Friday 25th October, 2013

As reported in Supply Management, The Gartner Supply Chain Top 25 has Unilever achieving first place in Europe and Apple coming top worldwide. Interestingly in the same week, Unilever issued a profit warning because of a slowdown in sales in emerging markets that sent its share price sharply downwards. This was largely due to currency swings, which have undermined the competitiveness of their products in important new markets. At a first glance, these two pieces of news seem contradictory, but on closer inspection that might not be the case. The key question is how the Gartner report measures what makes a best in class supply chain.

The Gartner ranking is made up of five elements, two subjective and three data driven. These are: peer opinion (25 per cent); Gartner opinion (25 per cent); return on assets (25 per cent); inventory turns (15 per cent) and revenue growth (10 per cent). Unilever is a strong performer across all the data driven measures but based on these alone would probably not have the top spot in Europe. It performed strongly on the two subjective measures, being recognised for having implemented a range of end-to-end supply chain initiatives, including segmentation, advanced cost to serve and logistics control towers. The focus on the end-to-end supply chain is likely to have allowed them to predict the impact of currency changes earlier than other companies, so perhaps these two pieces of news are linked rather than being contradictory. Read More