Matt Davis

A member of the Gartner Blog Network

Matthew Davis
Research Director
3 years at Gartner
12 years IT Industry

Matt Davis is a Supply Chain Research Director and lead analyst for Supply Chain Strategy. Read Full Bio

Supply Chain Risk Management: Black is the New Black?

by Matt Davis  |  August 2, 2012  |  1 Comment

Black is the new black?

Hype around “Black Swan Events” – large scale, unpredictable disruptions – is all the rage today in supply chain risk management.  But if black swans are supposed to be the outliers, then why does it seem like supply chains are being hit by so many each year?

The black swans were always here.  It is business that has changed.  Blame globalization and the internet.  Globalization has extended supply chains more than ever before, both demand and supply networks.  It is the extension of our supply networks around the world that has led to the frequency of risk events.  And the internet (along with the 24 hour news cycle) has given us exponential, real-time visibility to each disruption as it occurs.

I don’t see the trend of extending supply chains slowing any time soon, so buckle in for the bumpy ride.  The leaders in preparing for these disruptions are focused on what they call supply chain resiliency and are investing in four areas: multi-tier network visibility, supply chain agility, risk management and network modeling expertise.  Expect these companies to be better off when the disruptions occur.

I don’t think there are any more black swan risk events than there were in the past, we can just see them now.  Disagree?  Let me know…  The one thing we can ALL agree on is that the supply chain community needs to end the love affair with the term “black swan” … It’s so last season.

1 Comment »

Category: AMR Supply Chain Top 25 Supply Chain Risk Management     Tags: , ,

2012 Forecast for Corporate Buzzwords and Phrases

by Matt Davis  |  March 8, 2012  |  11 Comments

Sure, you’re cool… but are you corporate cool?  Had a more than flat reaction when busting out a “synergy” recently?  Been blown away by a coworkers slick use of “ideate” in Friday’s big meeting?  How do you keep track of the latest buzzwords and know when to retire others? Don’t fret, I’m here to help.

As an analyst, it’s my job to find patterns that indicate trends.  This same core competency has a lot of synergy in finding patterns in corporate buzzwords and phrase-ology.  What we’re really talking about here is a new normal, where it’s important to balance use of words that are on the way out with the hot new verbal trends in the corporate jargon toolbox.  As an action item, I took some of my thoughts on these trends offline to ideate on how I can assist with making you the coolest person in the boardroom.  At the end of the day, I landed on what I think are some great tips that you can leverage to create chaos across the hippest of work communities.  Take what I’ve said below, see what sticks and certainly ping me if you want to tie out on any black swans that I may have missed…

Buzzwords follow a similar curve that we see in a lot of product lifecycles.  As I created my forecast for the hottest 2012 buzzwords, I plotted the contenders based on their popularity and acceptance in the workplace (see Figure 1).

To aid in taking advantage of the 2012 forecast, I provide the translation of these terms by their respective place in the lifecycle…


  • “ideate”:  sure, let’s talk…  but can we make it sound simultaneously scientific and zany
  • “2020”:  finally, a plan for the future that we don’t have to change next year
  • “…certainly…”:  new, but spreading like wildfire.  inject anywhere in a sentence to let others know you’re both open and sincere
  • “chaos”:  hip new term prevalent in the consultant and analyst space… read as “variable.”


  • “new normal”: took off after the recession as a way to say, “seriously, it’s not getting any better.”
  • “what we’re really talking about here is..”:  a handy way of saying, let me try to fix what someone else has said
  • “balance”:  oddly, you can’t do the same thing the same way and expect a different result
  • “black swan”: no, I haven’t read the book, but it sounds so much cooler than just saying “risky.”
  • “at the end of the day…”: a nicer way of saying, “We’ve talked about this far too long.” (even if you’re the only person who has been talking)
  • “take it offline”:  let’s never speak of this again
  • “leverage”:  plagiarize and steal are such nasty words
  • “see what sticks”: there’s no time for critical thinking or filtering. can you handle that part?
  • “tie out”: i’ll be giving you some more work later
  • “toolbox”: a way of talking about how we work that feels more like work-work


  • “Action Item”: i’m delegating tasks, but now we all feel more like superheroes
  • “…ping…”: (see: I’ll ping you later) read as “yay! more email because I can’t just tell you now.”
  • “Synergy”:  I’m not sure what’s happening, but let’s assume it’s awesome for everyone.
  • “Core Competency”: I can do at least one thing right.

Now, we all know, success is not just knowing the buzzwords, it’s also knowing when to use them.  I’ve provided a handy pocket guide to buzzword excellence in Figure 2. 

In all seriousness, many buzzwords emerge for good reasons.  They arise and stick because they accurately capture issues that we’re all facing regardless of industry, position or region.  In a sad way, they’re good indicators of what will be key initiatives for the corporate masses.  A more enlightened person than I may also say that they unify us all in the challenges that industry must solve to continue to evolve.  If that’s the case… new normal, 2020 and ideate would show that optimists see a bright future.  Black swans, new normal and chaos are all indicators that this optimism will be tempered by some major global challenges.  We’ll need all types – optimists and pessimists, skeptics and dreamers – to come together to solve these biggest challenges in 2012 and beyond.  Let’s just hope we have the right words to communicate with one another.


Category: Uncategorized     Tags:

Corporate Jargon as Famous Movie Quotes

by Matt Davis  |  December 14, 2011  |  2 Comments

Occasionally in my work with clients, I will say some jargon that clearly does not register.  And in an effort to clarify, I always try to think of a better way to explain that just providing a definition.  So for you all you hybrid business geeks / movie buffs, here are my thoughts on some ways we can share our jargon in a clearer way…

  • Functional Silos:“What we’ve got here… is failure to communicate.” – Cool Hand Luke
  • Cost-to-Serve: “SHOW ME THE MONEY!” – Jerry Maguire
  • Best Practices: “I’ll have what she’s having…” – When Harry Met Sally
  • Demand Sensing:“You talkin to me?!” – Taxi Driver
  • Demand Shaping:“These aren’t the droids you’re looking for.” – Star Wars
  • Predictive Analytics: “They’ve done studies, you know. Sixty percent of the time, it works every time.” – Anchorman
  • Capacity Management: “You’re gonna need a bigger boat.” – Jaws
  • Risk Management: “There’s no reason to become alarmed, and we hope you’ll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane?” – Airplane
  • Sales and Operations Planning (S&OP): “You can’t handle the truth!” – A Few Good Men
  • Network Visibility: “If I’m walking into a sh*t-storm, I want to know which way the wind’s blowing.” – Spy Game
  • Collaboration: “Keep your friends close… but your enemies closer.” – The Godfather II
  • End-of-Life Management: “Goonies never say die!” – The Goonies
  • Benchmarking: “I’m not perfect, but who are we kidding, neither are you.” – Wedding Crashers
  • Cost / Benefit Analysis: “All I’ve ever wanted was an honest week’s pay for an honest day’s work.” – Sergeant Bilko
  • Fulfillment: “Why don’t you just go home? That’s your home. Are you to good for home? Answer me!” – Happy Gilmore
  • Tradeoff Analytics: “Have you ever wondered if there was more to life, other than being really, really, ridiculously good looking?” – Zoolander
  • Continuous Improvement: “If you can dodge a wrench, you can dodge a ball.”– Dodgeball

 And for anyone in process management… “I don’t have to take this abuse from you; I’ve got hundreds of people dying to abuse me.” – Ghostbusters


Category: AMR Supply Chain Top 25 Demand Sensing and Shaping Supply Chain Risk Management     Tags:

Social Network Solutions Businesses (OSOs) Bypassing OEMs Will Impact Supply Chain

by Matt Davis  |  December 12, 2011  |  Comments Off

10 years ago I was watching TV and saw a commercial for a dish soap that had a website link at the bottom of the ad.  I thought, “Why the heck would I go to their website to look at soap?  Nuts.”  It seemed bizarre.  Now, weblinks in commercials are a mainstay.  In fact, demand management and promotions planning is directly linked with this strategy.  This moment has stuck with me because it was a major signal… a giant red flag.  Product marketing and distribution were changing to a more integrated approach and, today, another major red flag grabbed my attention.  As I read a short story on DigiTimes “Server brands reportedly put pressure on ODMs to not acept orders directly from end clients“, it was one of the most clear examples of the impacts of “solutions” on supply chain that I have seen.  Essentially, DigiTimes states that certain social network providers are going directly to ODMs in building out data centers and bypassing major brand OEMs.

I introduced the concept of an Original Solutions Orchestrator (OSO) in a recent blog posting “You HAVEN’T heard of an OSO?! Let’s talk about some solutions.”  In that blog, I discuss how the push to solutions is completely shaking up competition in device manufacturing, with High Tech being one of the most largely impacted industries.  A key finding in our OSO research is that those who control the data will control the solutions. 

So to see that social networking leaders, as value-based solutions providers, may be cutting out pieces of the traditional electronics value chain is not too surprising.  They are demonstrating that customer value is shifting from hardware feature sets to application and content based offerings.  The tablet business a prime example of this shift.  Less than a month ago we saw one major tablet provider receive some criticism for pricing the hardware below cost.  This move was one of the most clear examples of High Tech hardware moving to the “razor blade model.”

A four pack of razor blades may cost you over $20 at a retailer, whereas the razors themselves are often half that price. Some companies even just give the razors away. The hope is that consumers get locked on a particular razor and then continue to buy blades on an ongoing basis. It’s commonly known as the “razor blade model” — give away the razors and make up the margin on continuing revenue streams for blade purchases.

As device hardware continues to commoditize, software, content and applications are driving more value from the customer’s perspective. In certain product categories, the hardware is simply a software delivery mechanism. This value shift is changing where and when revenue and margin will be realized. The aftermarket may very soon become the primary market. As this evolution continues, it is not unlikely that hardware may just be a manufacturer’s means to enable an ongoing software-based revenue stream.   These trends all signal an important message for supply chain organizations: Software equals value. Supply chain management for devices is changing, and we all must understand the emerging capabilities in software, content and digital distribution.

So are the OEMs getting that message?  Seems like it.  These OEMs themselves are developing solutions offerings.  When was the last time you saw a PC commercial that didn’t directly mention “solutions”?  Most start with that and barely touch on the associated hardware.  All of this churn across the High Tech ecosystem points to important points for supply chain to consider:

  • How will physical distribution networks change in the next five years?  It is likely that the hardware / software value shift will continue (if not accelerate) toward software.  Supply chain will decouple hardware and software delivery and organizations will be tasked to manage both the physical and digital supply chains.  We will see postponement re-emerge as a primary competitive weapon, but this new era postponement will focus on software as opposed to late-stage assembly.
  • What is the role of the digital supply chain?  Software, content and application delivery has been managed largely with minimal supply chain interaction.  Leading organizations are developing digital supply chain capabilities and applying concepts from physical supply chain management to mature these groups.  New capabilities like embedded software (see: Embedded Software Is an Enabler of Demand-Driven Supply Chain Orchestration) are also vastly changing how, where and when software can be distributed.  Supply chain has a key role to play in enabling embedded software capabilities.
  • Who are the OSOs?  In short, it’s not yet clear and the opportunity is wide-open.  As we discuss in “Original Solution Orchestrator, Part 1: Integrating Physical, Digital and Solution Networks to Transform From an OEM to an OSO“, the OSO is a manufacturer, service provider or other corporate entity that connects data from the extended customer value cycle with the upstream supply chain to create complete solution offerings. An OSO comprehensively solves unique customer issues with the right mix of hardware, software and services across the extended customer value cycle.  We expect to see OEMs, software development orgs and even major consultancies take on this role in the pursuit of some high, recurring revenues in aftermarket services and solutions.
  • What is supply chain’s role in OSO?  Currently, there’s no clear owner for designing, integrating and managing data as part of solution management. We believe supply chain, as an end-to-end enabler of corporate strategy, has a vital role in connecting physical, digital and solution networks. The leaders will use supply chain to exploit the opportunities in solution management by using concepts such as lean, network design, change management and collaboration across supply chain, IT, sales, product, and finance organizations to enable an OSO business model.

So what do you think?  A year from now, will this story be an isolated example of a change to High Tech markets or just the first in a series of ecosystem evolution?

Comments Off

Category: Demand Sensing and Shaping Digital Supply Chain Original Solutions Orchestrator OSO Solutions Provider     Tags: , , , ,

Google Acquisition of Motorola: OSO Model and the Solutions Supply Chain

by Matt Davis  |  August 15, 2011  |  1 Comment

Unless you were hiding under a rock today, you must have heard about Google’s acquisition of Motorola and there’s is already chatter on motives of the deal.  My take is that this acquisition falls in line with a lot of activity we are seeing in the High Tech industry as companies try to develop solutions provider capabilities.  I just published a report “Original Solution Orchestrator, Part 1: Integrating Physical, Digital and Solution Networks to Transform From an OEM to an OSO” in which we describe the Original Solutions Orchestrator (OSO) business model.  Our key finding is that if companies truly want to be an OSO, they are going to have into integrate physical, digital and solutions networks.  The integration of these networks to make an OSO model is depicted here:

So what does this OSO concept have to do with today’s acquisition announcement?  Google has had a clear strategy to tap into the digital and solutions supply chains in it’s development of the Android platform and associated applications.  In fact, I discussed this strategy back in October (Android: Google using content in a new “razor blade model”) in which I concluded that content / data is going to be equally if not more important than hardware in the near future.  In looking at our OSO model above, note that the Android platform is a clear example of the digital supply chain (DSC) in that it brings content to a device.  And Google’s website, analytics, search metrics, etc are all parts of the solutions supply chain (SSC).  The acquisition of Motorola will complete the OSO model by enabling a physical supply chain in the distribution of mobile devices.

The implications of a company like Google leading a development an OSO model are quite intriguing.  To date, most of the companies who have marketed themselves as OSO’s have almost all been device manufacturing OEM’s.  I have seen many of these OEM’s develop the OSO model through a web of strategic partnerships with software vendors and service providers.  There’s has been equally as much activity in the acquisition space from these OEM’s as well.  Consider Dell’s acquisition of the service provider Perot, Intel’s purchase of McAfee, HP’s of EDS and Palm, and on and on.  Today’s announcement shows that the OSO trend is spreading throughout the ecosystem and presents an interesting question for manufacturers, software companies, service providers and telecoms.  Who is really my competition?

Today’s announcement highlights the acquisition of hardware manufacturing capability.  What are some other activities we may soon see?  As we saw with IBM’s sale of the ThinkPad to Lenovo, it’s possible that the hardware manufacturers will sell off parts of their hardware business to focus on services.  There has already been a major push to outsource manufacturing across the industry, so a “0 asset” supply chain may be a possibility.  We could also see movement from the software vendor ecosystem who have capabilities to capture and manage data.  Or even from the telecoms that provide the infrastructure to connect the SSC and DSC with the physical supply chain.

The point is that as we see development of this OSO model, competition is going to get much more complex.  The partners and customers of today, may be competitors of tomorrow.  The key to surviving to reap the big margins in the OSO world will be to first understand the model and then to craft a clear strategy to manage it.

What do you think?  How will the OSO model complicate the High Tech market?  What should companies across the ecosystem focus on now to prepare for tomorrow?

1 Comment »

Category: Digital Supply Chain Original Solutions Orchestrator OSO Solutions Provider     Tags: , , , , , ,

You HAVEN’T heard of an OSO?! Let’s talk about some solutions.

by Matt Davis  |  July 29, 2011  |  2 Comments

The elevator I take to my office every day has a small video monitor that flashes snip-its of news, some stock tickers and, often, advertisements for products.  The last week, a series of those advertisements from Dell grabbed my attention.  Each had a singular picture of a particular user, say a hospital, a classroom or what looked like a small agency.  And next to the pictures was a brief blurb about a specific solution for that customer.  What grabbed my attention is that what is historically thought of as a device manufacturing OEM was completely positioning itself as a solutions provider.

This move of device manufacturing OEM’s to position themselves as solutions providers is definitely a trend and is not isolated to computing.  I have seen this same positioning in many parts of High Tech as well as in automotive, industrial and healthcare device manufacturing sectors.  Just what is a solution as compared to a traditional product or service offerings?  It’s best shown with a couple of solutions examples.

  • The Connected Classroom: Several of the market-leading computing OEM’s have offerings for the connected classroom.  These solutions typically provide a teacher with the ability to view desktops, to record lectures, to post lesson plans and to foster student collaboration.  Students and teachers can download classroom specific applications throughout the usage phase of the products.  The OEM’s can also monitor the devices to improve supply chain performance.  These improvements come from the ability to use device monitoring information to trace poor supply quality, to sense shifts in product usage that will impact demand, to quantify demand consumption and to better manage field service parts.  The solution provides big value to the education market vertical as well as the OEM’s operational performance but is only enabled with integration of hardware, software and services.
  • The Digital Consumer / Virtual Grocer:  In order to grow market share in Korea, Tesco had to find a way to grow volume without expanding its store footprint.  Recognizing a market need to reduce the amount of time needed to shop for groceries, Tesco created a virtual grocery store called Homeplus.  Billboards with pictures of products that look exactly like store shelves were placed in busy pedestrian areas like train stations.  Consumers can use their mobile devices to scan barcodes which then adds the item to their virtual carts.  This data is sent to a Homeplus location where the products are picked and then delivered directly to the consumer’s home.  This business model is a device dependent solution in which data integration to the grocer is required to execute plan, source and deliver business processes.  For more information on this solution, check out: … pretty interesting.

So what does any of this have to do with supply chain? A lot.  The biggest gap in today’s ecosystem around solutions delivery is the disconnected networks that exist between the “what” of solutions and the “how.”  Product development, services and marketing organizations are largely determining what solutions are needed for customers.  In almost every case, these solutions are reliant upon the right integration of physical, digital and data networks.  This integration is not just about infrastructure, but is actually most constrained by an understanding of the connection of business process to manage the physical distribution networks and the virtual worlds of data management and electronic software delivery. 

Supply chain organizations have long been utilized for process optimization, cost management and network management.  These three skills are essential for the “how” of managing a solutions business model.  It won’t be long before Chief Supply Chain Officer’s (CSCO’s) [in collaboration with the rest of the C-level staff] will help their manufacturing companies move from product and service OEM’s to Original Solutions Orchestrators (OSO’s).  The cutting edge OSO’s will become the new supply chain leaders with dominant brands based on data-focused value networks.  A key objective will be to sense, respond and manage the customer’s experience with the system and the solution.  So let’s level set on the definition of an OSO…

  • Original Solutions Orchestrator (OSO):  Manufacturer, service provider or other corporate entity that connects data from the extended customer value cycle with the upstream supply chain to create complete solutions offerings.  An OSO comprehensively solves unique customer issues with the right mix of hardware, software and services across the extended customer value cycle.  “Solution” examples include remote services, automation, “smart” products (smart city, smart grid, smart control, etc), self-help and device enabled applications.

The data generated and captured across a customer’s experience is the biggest source of potential value in the evolution to becoming an OSO.  This new network of information integration with product and service offerings is what I call the Solutions Supply Chain (SSC)…

  • Solutions Supply Chain (SSC): The process and activities required to capture and manage information from the extended customer value cycle generated in the system of physical, digital and solutions networks to enable a total solutions offering.  The SSC connects data generated from the extended customer value cycle with the physical and digital supply chains.

Currently, there is no clear owner for designing, integrating and managing the SSC as part of the OSO business model.  I believe supply chain, as an end-to-end enabler of corporate strategy, has a vital role in connecting physical, digital and solutions networks.  For those interested in more information on the OSO business model and the Solutions Supply Chain, my colleague Ray Barger and I will be hosting two webinars on the topic on Tuesday 8/9.  For more details, see:

What do you think? How will supply chain play a role in providing solutions to customers?  Do you think any companies are truly OSO’s today?


Category: Digital Supply Chain Original Solutions Orchestrator OSO Solutions Provider     Tags: , , ,

M2M Connected Supply Chain … for Ice Cream?

by Matt Davis  |  June 8, 2011  |  1 Comment

I am at Axeda’s annual Connexion conference which brings together users,  practitioners, analysts and providers in the M2M (machine-to-machine) / connected products ecosystem and found an interesting outcome of connecting the physical, digital and data networks of supply chain fulfillment: on-demand ice cream… with toppings no less.

MooBella ( is showcasing machines that enable the user to configure their own ice cream by selecting a base, from a variety of flavors and from a selection of toppings.  Once selected, your exact order is served on-demand.  It’s an easy three step process. (1) Select your Ice Cream,  (2) Pick your flavor and (3) Add your mix-in.  The “user interface” is shown here:
While that capability alone is impressive,  it is the inner-workings of the machine that grabbed my attention.  The ice cream bases (premium or low fat) stored separately from the flavorings in the lower cabinet.  This base travels via separate tubes into the chamber above where the different flavor options are added via the user’s specifications.  As the photo below shows, many different flavor offerings are available along with candy and cookie toppings.
These inner-workings make up the physical fulfillment of the product to a user. A physical supply chain. It is, however, the data generated in the multiple transactions that differentiates this machine from the rest of market.  This data can used both to optimize the performance of a single machine as well as aggregated to optimize the entire network of products.  For example…
  • Single machine: The embedded technology within the dispenser can monitor both performance as well as usage.  Data on the performance is shared with the services organization to ensure the machine is always running and enables remote services so that any issues can be proactively addressed before the issue ever impacts a user.  Usage data is shared to show what flavors are most often being selected, how long it takes to complete an order and the volume of users.  This data can be used to optimize replenishment as well as offerings at the unit level.  A demo of the internal monitoring is shown here:

  • Extended network:  With an aggregated view of all the data across every deployed machine, MooBella can enhance their customers’ experiences by optimizing offerings to maximize availability of the most popular flavors, by reducing cycle times in the user experience and by streamlining offerings to minimize queue times in the busiest locations (like a sports arena).
So what does any of this have to do with supply chain?  The answers all circulate around the integration of data with the physical supply chain.  
  1. Demand management:  MooBella’s machines are a clear example of a semi-configurable make-to-order process.  These types of processes often lead to variability that will meals demand management more difficult.  Analysis of usage patterns will enable better supply alignment with a better understanding of short and long-term demand.  Offerings per machine can also delimited where needed to actually shape demand.
  2. Supply chain services:  With a remote diagnostic of any issues, the services organization can align repairs and service parts management in a more efficient manner.  Not only does this reduce costs associated with downtime and multiple repairs, it ultimately delights customers by avoiding any disruptions to their use of the product.
  3. Cycle time management:  Data analysis on the time it takes to start an order to get your ice cream is monitored as an indication of how difficult it is to complete an order.  This time can vary, say between an elementary school and a corporate office (the kids most likely being much more adept with the technology).  Based on this data, offerings will be aligned at the machine level  to ensure the supply matches the individual demand.  This same methodology can be used to reduce the time per order in high volume areas.
Is M2M here to stay or is it a fad?  How will this type of technology impact supply chain?  Share your thoughts…

1 Comment »

Category: Demand Sensing and Shaping Digital Supply Chain     Tags: , ,

Gartner Supply Chain Executive Conference – AMR Supply Chain Top 25

by Matt Davis  |  May 23, 2011  |  Comments Off

We are only a week away from our annual Supply Chain Executive conference in Scottsdale.  The content for this year is quite exciting and we are all looking forward to the reveal of the 2011 Supply Chain Top 25.  The conference has been a hot topic with clients so I wanted to provide more details.  Mike Burkett released a great overview of the conference this morning, so I thought I would share for anyone who is interested. 

From Mike Burkett, VP Supply Chain Research…

Gartner Supply Chain Executive Conference Gets Back to Basics

by Michael Burkett

“The Gartner Supply Chain Executive Conference, starting 1 June, is fast approaching. Whether you are attending for the first time or as a returning participant, there is plenty in store for you as you hone your supply chain initiatives. The theme of the conference is “Getting Back to Basics,” highlighting the fundamental supply chain capabilities that have guided leading companies through the downturn, and lays the foundation for their next phase of growth. First Thing Monday does not publish again until after the conference on 6 June, so it’s the perfect time to offer guidance about what’s in store for those attending.

The main sessions will feature supply chain executives from top companies across industries sharing the practices that have helped their businesses compete. Featured on the main stage will be Coca-Cola, DuPont and Raytheon. Renowned author and Harvard Business School professor Clayton Christensen will provide his insights on the importance of maintaining innovation as companies fight to stay profitable. The highlight of the conference is the unveiling of our 2011 list of Top 25 Supply Chain companies, representing the best performers as judged by financial performance and supply chain peers.

In addition to the great speakers presenting in the main session, there will be five supply chain “tracks.” These tracks will feature Gartner analysts presenting on the most important topics that we see supply chain professionals wrestling with today. Several sessions will include case studies or guest panelists from industry. Conference attendees can reference the following highlights, in addition to the detailed conference agenda, to determine the sessions of most value to your initiatives.

Supply Chain Strategy
A characteristic that distinguishes companies on the Gartner Supply Chain Top 25 is an emphasis on supply chain strategy. Gartner’s survey on supply chain organization and talent shows a 36% gap between these leaders and the remaining respondents, where strategy and change management are priorities. Aligning supply chain strategy to business strategy is the shift needed to take a traditional supply chain that is reactive and transform it into an organization that supports profitable growth.

Organized by our lead analyst for the consumer value chain, Steve Steutermann, this track will prepare supply chain officers and senior operations executives for the new fundamentals of supply chain success. The track kicks off with a presentation and leadership panel on the stages of value chain transformation. It then continues with sessions providing insights and case studies around best practices in supply chain segmentation, developing talent and managing demand-driven global manufacturing operations.

Supply Chain Planning
In our 2010 study on supply chain management, demand variability and forecast accuracy top the list as the greatest obstacles to achieving supply chain goals. While a perfect forecast may be the ultimate goal, we see leaders implement better demand sensing and shaping to improve their supply chain planning process. This pursuit of excellence moves beyond just process and extends into how value chain functions are organized and measured to drive performance.

Noha Tohamy leads our cross-industry demand planning research, and has brought together a team to help supply chain planning executives understand the needs and challenges of next-generation planning organizations. Retail analyst Mike Griswold will start this track by addressing the sales and operations planning (S&OP) challenges facing this industry. A sampling of later sessions includes the latest research on achieving advanced maturity stages of S&OP and supply planning, maximizing value across product life cycles, and techniques for sensing and shaping demand.

Sourcing and Procurement
Supplier management is more strategic than ever as companies seek deeper relationships with their partners. In a recent Gartner study, a closer collaborative relationship was the top and most successful method utilized to shorten new product time to market and mitigate supplier failure. We expect suppliers to become more ingrained in helping their customers deliver product innovation. Supply risk will remain top of mind, highlighted by the recent events in Japan that shut down supply lines across the high-tech and automotive value chains.

This track, organized by lead supplier management and sourcing analyst Mickey North Rizza, will help supply chain sourcing and procurement executives master the new sourcing realities and complexities of today’s global supply network. The session starts with a look at sourcing and managing supply chain service providers, led by our supply chain services analysts Dana Stiffler and Mike Dominy. The track then moves on to address the top issues that supplier management professional are facing, including multiple panel discussions with supply chain leaders from the Gartner Supply Chain Top 25. The discussions and sessions include sustainable sourcing, trends in manufacturing outsourcing, predictive analytics in supplier performance and risk management, sourcing’s role in new product introduction, and low-cost country sourcing strategies.

Distribution and Logistics
Logistics costs represent more than 10% of product-centric company revenue, and while traditionally viewed as simply a cost of doing business, best-in-class firms now recognize the strategic importance of global logistics. We’ve seen companies improve service levels, while realizing 15% to 30% cost savings, by applying segmentation and network design techniques to their logistics operations.

Global logistics analyst Dwight Klappich will lead a team to present on the latest strategies for managing advanced global logistics operations. A highlight of this track will be results from the latest Gartner study on supply chain user wants and needs. Later sessions will address topics such as global logistics strategy, managing third-party logistics (3PL) providers, customer experience measures, cost-to-serve analysis and tracking the logistics supply chain.

Supply Chain IT
Managing a global end-to-end supply chain isn’t possible without the technology to enable it. However, we continue to see technology projects for supply chain implemented in silos that often suboptimize benefits to the broader value chain. Part of the challenge is the technology itself, but quite often, issues point back to organization and alignment to business goals. Addressing this task starts with defining an architecture that supports a demand-driven value network (DDVN) where service levels are defined by customer segments and the appropriate process and technology deployed.

This track will show supply chain IT leaders how to leverage new technologies for integration, collaboration, transparency, traceability and sustainability in the global supply chain. It was coordinated by Simon Jacobson, who has extensively researched the alignment of manufacturing and business IT to support DDVN. Supply chain analyst Tim Payne will open with an overview on getting the best technology for your supply chain. Later sessions will then drill deeper into topics such as transformation, IT and business organization, leveraging the cloud, track-and-trace solutions, the convergence among digital content, IT and operational technology (OT), the emergence of sustainable business systems, and operations intelligence.

We anticipate a great event where supply chain leaders can network with peers, while also drilling into the latest research on supply chain. This note should get you thinking about how to best derive the greatest benefit from the many sessions available. We look forward to seeing you at the conference and working together toward achieving supply chain excellence in all industries.”

Comments Off

Category: AMR Supply Chain Top 25 Demand Sensing and Shaping Digital Supply Chain Emerging Markets Supply Chain Risk Management     Tags: , , , , ,

Big Earnings Announcements… Implications for 2011 AMR Supply Chain Top 25

by Matt Davis  |  February 22, 2011  |  Comments Off

It’s that time of year again… when Q4 earnings announcements have hit full stride and we get insights into complete fiscal year performance.  As with any other year, there were some big winners mixed with other big misses.  One thing caught my eye in several earnings announcements… CEO’s talking SUPPLY CHAIN.  As I read through messages in the earnings statements, supply chain appeared as a key enabler of performance and strategy.  Here are a couple examples…

  • CEO Michael Dell upon record 2011 results:  “Our strategy around the efficient enterprise and flexible supply chain continues. … Client profitability improved notably in the second half of the year driven by solid supply-chain performance, lower input costs and improved product quality.”
  • Ecolab after record 4th quarter results:  “Major initiatives include … significant realignment of the supply chain, including repositioning of the warehousing networks, better leveraged purchasing capabilities, formula and packaging simplification, manufacturing consolidation and streamlined support functions.”
  • On an earnings call with Raytheon’s CEO, Jim Swanson:  “From our standpoint we see plenty of opportunities in the company.  There’s a lot of effort going on in our supply chain side of the business …. What we’re going to be working on [is giving] our suppliers better visibility into what we’re doing … where they can align up their investments with our investments to make sure we continue to deliver the best value to our customers.”

While a focus on operations to drive efficiency is nothing new, it is both interesting and exciting to see CEO’s saying supply chain is a direct enabler of top level corporate strategy.  Just where I think it should be… as well as a key premise of the annual AMR Supply Chain Top 25.  As a former employee of a consistent top 5 player in the Top 25, I was quite familiar with the results before joining Gartner.  But I’ve learned even more about it as an analyst. 

So I thought it would be fun to sit down to informally interview Debra Hofman, who runs the annual research, on the details of how it’s done, how innovation plays a role and what she’s learned over the years.  I also asked her what she would like to share with readers of this blog.  Here’s a transcript from our chat…

Matt:  Can you provide some quick context on the Supply Chain Top 25 for those who may be unfamiliar with it?  What is it? How is it used? Etc..

Debra:  The Top 25 is AMR’s annual ranking of the best supply chains among manufacturers and retailers in the Fortune Global 500.  This is the 7th year of the ranking, and we’ll be publishing the 2011 list at the beginning of June.  The basic goal of the ranking is to highlight leadership in something we at AMR call the “Demand-Driven Value Network” – who are the companies that are farthest along toward being demand driven.   We’re very transparent about the way we come up with the ranking:  every company on the list (224 last year) gets a composite score that‘s made up of 3 financial metrics (ROA, Inventory turns and Revenue Growth) and 2 voting pools – one voting pool is our supply chain analysts, and the other voting pool is a Peer Panel made up of supply chain executives from across a spectrum of industries (last year we had 154 peer voters).  The Peer Vote – which represents 25% of each company’s composite score – is a key component in that it reflects the opinion of the supply chain community.  It’s open to supply chain professionals at any manufacturer, distributor or retailer.  We allow one vote per company, and the vote itself is a simple web form that takes about 15 minutes. 

Matt:  What do you think about CEO’s talking supply chain at earnings announcements?  Is this new? 

Debra:  It’s an exciting trend that we’re starting to see more and more.  Not just the use of the term “supply chain” at the highest levels, but the recognition that being good at it drives shareholder value. A few years ago when we started doing this, we used to get asked all the time for proof of the connection between supply chain and company performance, and we could point to some studies and data that supported it.  We don’t get asked that question as much anymore.  I think we’ll see that recognition continue to grow – recognition at the highest levels that the combination of operational excellence and innovation excellence is the signal to Wall Street that these are the companies with more robust growth engines and higher earning capacity.

Matt:  Is the Top 25 global?

Debra: It is global.  The way we compile the list of companies is from the Fortune Global 500, which is a global list of companies – it’s different from the Fortune 500 which is just US companies.   But we often hear from supply chain communities around the world that the list looks very US centric, and that’s true.  A big part of the reason for that is actually the composition of the voting community – the peer voters have been predominantly based in the US.  That’s not our preference.  We would love to ratchet up worldwide representation.  In fact, we’ve seen increasing excitement and interest in the ranking from the European, Asian and Latin American supply chain communities.  So, if you’re a supply chain executive at a manufacturer, retailer or distributor in any of those regions, we welcome your  involvement, and encourage you to add your perspective, make your voice heard – register to vote! (just contact   

Matt:  So what supply chain innovations caught your eye this year? 

Debra: Every company in the Top 25 has their own vision and strategy, and is focused on their own set of key initiatives, whether it’s improving their forecasting capabilities, strengthening their sales & operations planning process, or segmenting their supply chains.  But there are a few themes that we see consistently across the leaders: outside-in thinking, embedded innovation, the use of metrics to drive tradeoffs and balanced excellence, a focus on building and retaining a killer pool of supply chain talent, and most importantly a culture that is obsessive about always taking it to the next level.  Another interesting thing:  The consumer and high tech industries have typically gotten a lot of attention, but we’re seeing a lot of companies in the industrial value chains – those more traditional, asset-intensive industries like chemicals and mining and heavy equipment manufacturers — catching up and in some cases moving beyond.  Watch our website for highlights of these companies:

 Matt:  What’s been the biggest thing you’ve learned over the years working on the Top 25?

Debra:  That the definition of “excellence” is a complex topic indeed – there is much more to it than meets the eye.  We all feel like we know it when we see it, but generating debate of what it really means to be a leader is what the Top 25 is all about. 

Matt: Anything else we should know?

Debra: We hope the Top 25 is a platform that helps highlight best practices, and drives a lively flow of ideas, debate, and innovation across the worldwide supply chain community.  We welcome feedback, thoughts and suggestions on the methodology, the ranking and what supply chain leadership is all about.

So my thanks to Debra for spending some time with me.  As payback for her time, I promised I would provide some coordination details for this year’s survey…  If you’re interested in being a voter, please contact  If you’d like more information about the Top 25, go to:

Comments Off

Category: AMR Supply Chain Top 25 Demand Sensing and Shaping     Tags: , , , ,

Watson, First Step Jeopardy… Next Step Supply Chain?

by Matt Davis  |  February 16, 2011  |  1 Comment

For Jeopardy fans like myself, the last two nights of play have been quite different than the traditional matches.  Not just because the all time champs Ken Jennings and Brad Rutter have returned, but more because they are playing against a computer named Watson.  Watson can “read” questions, interpret meanings, find natural language relationships and answer questions with a precise confidence interval… all in the form of a question, of course.  So what if Watson ran your supply chain?

“Boring.” “What a waste of money.” “No computer will ever be smarter than a person.”  These were some of the comments posted under a story I just read about Watson.  And, while watching a computer rapidly answer questions with incredible precision while its human competitors stared off in frustration doesn’t make the best television, Watson is far from “boring.”  What is so fascinating about Watson’s capability is that it moves way beyond the search capability we’re currently used to.  Watson understands analogies, can find relationships in otherwise disparate topics and can rate the likelihood of being correct… all within seconds.  The implications for supply chain analytics are HUGE.

We’ve recently published several reports on demand sensing, pattern based strategy and social media for supply chain ( that hinge on being able to identify patterns.  Patterns in demand, customer preference, macro-economic factors, etc…  For example, many companies maintain an active social media presence to open a dialogue with customers on product features, trends in user communities and other “like” products that they’re interested in.  The problem with this data is that it comes from many sources, is in written “natural” language and is extremely difficult to group for meaningful analysis. 

In theory, Watson’s capabilities could be used to rapidly analyze all of that available data to decipher out meaningful analytics to guide strategy.  In addition, it could look for relationships within and across all of these disparate data sources to identify patterns. 

As they described Watson’s logic engine, IBM used an analogy of a doctor trying to make a diagnosis to describe Watson’s potential.  A doctor might have a hunch as to an expected problem, but has many different factors to consider.  Perhaps some even unknown.  Add onto that complexity with the reality that most medical records and notes are still hand-written and the ability to compare all of one patient’s data with the massive amount of data online seems impossible.  But what if the doctor could load the patient’s data into Watson which would then use its massive relational logic engine to find patterns in the data as a check of the doctor’s hypothesis?  Science fiction?  Maybe today… but you can clearly see the possibility as Watson fires away at questions that today’s search engine could never handle.

Now think supply chain… Maybe Watson reviews buzz on Facebook about new product launches of certain electronics and is able to tell an accessories provider to expect a huge spike in demand.  Or maybe Watson recognizes that when unemployment levels hit 10%, your company’s demand tends to fall by 4%.  When you consider the incredible amount of data available online, including all of the active social communities adding content daily, the possibilities are quite exciting.

Now, all of this said, it took so many servers to support Watson that they had to be housed offsite.  And Watson did have a couple incredible misses that seemed out of the blue.  BUT, the results speak for themselves so far.  At the end of the first round of play, Watson leads both players by over $20,000.  Watson’s short-term fate on Jeopardy will be decided this evening, but the long-term implications are enthralling.

What do you think?  Will computers ever be able to understand all the intricacies of human speech?  If so, when?  Do you see applications for your supply chain? Or is this all just a publicity stunt?

1 Comment »

Category: Demand Sensing and Shaping Digital Supply Chain     Tags: , , , ,