In developing its Supply Chain 25, Gartner digs deep, analyzing each company as a unique entity on its own merits.
Nearly 300 companies participated in this year’s survey, with rankings based on financial data such as return on assets, inventory turns and revenue growth, as well as opinion. Responses are tallied into a composite score.
The opinion component of the rankings is forward-looking. It includes two panels, one of Gartner experts and one of senior supply chain executives from multiple industries.
The rankings are intended to spur broader debate about what defines supply chain excellence. Gartner solicits input from the global supply chain community about its methodology.
“The goal is to push the envelope for discussions about defining leadership and excellence,” said Debra Hofman, Gartner’s managing vice president. “We are looking at a combination of things that indicate companies that others can look to and learn from.”
Metrics considered include day sales outstanding, or DSO; independent customer ratings; cash to cash for supply chain throughput rates; and the ratio of inventory-to-revenue change.
Top 25 companies share a commitment to demand-driven supply chain management. Demand-driven supply chains overlap at the confluence of supply, demand and product management. They are structured to manage demand rather than react to it. A key metric in assessing the success of demand-driven supply chains is operational excellence. Gartner has devised a hierarchy of metrics to measure cost controls, service promise fulfillment and other hallmarks of successful operations.
Historically, products and product development were outside the purview of supply and demand. In a demand-driven environment, supply, demand and product development are coordinated. “Supply chain leaders see demand as a managed network of vendors, from suppliers to their own network,” Hofman said. “Products are embedded in with the supply chain.”
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