At the recent Gartner Supply Chain Executive Conference, the market research firm announced its Supply Chain Top 25, and pointed to the best practices that put them ahead of the pack. The high-tech industry was well represented by both long-time market leaders and newcomers as notable in the space. These companies are nimble and innovative and have demonstrated ability to react in a changing marketplace.
“Despite some striking performances, however, today's supply chain leaders face a much different business environment than just 12 months ago,” said Stan Aronow, research vice president at Gartner said. “A general trend toward protectionism, as evidenced by Brexit and the policies of the current U.S. administration, has caused some companies to shift supply network design decisions and create contingency plans in anticipation of new trade policies. Continued investment in innovative supply chain capabilities will be required to meet this changing landscape.”
Gartner identified three key trends that the frontrunners are using to stay competitive and set the supply chain bar high in terms of systems, processes, and people:
- Digitalization : In the supply chain, digital connections across and within the operations has become critical to encourage agility and innovation, as well as to support real-time management. Disruptive technologies include Internet of Things (IoT), cloud computing, advanced analytics, and cognitive computing.
- Adaptive organizations & capabilities : By cultivating adaptiveness, supply chain organizations uncouple potential success from supply chain constraints, customer needs, and other challenges. Interrelated with digitalized supply chains is the ability of companies to be more adaptive to changes in their value chains. “Some of the more impressive supply chain organizations have created a modular supply chain service model that allows for variants of functional capabilities to be combined into ‘plug-and-play’ segments, such as make-to-stock, configure-to-order or engineer-to-order manufacturing profiles,” said Aronow. “This approach allows them to more quickly and flexibly support different business needs and outcomes, and speeds up activities such as M&A integration.”
- Developing & fostering healthy ecosystems : A strong focus on maintaining and improving the health and well-being of critical ecosystems leads to success. Smart organizations foster and support relationships with suppliers, partners, employees and customers throughout the value chain. Further, a strong sense of corporate social responsibility (CSR) is vital. Leading organizations cultivate a strong stance on environmental sustainability and interweave these efforts to get beyond mere compliance to a focus on supporting corporate strategy.
The list of high-tech organizations that embody these values and strategies is impressive. It includes consumer electronics OEMs, electronic component distribution companies, electronic manufacturing service providers, and industrial equipment manufacturers. All of the top 10 high-tech companies fall within the top 100 of the overall list.
Gartner’s list is based upon a weighted score based upon three financial metrics (return on assets; inventory turns, and revenue growth) and a corporate social responsibility (CSR) metric. Revenue and ROA are calculated based upon a three-year weighted average. The CSR score is calculated based upon the company’s CSR reports and third-party measurements.
Since 2015, Gartner has been building its Masters category as well. Today, Apple is one of those high-tech companies that has been dubbed a perennial supply chain leader. Gartner points to the company’s innovation both in term of designing new products and manufacturing them. “While the company has backed off plans to produce its own cars, it is still actively working on autonomous vehicle technology and experimenting with augmented reality (AR) technologies,” Gartner said. The companies with this designation have sustained leadership over the last decade.
Click on the image below to start a slideshow of this year’s Gartner top 10 supply chain leaders in high tech:
How is your organization doing in terms of these leadership metrics? Where does it need to improve? Let us know in the comments section below.