McDonald’s Joins the “Masters” Category as it joins others in embracing “digitization”.
Gartner, Inc.’s annual Supply Chain Executive Conference held last week in Phoenix, AZ provided the platform for the release of its Supply Chain Top 25, which identifies industry “best practices.”
Unilever scored the top spot for the third year in a row, followed by Inditex, Cisco, Colgate-Palmolive, and Intel. Home Depot rejoined the ranking after a three-year hiatus, while Novo Nordisk and Adidas joined the Supply Chain Top 25 for the first time.
“The ranking consists of an impressive group of leaders with valuable lessons to share, including three recent entrants from the life sciences, retail and consumer products sectors,” said Stan Aronow, research vice president at Gartner. Longtime supply chain leader and last year’s runner-up McDonald’s joined Apple, P&G, and Amazon in qualifying for the “Masters” category, which Gartner introduced in 2015 to recognize sustained leadership over the last 10 years.
Guy Courtin, vice president of industry & solution strategy for Infor Retail, was among those executives attending the Gartner event. He told SCMR in an interview that the “main takeaway” for him was the discussion on digitization. “At this point, a retailer has either embraced it completely or has accelerated plans to implement it soon. For the laggards, it may be too late.”
He said that the same holds true for the food services industry, which was echoed by Gartner:
“The key to McDonald’s success is skillful orchestration across a network of strategic suppliers, service providers and thousands of companies and franchise-owned stores worldwide,” said Aronow. “The company is also experimenting with digital supply chain capabilities like augmented reality to manage storerooms, so staff can spend more time with the customer.”
CSR Component Score5
|18||Johnson & Johnson||880||322||6.2%||2.7||2.8%||6.00||3.08|
|22||The Coca Cola Co.||1,558||221||4.6%||4.8||-10.1%||4.00||2.87|
- Gartner Opinion and Peer Opinion: Based on each panel’s forced-rank ordering against the definition of “DDVN orchestrator.”
- ROA: (2017 net income/2017 total assets)*50% + (2016 net income/2016 total assets)*30% + (2015 net income/2015 total assets)*20%.
- Inventory Turns: 2017 cost of goods sold/2017 quarterly average inventory.
- Revenue Growth: (Change in revenue 2017-2016)*50% + (change in revenue 2016-2015)*30% + (change in revenue 2015-2014)*20%.
- CSR Component Score: Index of third-party corporate social responsibility measures of commitment, transparency, and performance.
- Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROA*20%) + (Inventory Turns*10%) + (Revenue Growth*10%) + (CSR Component Score*10%). 2017 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.
Three key trends stand out this year for supply chain leaders that are accelerating their capabilities, separating them further from the rest of the pack.
Focus on Customer Experience
Gartner defines the customer experience (CX) as the customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, channels, systems, and products. Companies recognize that their customers are heavily influenced by their supply chain experience — a late delivery disappoints, an expedited delivery delights.
“Many leading supply chains are using digital connections with customers to better understand their use of products, predict future demand and more quickly respond to issues, even before they appear,” said Mr. Aronow.
Scaling Digital Supply Chain Capabilities
After the first round of experiments, leading companies are scaling the most viable digital supply chain solutions in factories, warehouses, and corporate back offices. While automation is most common in manufacturing and logistics, there has also been an explosion in digital customer service. This includes RPA in the order-to-cash cycle and the use of trained artificial intelligence (AI) customer service chatbots that customers may mistake for a human, due to their use of natural language.
Moving to Circular Supply Chain Designs
Leading companies have changed their mindset when it comes to environmental sustainability. Advanced supply chains now take a lifecycle-based approach to understand the total impact of products and operations across the value chain.
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