The global electronics supply chain has historically been a leader in terms of innovative and effective supply chain management. This year, Gartner’s Global Supply Chain Top 25 highlights that reality, with 10 out of 25 organizations being related to the high-tech and industrial sectors as an OEM, component maker or distributor.
The annual ranking, which is created based on a combination of business performance and opinion, identifies leaders in the supply chain and highlights their best practices. Gartner analysts derive a list of companies from a combination of the Fortune Global 500 and the Forbes Global 2000. Each potential winner has an annual revenue of at least $12 billion.
Tech Companies in the Gartner Supply Chain Top 25 for 2022
Note: Composite Score: (Peer Opinion*25%) + (Gartner Research Opinion*25%) + (ROPA*15%) + (Inventory Turns*5%) + (Revenue Growth*10%) + (ESG Component Score*20%)
Source: Gartner (May 2022)
Cisco Systems has nabbed the top spot for a third year in a row, with Schneider Electric claiming second place. “Cisco continues to adapt in various ways to the changing environment, and its supply chain moves in alignment,” said Mike Griswold, vice president team manager with the Gartner Supply Chain practice. “ESG is a big focus, with circular concepts incorporated in the design, operations and consumption aspect of the products and the supply chain.” Two newcomers to the list represent the technology sector: Microsoft and Siemens.
Since 2015, Gartner has identified supply chain masters and Apple has qualified for the distinction every year since. “All of the masters provide prime examples of how to deliver agility and responsiveness at scale for sustained periods of time,” Griswold added. “Other chief supply chain officers (CSCOs) can look to them and the other organizations in the ranking to learn their best practices.”
As an organization, Apple has managed its supply chain scale across suppliers, outsourced manufacturers and logistics partners, according to Gartner. The company has invested in vertical integration of key components and has brought more component design in house. Apple has also announced its intent to become carbon neutral across its supply chain and products by 2030.
Gartner identified some common factors amongst masters and the top 25. These organizations drive new business models, sustainability efforts and commercial innovation. In the face of huge disruption, these leaders have also focused on agility and reacted quickly to address challenges as they arrived.
These businesses are also ambitious in terms of sustainability and are taking on emission reduction efforts in measurable ways. “In the high-tech industry, circular economy models are gaining in popularity,” Gartner noted. “Companies such as Cisco, Lenovo and HP are redesigning their broader business models away from the periodic sale of discrete pieces of equipment to service-based models that include the responsible collection, recycling and disposal of end-of-life products.”
Finally, digital automation investment is a top priority for these leaders in the supply chain, with organizations making both long term investments in automation as well as more immediate initiatives to reduce employees’ workload. Although not a tech company, Nestle’s investment in technology has enabled a proactive, rather than reactive, response to disruption.
Supply chain agility considers a number of factors, according to McKinsey, such as end-to-end transparency, risk management, supplier/logistic network redundancy and even holding inventories of critical parts. Since the onset of Covid-19, more businesses are seeking to digitize their supply chains, analysts have noted. Still, analyzing the ROI of such investments remains a challenge for CSCOs.