished goods. After
building solid collaborative planning, forecast
and replenishment capabilities with larger, more
mature customers, Samsung has expanded its
effectiveness by including detailed sell-through
and device activation visibility in most other
channels. The Samsung supply chain team also
partners with some customers to improve forecast
accuracy by extending its forecasting expertise and
solutions to these partners.

DRAFT

Unilever continues to drive a grand vision for

sustainable growth. Under its supplier Partner to
Win program, the company recently announced
that 100% of the palm oil it buys will be traceable
to known, sustainable sources by the end 2014. In
another case, its Green Express train partnership
with Trenitalia will directly link one of its ice cream
factories and logistics hubs, taking the equivalent
of 3,500 trucks off the road every year. Unilevers
supply chain leadership team is creating a winning
formula for its internal supply chain team; its
broader network of customers, suppliers and
partners; and the supply chain community at large.
Perennial leader P&G rejoins the top five this year
at No. 5, and boasts the third-highest peer opinion
score. P&G has one of the most-mature demand
management capabilities in CP or any industry, in

Retaining the No. 7 slot this year, Cisco continues

to demonstrate its leadership in supply chain as
the company moves into new cloud infrastructure
and Internet of Everything (IoE) offerings
to offset a slowing networking gear business.
Supply chain, which organizationally reports to
the CEO, is viewed as a growth enabler for the
company, whether it is establishing operations
for existing products in new markets, integrating
the 160 plus acquisitions it has transacted in the
last two decades or designing the next services
required for new businesses. The networking giant
is well-known for maturity in its collaborative
planning and risk management, with customers

10
and suppliers. It also has a major focus on
supply chain talent development, particularly
through job rotations that offer hands-on learning
opportunities.

the global supply chain organization. The Coca

Cola Co. is also developing advanced problemsolving capabilities and shop-floor certification
programs through a center-led organization.

Settling in at No. 8 after a multiyear rise of

more than 20 slots is leading chipmaker Intel.
Its supply chain team has a tall order in support
of businesses looking to stabilize PCs, grow in
data centers, and start winning big in tablets,
smartphones, wearables and IoT. Intels partnership
with customers to speed the ramp time and
increased adoption of vendor-managed inventory
(VMI) solutions, along with collaboration on
products and operational efficiency and agility, has
vaulted its customer satisfaction levels to worldclass levels. Its supply chain also continues to be
a vocal advocate for social responsibility in areas
such as conflict minerals. Inside Intel, its supply
chain IT group has developed a powerful analytical
platform being leveraged for such applications as
guided selling, reduced product validation cycle
time and improved warranty management.

Two large European clothing retailers continue

to climb up the ranking. Spanish fashion apparel
group Inditex is up one slot at No. 11 this year
and continues to boast outsized performance,
including a three-year weighted average ROA and
revenue growth of 17.7% and 9.1%, respectively.
The textile titans Zara organization is well-known
for rapid prototyping and time to market for new
products, and has adopted a segmented supply
chain approach to maximize fulfillment speed for
trendy and seasonal products and reliability for
basics and core products. Its highly integrated
supply chain also leverages social networks and
product scarcity to sense and shape demand.
Swedish retail star H&M rose four slots to No. 13
on this years ranking as it garnered more peer
votes and continued to post an incredibly high
three-year weighted average ROA of 26.7%, the
second highest of all companies included in our
ranking. It is on an aggressive growth path, with
plans to open 375 stores worldwide in 2014,
including 80 to 90 in China and dozens more in
other large Asian markets. H&Ms supply chain has
been a key enabler of this growth, as evidenced by
the recent successful launch of the new flagship
store in Melbourne, Australia, which saw thousands
queued outside waiting for the doors to open the
first morning.

DRAFT

Colgate-Palmolive moved up again, to No. 9 this

year. The investment community loves this global
CP leaders consistently chart topping (17.4%
three-year weighted average) ROA. It is a paragon
of discipline in the domain of PLM and perpetually
self-funds its supply chain transformation and
corporate growth by reinvesting the returns of
recent programs. Colgate-Palmolive is significantly
transforming its end-to-end strategic and
operational planning processes and solutions
to dramatically reduce the time required to set
priorities. With more than 80% of its business
outside the U.S., Colgate-Palmolive has a long
heritage of global people management, and
continues to invest in diverse teams and improving
employee capabilities through leader-driven
education and consciously assigned on-the-job
opportunities.
At No. 10 is another perennial leader, The Coca
Cola Co. Its supply chain organization has a
continued focus on productivity through the
application of Lean Six Sigma principles, but also
high-quality service as an enabler for corporate
growth. The Coca Cola Co. is leveraging advanced
analytics for supply network and inventory
optimization to more efficiently support the 22
million customers it delivers to annually. Talent
management is another priority, reflected by the
expansion of its leadership program deeper into

In the past year, H&M and Inditex, the worlds two

biggest clothiers, have partnered up in support of
multiple social causes. For one, they have jointly
committed to eliminate pulp from ancient and
endangered forests from all of their rayon and
viscose clothing. In another area that continues
to make headlines, the two companies signed an
accord to improve factory safety conditions after a
deadly garment complex collapse in Bangladesh.
Another returning blue chip is Nike at No. 12. An
early adopter of PLM in footwear and apparel, Nike
has mature practices in sustainable design and
speed to market. It has increased precision across
its supply network to support an expanded portfolio
and also improved supply flexibility to address
the uncertain outcomes of sporting events. Nike
is also extending the use of its FlyKnit technology
platform into new product categories, enabling
greater flexibility and agility in weaving different

11
shoe models from the ground up. Its supply chain
leadership team, well-balanced between new and
veteran players, is focused on the development
of segmented supply chain capabilities, advanced
analytics for supply network design, and improved
sensing and shaping of demand, particularly in
volatile markets.
Supply chain leader Walmart marks its 10th year
on the list at No. 14 this year. The U.S. retail
giant leads the industry in data sharing and
supplier collaboration. It has expanded the use
of RFID tracking for improved logistics visibility
and continued its focus on distribution network
optimization for lower total landed cost. Walmart
leverages a center of excellence (COE) to identify
isolated local supply chain innovations and spread
them globally. In the past year, it has accelerated
its focus on multichannel, including the
introduction of stand-alone pick-up centers where
shoppers drive up and receive orders. For the first
time in a decade, Walmarts online sales growth
30% year over year was faster than Amazons.
This strategic capability is supported by the dozen
e-commerce software company acquisitions it has
completed over the past three years.

weighted average ROA. After several years

of operating in a fragmented marketplace,
the storage manufacturer is now reaping the
benefits of industry consolidation and booming
demand from cloud server farms and consumer
applications. It has also learned key lessons from
the 2011 Thailand floods that took a significant
portion of the hard-disk drive (HDD) industrys
capacity offline. The supply chain team has
developed advanced analytics to heat map risks
linked to supplier locations, dependence on the
HDD industry and other vulnerabilities. This and
other transformation programs are managed out
of a formal transformation program office. Talent
management is another key focus area for Seagate,
and the supply chain organization has been
working to attract high potential individuals from
outside the company in addition to offering an
advanced development program for its top existing
performers.
Kimberly-Clark comes in at its highest-ever rank
of No. 21, this year. Its supply chain team has an
advanced continuous improvement ethic, and
has been steadily maturing demand, supply and
product management capabilities over the past
five years. It has developed a capable supply
chain analytics team, which has been engaged in
the areas of supply chain cost-to-serve, customer
collaboration, demand sensing, S&OP, supply
execution and portfolio management. KimberlyClark understands that speed equals increased
currency and has taken actions to compress cycle
time performance throughout its cash-to-cash
cycle. The Kimberly-Clark supply chain team
has also demonstrated strong leadership in its
willingness to network with peers and share best
practices and, in some cases, even share logistics
resources with other CP companies for shared gain.

DRAFT

Longtime leader PepsiCo lands at No. 15 this year.

Its supply chain organization has built a capable
Lean Six Sigma team that started in manufacturing
operations, but is now working in other areas, such
as value stream mapping with emerging market
retailers. PepsiCo has developed its ability to coplan with retailers to the point where it can now
manage event-based promotions down to very
specific location-product-timing combinations.
It is also using digital marketing signals to
monitor and shape consumer demand patterns.
CSR is a continued priority for PepsiCo. It was
the one company recognized by the prestigious
Stockholm International Water Institute last year
for rolling out precision water management tools
to agricultural suppliers.
Rounding Out the List: No. 16 Through No. 25

This portion of the ranking is typically where

we find the new additions, and this year is no
exception. Were excited to welcome Seagate to
the list for the first time and Kimberly-Clark for the
second, after a years hiatus.
At No. 20 this year, high-tech storage company
Seagate posted an impressive financial
performance, including a 19.5% three-year

Returning to the list for a second year is Lenovo,

up four slots at No. 16. The rapidly growing,
Chinese electronics manufacturer first made its
mark with the acquisition and expansion of IBMs
ThinkPad PC brand. Since then, it has aggressively
pursued growth, both organically in PCs, servers
and mobile devices, and through additional
acquisitions. The latest high-profile targets
include Googles Motorola Mobility unit and IBMs
low-end server business. Lenovo has scaled up
a corporate analytics COE, supporting its supply
chain, sales and marketing and business units. In
the supply chain domain, this team has focused on
leveraging a more data-driven approach to global

12
supply network design, including sourcing and
manufacturing decisions. Improving supply chain
visibility over a standard cross-enterprise platform
has also been a major focus area for Lenovo over
the past few years, driving significant productivity
benefits and improved control and inventory
management.
At No. 17, global coffee purveyor Starbucks joins
the list for a fourth year. Starbucks was the leading
restaurant chain within the coffee category in
2013 and boasted a three-year average sales
growth of 11.9%. Its supply chain supports more
than 3 billion customer visits annually at the
companys 20,000 global locations. Consistent
with other leaders, Starbucks runs a broadspanning supply chain, which includes new
product development, customer service and
strategy. The company is in the middle of a major
supply chain tran=sformation program, running
more than two dozen concurrent initiatives aimed
at growing the top line and driving operational
excellence. These include efforts to expand and
revamp food menus to support both global scale
and local tastes, enhance commodity management
for both Starbucks and smaller local suppliers, and
leverage multichannel retailing to drive more foot
traffic to stores.

market, it continues to turn in impressive

financials, including three-year weighted average
ROA and revenue growth of 14.1% and 30.6%,
respectively. Its supply chain team has invested
considerable resources in the areas of factory
capacity utilization analytics, planning cycle
time reductions and make-vs.-buy sourcing
decisions. In the product management domain,
the Qualcomm supply chain team is focused on
both improving time to market for new products,
as well as analytics and governance built around
management of its active product portfolio.
At No. 22 this year is healthcare and CP
conglomerate Johnson & Johnson. Ever the
visionary organization, its supply chain is
focused on improving customer perfect order and
satisfaction rates, finding additional economies
of scale across its manufacturing and distribution
networks, and protecting its global brands through
centrally designed and locally deployed processes,
analytical tools and organization. J&Js Janssen
Pharmaceuticals group has segmented five distinct
supply chain types where the complexity of its
supply network design is based on market and
patient access needs.

DRAFT

3M, a name synonymous with innovation, rises

one slot to No. 18 this year. Thirty-three percent of
3Ms annual sales come from products launched
in the prior five years. Its new product vitality
index, which measures the ratio of innovation to
sales revenue, has contributed to yet another year
of three-year weighted average ROA above 13%.
While this highly diverse industrial has made a
conscious decision to maintain manufacturing
for some products in the U.S., it also forecasts
China-based sales to grow three times faster than
the companys total revenue linked to demand
for health and CP, such as face masks and water
filters. 3Ms key strategy to expand in global
markets is regionalization. It complements this
strategy with supply chain COEs, which help
consolidate the supply chain of an entire region.
3Ms wide range of products enables it to cater to
markets at different stages of economic growth
and also offer solutions to country-specific
requirements.
Another returning high-tech company is
chipmaker Qualcomm at No. 19. As the dominant
semiconductor player in the mobile device

Industrial equipment manufacturer Caterpillar fell

five positions to No. 23 this year, as a significant
downturn in the mining industry impacted its
financial performance. In particular, Caterpillars
three-year weighted average revenue growth
dropped from 23.4% in 2013 to 3.3% in 2014. To
deal with the downturn, Caterpillar was aggressive
in reducing inventory to manage through the
decline and avoid a buildup of products. This
cyclical downturn has not impacted the pace
of supply chain transformation, however. Its
enterprise transformation team is focused on
delivering multiple improvements, including
supply chain segmentation, Caterpillar-integrated
and dealer S&OP improvements, inventory
optimization, network modeling, visibility through
assurance of supply and trade-lane management.
Another leading industrial manufacturer, engine
and power generation specialist, Cummins, returns
this year in the No. 24 slot. The Cummins supply
chain has been on a multiyear journey toward full
end-to-end integration across its functions and
business units. The group is currently governed
by a centralized COE driving improvement efforts
in areas such as supply chain segmentation into
common business models, supply network design

13
optimization and synchronized business planning.
Improved talent management is another priority
being driven by senior supply chain management.
As a key player driving commercial and household
energy consumption, Cummins is demonstrating
leadership in environmental sustainability, and has
won several industry awards in this area.
At No. 25, Nestl rounds out the list with its fourth
appearance on the global ranking. The Swiss
CP conglomerate has moved toward a solution
provider model with a portfolio that includes
products, systems and services supporting brands
such as Nespresso. Its supply chain team is focused
on running a customer-centric supply chain,
with demand excellence based on data analytics
insights. Nestl is also a recognized master within
the logistics function. In support of less developed
emerging markets, Cameroon, Cte dIvoire and
Nigeria, it created a Cooking Caravan program
that traveled throughout the region, raising
awareness of the importance of balanced diets,
micronutrients and culinary hygiene.

customer satisfaction and inventory levels by

double-digit percentages in 2014. High-tech
pioneer, HP leverages an advanced analytics
modeling team to plot the next-generation design
of its supply network, and is also leading in the
creative use of cloud technology to support
demand and supply visibility. This tech blue chip
has also consistently led by example in CSR.
All of these companies exhibit leadership
characteristics and have compelling lessons for the
broader supply chain community. We look forward
to sharing lessons from them and many others in
the year ahead.
There is one last company that we would like to
recognize this year for its leadership and overall
contribution to the practice of SCM. In late, 2013,
Dell went private and, as a result, no longer
qualifies for the broader list of companies we
evaluate for the annual ranking. Up until that time,
it had appeared on the Supply Chain Top 25 list for
eight out of the last nine years. Its seminal work
in supply chain, particularly rapid configure-toorder capabilities and subsequent segmentation
to support multiple customer requirements, is
well-recognized across the community. We thank
Dell for its contributions to the supply chain
profession to date, and we look forward to sharing
its continually evolving supply chain expertise
going forward.

DRAFT

Honorable Mentions

Every year, there are companies that demonstrate

strong leadership in demand-driven principles,
but do not make the list. This year, the ones wed
like to mention are LOreal, DuPont, Huawei
Technologies, Schneider Electric and HP.

Cosmetics giant LOreal is driving continuous

improvement to its supply chain and financial
performance management through a mature S&OP
process. It has also established strong supplier
collaboration capabilities that leverage a standard
portal and process. As its portfolio has shifted
toward agro-business, DuPont has sustained
efforts on end-to-end process integration,
improved supply chain resilience, and building
a collaborative culture across its supply chain
and partner organizations. Then there is Chinese
information and communications technology
leader Huawei Technologies. Its supply chain
group has moved into a visible leadership role for
the company, tailoring supply chain solutions to
segmented customer needs, collaborating with
customers for improved demand forecast accuracy
and moving to digitize both its customer and
factory-facing processes. Schneider Electric is
another large industrial on a rapid improvement
trajectory. Based on its extensive work to segment
different supply chain models in line with unique
customer requirements, it is on track to improve

What Is Demand-Driven Excellence?

The concept of being demand-driven is at the
heart of the Supply Chain Top 25 ranking. We first
started writing about demand-driven principles in
2003, and have published hundreds of documents
on the topic since, including a newly crafted
maturity model to help companies move along the
transformation curve.
Because its so critical to the Supply Chain Top 25
analysis, heres a brief synopsis of what it means
to have a demand-driven value chain. Figure 1
captures the organizational ideal of demanddriven principles as applied to the global supply
chain. This model has three overlapping areas of
responsibility:
Supply management Manufacturing,
logistics, supply planning and sourcing
Demand management Marketing, sales,
demand planning and service

14
Product management R&D, engineering
and product development
When these processes work together, the
business can sense, shape, and respond quickly
and profitably to opportunities arising from
market or customer demand. The defining
characteristics of supply chains built to this
design include the ability to manage demand,
rather than just respond to it; a networked, rather
than linear, approach to global supply; and the
ability to embed innovation in operations, rather
than keep it isolated in the laboratory.

FIGURE 1

Demand-Driven Principles

A system of technologies and processes that senses

and responds to real-time demand signals across a
supply network of customers, suppliers and employees

Demand

Operational Excellence and Innovation

Excellence
Two basic dimensions of measurement capture the
totality of the best-in-class, demand-driven, global
supply chain: operational excellence and innovation
excellence (see Figure 2). To measure operations,
including delivering as promised to customers and
keeping costs under control, we recommend a
hierarchy of metrics, with perfect order performance
and total supply chain costs at the top.

FIGURE 2

Supply

Product

Source: Gartner (May 2014)

DRAFT

Operational Excellence and Innovation Excellence

(Higher Price/
Earnings Multiples)
Winners
Leader

Demand

Supply

Product

Operational
Excellence
(Perfect Order,
Total Supply
Chain Cost)

Demand

Supply
Laggard

Product

Losers
Laggard

Source: Gartner (May 2014)

Innovation Excellence
(Time to Value, Return on R&D)

Leader

15
Of course, operational excellence has value only if
customers want whats being made and shipped.
To address this, we look at innovation excellence.
Although far harder to measure reliably, this
dimension can also be managed with a hierarchy
of metrics, in this case, topped by time to value
and return on new product development and
launch (NPDL). The key is to find the right balance
on both these dimensions. Too much emphasis on
one at the expense of the other either squashes
innovation or hampers growth.
Its important to recognize the business life cycle
aspect to this balance that our methodology also
attempts to reflect. Each year, we see examples
of previously successful businesses struggling
with the competitiveness of their products, while
still possessing very advanced supply chain
capabilities. This condition can exist for a period of
time before both resynchronize and either return
to high performance or spiral into decline. Since
the opinion poll portion of our methodology is
based on the relative capability and leadership
of a supply chain at a given point in time, it is
possible for a companys supply chain to score well
on the polls while also posting a less competitive
financial performance in the near term.

Table 2. Metrics for Operational Excellence and Innovation

Excellence

Performance
Dimension

Key Metrics

Operational
Excellence

Perfect order rates

Total supply chain costs

Innovation
Excellence

Time to value
Return on new product
launch

Source: Gartner (May 2014)

For each of these performance dimensions, weve
published a full hierarchy of metrics that allows
management to assess overall performance at
the highest level, diagnose problems via process
decomposition and make corrections at the
tactical work level (see Figure 3 and Figure 4). We
have also published a hierarchy of manufacturing
metrics to identify some of the more detailed
functional metrics that must be aligned with endto-end supply chain goals to achieve the overall
goal of operational excellence.

DRAFT

Measuring Demand-Driven Excellence

The Metrics We Wish We Had

For the Supply Chain Top 25 ranking, our ideal

would be to have metrics that perfectly describe
the two basic dimensions of performance:
operational and innovation excellence. These are
the dimensions that point meaningfully to the
better value chain, identifying which business is
faster, stronger and smarter. Betting on next year
or next quarter is a matter of knowing who the
better athlete is, not merely who won last time.
Our premise is that the better athlete is more
likely to win markets and profits in the future.
Therefore, the companies that can demonstrate
superior performance against these dimensions
merit a higher share price multiple on a dollar of
current earnings.
In our ongoing supply chain research, weve
identified the metrics that map to these
dimensions, which, if we had them, would clearly
convey the organizations that have the healthiest
value chains (see Table 2).

However, from our work with companies and our

benchmarking studies in the past, were all too
aware of how inaccessible this data is in most
companies, particularly within a realistic time
frame. Moreover, although some companies
may have some of the data we seek, there are
vast inconsistencies in how these metrics are
calculated from company to company.
Therefore, for the Supply Chain Top 25 ranking,
we look to publicly available, audited financial
data to find the closest possible proxies. We know
the limitations inherent in these metrics. Existing
financial accounting principles were developed
in the hard-asset, factory-intensive economy of
the early 1900s. For example, the balance sheet
treatment of inventory as a valuable asset rings
false for the many short-cycle businesses today
that see inventory as more of a liability. Similarly,
soft assets like brands and IP, which are essential
to demand creation, are difficult for standard
accounting practices to handle. Even income
statements can obscure real costs with sneaky
capitalization rules.

16
FIGURE 3

The Hierarchy of Supply Chain Metrics: Operational Excellence

Demand
Forecast

Perfect
Order

Assess

SCM
Cost

Cash to Cash

Inventory
Total

AP

Supplier
Quality

Cost
Detail

AP = accounts payable
AR = accounts receivable
FG = finished goods
Source: Gartner (May 2014)

FIGURE 4

Supplier
On Time

Production
Schedule
Variance

Raw
Material
Inventory

Plant
Utilization

Diagnose

AR

Purchasing
Costs

WIP & FG
Inventory

Direct
Material
Costs

Order
Cycle
Time

Correct
Perfect
Order
Detail

SCM = supply chain management

WIP = work in process

DRAFT

The Hierarchy of Product Metrics: Innovation Excellence

New
Product
Forecast
NPDL
Investment

NPDL
Cost

Time to Value
Time to
Market
Customer
Needs
Met
New
Product
Detail

Source: Gartner (May 2014)

Budget
Performance

Planned Versus
Actual
Manufacturing
Cycle Time

Time to
Breakeven

Pipeline

Part/
Process
Reuse

Engineering
Changes

First Pass
Yield

First-Year
Field
Returns

Cost
Detail

17
Because of these issues, our methodology isnt
limited to financial metrics. Instead, we see the
financials as one important component that
provides a baseline, an anchor and an objective
foundation on top of which we place the group
intelligence of a vote, precisely because no
combination of income statement or balance sheet
financial metrics will tell us which companies are
furthest along toward the demand-driven ideal of
supply chain excellence. For this reason, we look to
craft a methodology that combines enough, but not
too many, of the right metrics both quantitative
and qualitative to achieve our goals.

Supply Chain Top 25 Methodology

The Supply Chain Top 25 ranking comprises two
main components: financial and opinion. Public
financial data provides a view into how companies
have performed in the past, while the opinion
component offers an eye to future potential and
reflects leadership in the supply chain community.
These two components are combined into a total
composite score.

purpose of the Supply Chain Top 25: Its intended

to be a lightning rod and foundation for vigorous
debate about what constitutes leadership and
supply chain excellence.
At the same time, we continually look for ways
to mitigate any issues with the methodology,
and enhance the explanatory power, applicability
and extensibility of the overall ranking. The
impact of brand recognition on the vote, industry
variations in inventory and inequalities between
more versus less asset-intensive industries are all
challenges with which we grapple. These issues
are multifaceted. By analyzing them, weve been
able to make incremental changes that have
allowed us to painstakingly chip away at some of
the problems, while maintaining consistency from
year to year at the same time.
Similar to last year, we used a 50/50 overall
weighting for this years ranking: 50% for the
financial component and 50% for the opinion
component.

DRAFT

We derive a master list of companies from a

combination of the Fortune Global 500 and the
Forbes Global 2000, with a revenue cutoff of $10
billion. We then pare the combined list down
to the manufacturing, retail and distribution
sectors, thus eliminating certain industries, such
as financial services and insurance (see Table
3 for a full list of excluded industries). We are
open to feedback from the broader supply chain
community on the methodology we use. Indeed,
this goes to the very heart of what we see as the

Financial Component
Three financial metrics are used in the ranking:
ROA Net income / total assets
Inventory turns Cost of goods sold /
inventory
Revenue growth Change in revenue from
prior year

Table 3. Industries Not Included in the Supply Chain Top 25

Airlines

Insurance

Services

Banks

Mail, Package and Freight

Delivery

Shipbuilding

Crude Oil Production

Metals

Software Development

Diversified Financials

Mining

Telecommunications

Energy

Petroleum Refining

Temporary Help

Engineering/Construction

Pipelines

Trading

Entertainment

Railroads

Utilities

Healthcare: Insurance, Managed

Care, Services, Providers

Real Estate

Information Technology/
Computer Services

Shipping

Source: Gartner (May 2014)

18
ROA was weighted at 25%, inventory turns 15%
and growth 10%. Inventory offers some indication
of cost, and ROA provides a general proxy for
overall operational efficiency and productivity.
Revenue growth, while clearly reflecting myriad
market and organizational factors, offers some
clues to innovation. Financial data is taken from
each companys individual, publicly available
financial statements.
The weighting within the financials is the same as
last year. Prior to 2010, inventory was weighted at
25%. We had considered dropping it altogether. As
much as inventory is a time-honored supply chain
metric one of the few real supply chain metrics
on a companys balance sheet there have always
been issues with it, not the least of which is that
higher turns dont always point to the better supply
chain. At the same time, its a metric thats widely
known and understood, both inside and outside the
supply chain community. Despite the issues, its
not entirely invalid as an indicator, particularly if
combined with other metrics. Therefore, we decided
to leave it in, but reduce its weighting.

Opinion Component
The opinion component of the ranking is designed
to provide a forward-looking view that reflects the
progress companies are making, and the extent to
which they demonstrate leadership through visibility
in the supply chain community. Its made up of two
components, each of which is equally weighted: a
Gartner analyst expert panel and a peer panel.
The goal of the peer panel is to draw on the
extensive knowledge of the professionals that,
as customers and/or suppliers, interact and have
direct experience with the companies being
ranked. Any supply chain professional working
for a manufacturer or retailer is eligible to be on
the panel, and only one panelist per company is
accepted. Excluded from the panel are consultants,
technology vendors and people who dont work
in supply chain roles (such as public relations,
marketing or finance).
We accepted 219 applicants for the peer panel
this year, with 188 completing the voting process.
Participants came from the most senior levels of
the supply chain organization across a broad range
of industries. There were 32 Gartner panelists
across industry and functional specialties, each of
whom drew on his or her primary field research and
continuous study of companies in their coverage area.

DRAFT

Since 2009, weve used a three-year weighted

average for the ROA and revenue growth metrics
(rather than the one-year numbers we had previously
used), and a one-year quarterly average for inventory
(rather than the end-of-year number we had previously
used). The yearly weightings are as follows: 50% for
2013, 30% for 2012 and 20% for 2011.
The shift to three-year averages was put in place
to accomplish two goals. The first was to smooth
the spikes and valleys in annual metrics, which
often arent truly reflective of supply chain health,
that result from events such as acquisitions or
divestitures. It also accomplishes a second, equally
important goal: to better capture the lag between
when a supply chain initiative is put in place (a
network redesign or a new demand planning and
forecasting system, for example) and when the
impact can be expected to show up in financial
statement metrics, such as ROA and growth.
Inventory, on the other hand, is a metric thats
much closer to supply chain activity, and we
expect it to reflect initiatives within the same year.
The reason we moved to a quarterly average was
to get a better picture of actual inventory holdings
throughout the year, rather than the snapshot,
end-of-year view provided on the balance sheet in
a companys annual report.

Organizations must surpass a base threshold

of votes from both panels to be included in
the ranking. Therefore, a company that had a
composite score fall within the Supply Chain Top
25 solely based on the financial metrics would not
be included in the ranking.
The figures below provide a breakdown of the
peer vote on the dimensions of region, industry,
function, role and revenue. The regional breakdown
of voters continued to be a particular emphasis for
us, and we continued to make progress this year.
Until 2010, North American voters made up 80% of
the total. Since that time, we have made progress
in achieving better balance regionally, increasing
the percentage of voters from Europe and Asia/
Pacific to provide a more balanced global view of
supply chain leadership (see Figure 5).
Polling Procedure
Peer panel polling was conducted in April 2014 via
a Web-based, structured voting process identical
to previous years. Panelists are taken through a
four-page system to get to their final selection of
leaders that come closest to the demand-driven

19
FIGURE 5

Comparison of Peer Panel Regional Composition, 2014 vs. 2010

Source: Gartner (May 2014)

FIGURE 6

DRAFT

2014 Peer Opinion Panel Composition: Industry

The second page asks for demographic

information.
The third page provides panelists with
a complete list of the companies to
be considered. We ask them to choose
30 to 50 that, in their opinion, most
closely fit the demand-driven ideal.
After the subset of leaders is chosen,
the form refreshes, bringing just the
chosen companies to a list. Panelists
are then asked to force-rank the
companies from No. 1 to No. 25, with
No. 1 being the company most closely
fitting the ideal.

Source: Gartner (May 2014)

ideal, which is provided in the instructions on the

voting website for the convenience of the voters.
Heres a breakdown of the voting system:
The first page provides instructions and a
description of the demand-driven ideal.

Individual votes are tallied across the

entire panel, with 25 points earned for
a No. 1 ranking, 24 points for a No. 2
ranking and so on. The Gartner analyst
panel and the peer panel use the exact
same polling procedure.
By definition, each peer voters expertise
is deep in some areas and limited in
others. Despite that, peer voters arent
expected to conduct external research to
place their votes. The polling system is
designed to accommodate differences in
knowledge, relying on what author James
Surowiecki calls the wisdom of crowds

20
to provide the mechanism that taps into
each persons core kernel of knowledge
and aggregates it into a larger whole.

FIGURE 7

2014 Peer Opinion Panel Composition: Function

Composite Score
All this information the three
financials and two opinion votes is
normalized onto a 10-point scale
and then aggregated, using the
aforementioned weighting, into a total
composite score. The composite scores
are then sorted in descending order to
arrive at the final Supply Chain Top 25
ranking.

Looking Ahead
We are very excited to be celebrating
the 10-year anniversary of the annual
Supply Chain Top 25 ranking this
year. Later in 2014, we will publish a
longitudinal analysis of the results of
the ranking over the past decade. Until
then, the Healthcare Supply
Chain Top 25 lies ahead for the
rest of 2014, as well as a steady
cadence of publications that
offer various analytical lenses
on the full 2014 global ranking.
These include industry cuts that
examine how the companies in
a particular industry stack up
against each other and what the
industry can learn from them,
as well as regional cuts for
Asia/Pacific and Europe, which
do the same for companies
headquartered in each region.
While these cuts will be
published throughout the year,
we will pull them all together
in a special report toward the
end of the year for ease of
reference. We will also continue
to investigate new metrics, and
ways to define and measure
supply chain excellence.

Source: Gartner (May 2014)

DRAFT
FIGURE 8

2014 Peer Opinion Panel Composition: Role

Source: Gartner (May 2014)

21
FIGURE 9

2014 Peer Opinion Panel Composition: Revenue

Source: Gartner (May 2014)

DRAFT

Weve witnessed fantastic progress in the practice

of SCM over the past decade. As Gartners
supply chain research group, we look forward
to continuing to share the lessons learned,
providing a platform for informed and provocative
debate, and helping the supply chain community

continually push the envelope of innovation in its

contributions to the global economy.
Source: Gartner Research Note G00264011, Stan Aronow,
Debra J. Hofman, Michael Burkett, Kimberly Nilles, Jim Romano,
21 May 2014

22
About LLamasoft
LLamasoft, Inc. provides software and expertise to help large
organizations design and improve their supply chain network
operations. LLamasoft Supply Chain Guru is the leading supply
chain design and analysis application available in the market
today. It enables companies to model, optimize and simulate their
supply chain operations, leading to major improvements in cost,
service, sustainability and risk mitigation.
LLamasoft is dedicated to advancing technology focused on
the continuous improvement of enterprise supply chains. Our
customers include many of the worlds largest organizations across
a wide range of industries.
Contact LLamasoft
866-598-9831
sales@llamasoft.com
To learn more about LLamasoft, check out our white papers or
request a demo.
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DRAFT

The Majority of Gartner Supply Chain Top 25 for 2014 Companies Have Designed with LLamasoft is published by LLamasoft Inc.. Editorial content supplied by LLamasoft Inc. is
independent of Gartner analysis. All Gartner research is used with Gartners permission, and was originally published as part of Gartners syndicated research service available to
all entitled Gartner clients. 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartners endorsement
of LLamasoft Inc.s products and/or strategies. Reproduction or distribution of this publication in any form without Gartners prior written permission is forbidden. The information
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opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice
or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in
entities covered in Gartner research. Gartners Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research
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