The Gartner Supply Chain Top 25 for 2012

2012 marks the eighth year of our annual Supply Chain Top 25 ranking. The list includes some perennial leaders, but also offers up four new companies from which to learn, including two industrials, and an interesting newcomer to the top five.

At its core, the Supply Chain Top 25 is about demand-driven leadership. Every year, Gartner identifies the companies that push the envelope of supply chain innovation. Our goal is to raise awareness of the supply chain discipline, as well as how it impacts the business, and to catalyze the debate and the cross-fertilization of ideas about what supply chain excellence really means.

Each year, our analysts talk to and research the supply chains of hundreds of companies, delving into the issues within plan, source, make, deliver and return, as well as the broader strategies, visions and missions across the value chain. Through these discussions, we note the trends: What are the leaders focusing on, where are they investing time and effort, and what can be applied broadly?

Last year, we noted that companies were starting to invest in resources and assets again, reflecting a newly recovering economy. This year, that trend continues even more strongly, with many companies investing for growth. The global economic recovery has been uneven and halting in some cases, but, on balance, the result has been expansionary for companies’ bottom lines and outlooks.

The financial results of the companies on our broader list bear out this trend. Average annual revenue growth increased 29% over the previous year, a welcome change from the negative average seen in 2009. Even more telling: Of the 298 companies in the study this year, the percentage with negative annual growth fell from 65% in 2009 to 28% in 2010 and 15% for the 2011 fiscal year.

At the same time, both average ROA and net profits improved by more than 50% in 2010, and then stabilized this year, signaling profitable growth. Although first-quarter 2012 financial results are not included in this year’s ranking, they demonstrate continued growth as the number of S&P 500 companies reporting earnings higher than expectations was nearly 70%, compared to the long-run average of 62%.