Last week, industry analyst firm Gartner announced its Top 25 Supply Chains Ranking for the Asia Pacific Region, which deserves some commentary on our part. 

Supply Chain Matters has in the past been a bit critical of Gartner for not including Asia Pacific based supply chain organizations in its global rankings of Top 25 Supply Chains.  Gartner responded by re-positioning its rankings among major global regions, which although has obvious connotations for further client business development in succinct global regions, none the less affords demonstrated supply chains competencies greater recognition when ranked on a regional basis. We praise Gartner for it efforts to provide broader recognition of supply chains in the Asia Pacific region.

According to the Gartner report (free registration required in order to download), supply chain resilience is high on the agenda for most Asia Pacific based supply chains along with rising costs, a shortage of talent and increased regulatory pressures. Volatility in demand, particularly from western based companies, continues to present challenges for these Asia Pacific based teams.  According to Gartner, the three year weighted average of revenue growth slowed to 25 percent.

Five new organizations move into the top ranking, while others moved-up in ranking.  It should be of no surprise that Samsung was ranked the number one supply chain for Asia Pacific in 2013 because of its efforts in innovation and supply chain talent development. Lenovo was ranked as number two, moving up two spots from 2012, gaining high marks for revenue growth and deployment of a hybrid supply chain model.  Supply Chain Matters has featured two previous commentaries of Lenovo’s unique supply chain process capabilities, along with its recent announcement of U.S. manufacturing presence.

The top five further includes Haier (Number #3), Hyundai Motor (Number #4) and Tata Motors (Number #5).  Toyota Motor came in at Number #6, jumping 11 positions from its former 2012 ranking based on volume recovery from a series of major supply chain disruptions. Honda Motor was ranked Number #8.

We found it quite interesting to observe four automotive industry supply chains ranked in the Asia Pacific top ten, when no automotive supply chain is ranked in the Gartner global top ten.

We also expected to see more global contract manufacturers appearing in this ranking. Singapore based Flextronics moved into the top ten for the first time, attributed to strong financial results along with advanced planning and risk mitigation capabilities. Remarkably missing from the latest top ten ranking is Foxconn or its parent Hon Hai Precision, which is a prime manufacturing contractor to the 2013 global number #1 ranked supply chain of Apple.  That deserves some explanation and we were disappointed that we could not retrieve any explanation from Gartner as to why. Also missing was Jabil and Taiwan Semiconductor Manufacturing Company (TSMC), which by our view, deserve top ten recognition.

Cannon and LG Electronics round out the 2013 Gartner Top Ten, reflecting that High Tech, Consumer Electronics and Automotive are the sole industries represented in the Asia Pacific Top Ten supply chains.  Perhaps a future ranking will include recognition of a consumer goods and/or diversified discrete manufacturer or retailer in this region.

Gartner concludes: “The ability to segment supply chains that are aligned to different customer expectations, backed by improved cost-to-serve, will differentiate the leaders from the followers. Supply chain leaders in Asia Pacific must enhance collaboration capabilities to integrate internal functions and key external trading partners across the value network.” 

Supply Chain Matters would hasten to add that given the prior history in the region for potential major supply chain disruption brought about by natural catastrophe or extreme weather events, that investments in supply chain risk mitigation, more predictive capabilities and enhanced end-to-end visibility should also be a part of this message for future performance.

What is your view regarding Gartner’s current ranking of Top Asia Pacific Supply Chains? Agree or are there omissions?

Bob Ferrari