Thriving Amid Disruption: The 2023 Supply Chain Top 25

During the past few years of heightened disruption, the focus on, and recognition of, supply chain value increased. Leaders recognized that their supply chain is equally important to business success as sales and marketing or R&D/product development. Amid ongoing heightened risks, supply chain leaders must focus on seizing new opportunities while transforming how their organizations work. CSCOs will need to draw on new skills and new capabilities to deliver optimized network performance, a balanced energy and sustainability path and reenergize their people in the face of ongoing disruption.

Three Major Trends

Gartner’s Supply Chain Top 25 for 2023 highlights how leading companies use data to develop scenarios, assess risks and leverage technology to take some of the strain off and reduce complexity within their supply chains. Companies reflected in the Supply Chain Top 25, have recognized, and embraced, three macro trends:

• Identify and Seize New Opportunities — Business growth remains CEOs’ top business priority for 2023, even as uncertainties mount, including inflationary pressures, volatile economic growth rates, environmental sustainability pressures and geopolitical upheaval. Successful companies achieve their growth goals through collective executive responsibility for driving growth, bringing together all functions. And supply chains are an increasingly critical part of that. Leading CSCOs are proactively focusing on the role their supply chains can play to drive up customer retention in existing markets through satisfaction and ease as well as by supporting commercial innovation to unlock new growth opportunities as a partner with their C-suite colleagues. Of course, this comes with a continued — and, in fact, a heightened — focus on managing risk. We see leading supply chains leveraging their resilience to exploit emerging opportunities quickly through disruption.

• Transform the Way Organizations Work — Leading supply chains are redefining the skills, roles, relationships and structures within their organizations by accelerating cultural transformation and innovation. They are focusing on creating a new intersection of people and technology with new approaches to job design. Why reward hard work? The leading organizations are rewarding the elimination of hard work by leveraging technology to boost productivity through physical and logical automation, and via decision automation and execution. Those who are getting this right have recognized the reality of employee fatigue and have supported their workers in the adoption of AI and other new tools so that these are placed in skilled hands and enable more employee autonomy and flexibility while delivering enhanced productivity.

• Drive Collective Progress — Supply chains have a tremendous opportunity to drive individual and collective progress, particularly in ESG. By working together across industry partners, organizations can achieve their own individual goals and move entire industries towards key challenges such as achieving net zero and enabling the circular economy. CSCOs are achieving valued goals by shifting from a one-to-many network approach and recognizing the interconnectedness by actively adopting a many-to-many ecosystem model. Enlightened leaders are developing partnering and data-sharing capabilities while shaping mindsets, and governance, to build enterprise-, platform- and purpose-centric ecosystems founded on trust. These can not only be used to address key challenges like sustainability, but can also enable improved resilience, cost and customer experience and speed up innovation by partnering with pooled resources, shared capabilities and data for insight.

The Role of the Supply Chain Top 25

This year marks the nineteenth time Gartner has published the Supply Chain Top 25. The role of the Top 25 is to continue to emphasize the positive impacts supply chains are having in the world and elevate the supply chain function and profession across our community, within corporate boardrooms and for the investment sector at large. The research also provides a platform for cross-pollination of ideas, presents the opportunity to learn from leading organizations and raises the bar of performance for everyone in supply chain management. These leading companies embrace the concepts of an end-to-end orientation of their supply chain as well as recognize the importance of environmental, social and governance (ESG) activities. Top organizations realize that while profits are important, equal focus must be placed on people and protecting the planet.

When asked “What does a good supply chain look like?” or “Who are supply chain leaders?” Gartner analysts turn to The Gartner Supply Chain Top 25. Since 2003, we’ve been highlighting the importance of this end-to-end orientation journey and the shift from insular, supply management functions to an outside-in perspective that orchestrates a profitable response to demand. We reflect this aspect of leadership through a quantitative ESG measure (20% of the scoring), first added to our methodology in 2016.

Congratulations to the Gartner 2023 Supply Chain Top 25 and Masters.

^Notes

<sup>1. Gartner Opinion and Peer Opinion: each panel’s forced-rank of the top 25 companies based on end-to-end supply chain maturity, leadership and visibility, and commitment to ESG
2. 3-Yr Weighted ROPA: ((2022 operating income (net of extraordinary accounting adjustments) / 2022 total physical assets (property, plant, equipment and inventory))*50%) + ((2021 operating income (net of extraordinary accounting adjustments) / 2021 total physical assets (property, plant, equipment and inventory))*30%) + ((2020 operating income (net of extraordinary accounting adjustments) / 2020 total physical assets (property, plant, equipment and inventory))*20%)
3. 3-Yr Weighted ROPA Change: ((change in ROPA 2022-2021) *50%) + ((change in ROPA 2021-2020) *30%) + ((change in ROPA 2020-2019) *20%)
4. Inventory Turns: 2022 cost of goods sold / 2022 quarterly average inventory
5. 3-Yr Weighted Revenue Growth: ((change in revenue 2022-2021) *50%) + ((change in revenue 2021-2020) *30%) + ((change in revenue 2020-2019) *20%)
6. ESG Component Score: Index of third-party environmental, social and governance measures of commitment, transparency and performance
7. Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROPA*15%) + (Inventory Turns*5%) + (Revenue Growth*10%) + (ESG Component Score*20%)</sup>

^{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.}

Clients interested in learning more about Gartner’s Supply Chain Top 25 for 2023 can read the following:

The Gartner Supply Chain Top 25 for 2023: Methodology
The Gartner Supply Chain Top 25 for 2023: Masters, Top 25 and Industry Leaders
The Gartner Supply Chain Top 25 for 2023: Insights on Leaders

Mike Griswold
VP, Team Manager
Gartner Supply Chain
Mike.Griswold@gartner.com