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Gartner Identifies Trends Impacting Top 25 Supply Chains


Delivering Customer Personalizations at Scale is Key Focus on Leaders, Gartner Says

May 27, 2019
SCDigest Editorial Staff

The analysts at Gartner are out with their top 25 chains for 2019, released with the usual fanfare less than two weeks ago.

Colgate-Palmolive tops the list for the first time – but that after Unilever, which was number 1 in 2018, was moved to the "supply chain masters" category, where it joins Procter & Gamble, Amazon, McDonald's and Apple in a sort of supply chain hall of fame that removes them from the top 25 rankings. (See Understanding the Gartner Supply Chain Top 25 2019.)

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Gartner notes that customer-focused "transformational" innovations may not deliver rapid ROI.

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Somewhat overlooked in the focus of the top 25 rankings themselves is the commentary that goes around it, notably trends among companies that make this year's list.

Gartner identifies three such trends:

Personalization at Scale: While Gartner notes that tailoring products to individual customer's needs is nothing new for supply chain, taking that to higher levels is a key differentiator for more advanced companies.

"There are levels of agility, supply chain flexibility and underlying technological capabilities that are required to successfully pull it off," Gartner notes.

Gartner cites cosmetics maker L'Oreal as an example. The company's Lancôme unit is using flexible, local manufacturing and agile logistics to enable 48-hour delivery of foundation makeup designed to specifically match the consumer's skin tone and skin structure.

Then there is Nike and its "NIKE By You" service that offers custom-made running and sport shoes through personalized selections of fabric, color, hardware and other product features, shipped to the consumer within a few weeks of ordering.

China's Haier offers a line of appliances, tailored to customer preferences and real-time visibility into the manufacturing process and customer delivery. Johnson & Johnson and others that are producing mass treatments at scale, highlighting a move toward more personalized medicines tailored to the biology of individual patients.

Leading companies in the supply chain top 25 have found the right balance between delivering truly customized product offerings and meeting specific needs through variety in finished goods, Gartner says.

Garter also says supply chain leaders are more disciplined about pruning unprofitable products from their portfolios.

Leveraging Ecosystems: "The leaders of large corporate supply chains recognize that the next major challenges they face cannot be solved within their four walls alone," Gartner says.

It then ties this ecosystem idea to sustainability, noting that this change in perspective and approach is part of leading companies' broader shift to run more purpose-driven supply chain organizations.

Gartner says examples of ecosystem partnership abound across industries. Dell, for instance, has successfully oriented its whole supply chain around serving customers through sustainable solutions in order to leave a "Legacy of Good" in the world. One pillar of this approach is a icircular economy partnership with the NGO NextWave and other companies, such as with General Motors to reduce ocean plastics.

(See More Below)



Unilever has programs focused on so-called "smallholders," family farms of 1 to 2 hectares. Unilever's strategy is driving "radical transparency" by shining a bright spotlight on the issues smallholders face, such as lack of know-how, capital and even land rights recognition in some countries. The approach is to partner with governments and NGOs and use a multi-tiered training and certification program to bring smallholders into the global sourcing mix for commodities such as tea and palm oil.

Business-Led Digital Strategies: We are in a digital wave, and top supply chains are leaders in adoption of new technologies, Gartner says.

However even leading supply chains were mostly experimenting with the wide range of digital technologies, from drones to "digital twins" of products and supply chain networks.

However, Garter says, in the past year the digital theme for top 25 companies centered on scaling winning solutions in the business. For example, P&G, Cisco Systems and PepsiCo have worked toward the goal of E2E synchronization from point-of-demand back upstream through manufacturing and supply.

Key, Gartner says, is the core concept of business-led digital transformation, "understanding and elevating customer needs and the operational performance points required to support them. This is accomplished by working backward from those requirements to the process and technological transformations that will enable them."

But Gartner notes that customer-focused "transformational" innovations may not deliver rapid ROI.

Smart or connected products is clearly part of this mix, which Gartner says are often developed as part of rethinking the larger business model.

So there you have it, three key themes Gartner says are driving the agendas of the top supply chains.


Any reaction to any of these Gartner trends? Which if any did you like best and why? Let us know your thoughts at the Feedback section (email) or button below.




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