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February 21, 2020 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Another View of the Best Supply Chains 2020
bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Distribution Digest/Green Supply Chain
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet Expert Columns bullet On Demand Videocasts

The Best Solutions.
The Latest Equipment & Technologies.
The Smartest Thinking.


first thought


Supply Chain Graphic of the Week
Ocean Cargo Ships Increasingly at Risk Due to GPS Interference

Amazon Delivery Service Partner Ranks Culled
Pricing Warehouse Robots Lower than Human Costs
Big Drop in Trucking Volumes, Rates


US Industrial Robot Shipments Fell in 2019


January 27, 2020 Contest

See the Full Image and Send in Your Entry Today!



Feature Story: More Evidence Piece Picking Robots are almost Here


pic GSC Feature Story:Increased External Focus on Sustainability at Amazon, but will Consumers Live with Slower Deliveries?

The State of Retailer-Vendor Supply Chain Relationships 2020

Are Things Getting Better and More Collaborative - or Heading in the Other Direction? Third Biannual Study - Please Participate


Weekly On-Target Newsletter:
February 19, 2020 Edition

Cartoon, Advanced S&OP, More Piece-Picking Robots, RFID Theft, More

Supply Chain Transformation - The Need for Speed

by Henry Canitz
Product Marketing & Business Development Director

The PO Lifecycle is Key Concept in Vendor Performance Management

by Richard Wilhjelm
VP Sales and Marketing
Traverse Systems

"Will the Real Digital Twin Please Stand Up?"

by Gary M. Barraco
Global Product Marketing


A test involving Walmart and Warner Lambert in the late 1990s led to what well-known supply chain process?

Answer Found at the
Bottom of the Page

Another View of the Best Supply Chains 2020

Last summer as usual, I summarized both the results and the methods use by Gartner to compile its famous Top 25 Supply Chain list for 2019, right after it was published. Gartner has added on to an approach first started by the former AMR Research in 2004, after Gartner acquired AMR in 2009.

The top 25 list of course generates much interest, and companies that make it naturally tout that honor. As I noted in my column, I occasionally get calls from companies looking for advice on how to make the top 25.

Let me first say that I do not have a better way to compile a top supply chain list than the way Gartner does it. Only limited information is available for analysis - no one is sharing cost information, as just one example.


Ratings from counterparts at trading partners seems about as good an input that you can get to gauge supply chain excellence.


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That said, there are a number of critiques that I think can be fairly leveled at the process. Those include:

Only large companies of $12 billion or greater revenue are considered.

The way the financial metrics are used does not necessarily connect with supply chain excellence. Does Apple's huge revenue growth really stem primarily from supply chain excellence? Should McDonald's benefit in the rankings because its business model with outsourced food service providers and daily deliveries give it a huge number of inventory turns versus most companies? Even the return on assets metric gives advantage to companies that have outsourced their supply chains and thus have a lower assets base. But that strategy doesn't necessarily deliver a superior supply chain.

Even the so-called peer rankings, under which about 160 persons (I assume Gartner clients) ranked the top supply chains (well not really the best supply chains, but those that are tops in "demand driven value network orchestration," a rather unclear criterion) is a bit suspect. How does anyone really know whether say pharma company Novo Nordisk (which made the top 25) has a better supply chain than say Target stores (which did not)? Is the ranking based on just public perception, vested interests in the outcome, something else?

The same observation could be made for the 38 Gartner analysts that performed a similar company ranking. These analysts clearly have a broader view of supply chain activities than the average peer group participant, but not even these experts could possibly really know how to rank performance across 300 supply chain candidate companies.

Finally, 10% of the Gartner total formula is now comprised of a corporate social responsibility (CSR) score obtained from third party sources. CSR may be a good thing, but certainly many aspects of these CSR scores are disconnected from what we normally think of as supply chain performance.

I think these are all fair critiques, yet I understand Gartner's position in terms of a lack of other data and and no obvious way to address these questions.

Well, there is actually another way. That is to directly ask companies that should be in the know about the supply chain performance of other companies, as they have on-going experience as trading partners.

That is the approach that Kantar Consulting has been taking for many years in its annual PoweRanking report, the latest of which was delivered in late 2019.

The full study covers a number of company performance measures for both consumer goods manufacturers and retailers, including such areas as brand power, marketing programs, sales teams, overall business fundamentals, and more. Supply chain management is one of the categories included in the survey.

The rankings for this year, as always, were developed through the interesting methodology of asking retailers to rate manufacturers on each of these categories, and manufacturers to rank retailers on a similar set of attributes.

Both manufacturers and retailers are mostly from the consumer packaged goods, food and beverage areas. That means manufacturers in such categories as apparel/soft goods, electronics, hard goods, etc., are not included. Similarly, the participating retailers are drawn exclusively from sectors such as mass merchandise, traditional grocery, warehouse clubs, convenience and drug store chains that focus on consumer packaged goods sales, and does not for example include department stores or most specialty retail areas.

Most major CPG companies and retailers take part, with about 80 retail company participants and 50 manufacturers.


For the last few years, however, has been included in the retail group. And this year, such companies as Ace Hardware, Newell Brands, and Kohl's participated, though they are outside CPG.

The scores represent the percentage of respondents that place a given manufacturer or retailer as having one of the top three supply chains in the industry.

So the analysis pool is limited to CPG type companies and their retail channel partners. That said, below are the top rated consumer goods supply chains for 2019:

Top CPG Supply Chain from Kantar PoweRanking Report 2019

See Full Image


Just to be clear, the results say that 47.8% of retailers placed PepsiCo as having one of the top three CPG supply chains, as did 34.8% of retailers for number 2 Coca-Cola, etc.

Interesting, as always - and naturally leading me to wonder how these results compare to the Gartner Top 25.

Among the top rated overall supply chain across all companies by Gartner were CPG manufacturers Unilever and Procter & Gamble, placed in a separate class called "supply chain masters" for long term excellence. P&G is number 3 and Unilever number 6 on the Kantar ranking

Those two companies aside, Colgate-Palmolive was the number 1 ranked supply chain across all companies by Gartner, but alas Colgate does not even make the Kantar top 10 list of just CPG manufacturer supply chains, as rated by their retail customers.


There are other such discrepancies. Nestle is the second ranked CPG supply chain in the Gartner list, but number 5 in Kantar, just behind General Mills, which is no where in the Gartner top 25.

A somewhat similar story on the retail side, though the comparisons are more difficult:

Top Select Retailer Supply Chain from Kantar PoweRanking 2019 Report

See Full Image

Walmart runs away with it, with a 84.9% score. On Gartner, Amazon has also been placed in the supply chain masters category, and thus was not included in the actual top 25 for 2019. But in the Kantar rankings, based on CPG company ratings, Amazon is number 5, behind Walmart, Costo, Publix and Kroger and just ahead of number 6 Target.

Of those five retail companies on Kantar (top six minus Amazon), only Walmart made the Gartner top 25. Target gets some justice in the Kantar rankings, in my opinion. It could be the retailers don't make the Gartner top 25 due to lower profit margins than the manufacturers, and have a tougher time driving revenue growth through acquisitions.

How to reconcile these differences? Don't know. The methodologies are totally different, so different results should be expected. But ratings from counterparts at trading partners seems about as good an input that you can get to gauge supply chain excellence.

Thanks to Kantar for again supplying me with its report, which is not publicly available.


What is your reaction to these comparisons between the Gartner and Kantar lists? How would you improve the Gartner approach? Let us know your thought at the Feedback section below.


On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon.

Now Available On Demand

On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


We received several emails on Gilmore's First Thoughts column on Can - and Should - US Manufacturing be Saved 2020?


The offshore trend over three decades has been an overall disaster for the US economy and large swaths of the country, such as the Midwest.


My hats off to these two commentators who are finally calling the situation for what it is.


Ron Grove

I think the issue is more complex than what Kota and Mahoney say, but at the same time this is a perspective that oddly is not argued more often?


Why isn't the National Association of Manufacturers (NAM) leading a similar charge?


David Smeltzer
Barberton, OH


I had no idea US government investment was being used to in effect the movement of jobs to China and elsewhere.


Why isn't this some type of public scandal?


I completely agree that laws should be enacted that "would ensure any licensee of federally funded research results should be required to manufacture at least 75% of the value added in this country."


Dale Springer


Q:A test involving Walmart and Warner Lambert in the late 1990s led to what well-known supply chain process?

A: CPFR - Collaborative Planning, Forecasting & Replenishment.

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