Top 10 supply chains in Europe
Gartner based its rankings on various criteria including return on assets, corporate social responsibility, and revenue growth.
The organisation commented that some common themes were evident in the top companies listed below. These included:
- Global scale, local responsiveness: The companies on the list deal with their many sites and suppliers by allowing flexibility in how goals are achieved in different markets. Gartner suggested a combination of global and local manufacturing distribution was key.
- Multiple models though segmentation: The companies have many product categories, emerging markets and channels, and use segmentation to create a portfolio of standard models. This helps them deal with complexity and meet the needs of different end users.
- Collaboration: Collaborating across various networks to achieve strategy was important, whether with customers, competitors, governments or interest groups.
- Investment in talent and technology: The latest technology is necessary to execute strategy, and these companies use talented individuals, for example by building relationships with universities.
- Culture of excellence and master of change: The businesses are always transforming and dedicate resources to driving change.
10 | Diageo
The global leader in wine and spirits, Diageo has over 200 brands including Johnnie Walker, Bailey’s, Guinness and Smirnoff. Its brands are sold in 180 countries “at almost every price point, in every category to meet customer demand”. Having been founded in 1997, Diageo now produces over 6.5bn litres of its brands’ products every year, from over 100 manufacturing sites in 30 countries. In 2016, it achieved a return on assets of 8.9%. Diageo strives to “maintain high standards of integrity and social responsibility,” and earned a CSR score of 7.00. The company states that it tries to promote an entrepreneurial spirit, giving its 32,000+ employees the “freedom to succeed”, placing an emphasis on “diverse people and perspectives”. Overall, Gartner awarded Diageo a composite score of 2.57.
9 | BMW
With a 2016 return on assets of 3.7% and a revenue growth of 6.6%, BMW is showing positive signs of growth across 31 production locations in 14 countries. It works across three main segments: automotive, motorcycles and financial services. The company overall has 124,729 employees as well as 4,600 apprentices. BMW states its goal is to “set trends in production technology and sustainability as an innovation leader with an intelligent material mix, a technological shift towards digitalisation and resource-efficient production”. This has earned it a CSR core of 10.00 and Gartner awarded it an overall score of 2.62.
8 | L’Oréal
L’Oréal currently has a portfolio of 34 beauty and skincare brands which it supplies across all distribution networks: mass market, department stores, pharmacies, hair salons, travel retail, branded retail and ecommerce. It has experience revenue growth of 5.1% in the past year and in 2016 its sales reached $30.3bn. L’Oréal’s return on assets for the past year was 10.4%. With a dedicated research team of 3,870 people and 89,300 employees worldwide, L’Oréal says it is committed to “sharing beauty with all” and fulfilling its sustainability commitment for 2020. Gartner awarded the beauty company with a CSR of 5.00 and a composite score of 2.72.
7 | Schneider Electric
Schneider Electric is a French company that provides energy management and automation solutions. The company’s 10 commitments to sustainability helped earn it a CSR score of 10, as well as being named by Newsweek as the 10th most sustainable company in the world for 2016. Having made a 2016 revenue of $39.01bn, 41% of this came from new economies, and 5% of each year’s revenue is earmarked for research and development. Schneider employs 144,000 people in over 100 countries and last year made a return on assets of 4.2%. Other achievements include being number 24 of Fortune’s “50 companies that are changing the world” and being a DJSI Industry Leader for four years running. Overall, Gartner awarded Schneider Electric a composite score of 3.15.
6 | BASF
BASF provides chemicals, plastics, performance products and crop protection products as well as oil and gas across the world. Claiming to “create chemistry for a sustainable future,” BASF earned a CSR score of 10. The company currently employs 114,000 people around the world and emphasises good working conditions and inclusive leadership for its staff, as well as an ethos of trust, respect and dedication. BASF prides itself on innovating to align its business with the needs of the customer, striving to “offer innovative and sustainable solutions”. Overall, Gartner awarded BASF a composite score of 3.21. The company had a 2016 return on assets of 6.1%.
5 | Nokia
Nokia began as a paper mill in 1865, but has since diversified into several sectors such as cable, mobile devices, paper products, rubber roots and tires, and telecoms infrastructure equipment. Headquartered in Espoo, Finland, the company employs approximately 101,000 people and last year made $27.72bn in net sales. Nokia invested a total of $5.76bn in research and development in 2016, which prompted Gartner to award it a composite score of 3.32. It also gained a CRS score of 10.
4 | Nestlé
Since its foundation as Anglo-Swiss Condensed Milk in 1866 and merger with Henri Nestlé’s Infant cereal in 1905, the company has diversified into baby foods, bottled water, cereals and chocolate among other food and beverages. It now has over 2,000 brands and a presence in 191 countries. In 2016, the company’s total sales amounted to $92.15bn. Gartner awarded Nestlé a CSR score of 10 and a composite score of 4.10. At present, the company employees approximately 328,000 people and had a 2016 return on assets of 7.9%.
3 | H&M
Hennes & Mauritz began as a single womenswear store in Vasteras, Sweden, in 1947. It claims to be “dedicated to creating a better fashion future,” using its size and scale to “drive development towards a more circular, fair and equal fashion industry”. These efforts afford it a CSR score of 10.00. Indeed, 96% of electricity used in 2016 came from renewable sources and stores have collected over 4,500 tonnes of clothes for reuse and recycling since 2013. H&M currently operates across 41 online markets and over 4,500 stores in 68 markets. The company welcomed 13,000 new employees in 2016, bringing it to a total of 161,000. Including VAT, the group’s 2016 sales are reported as $27.32bn. Gartner awarded H&M a composite score of 4.63.
2 | Inditex
Inditex is one of the world’s largest fashion retailers, and has eight brands including Zara and Stradivarius. Founded as a family business producing women’s clothing in 1963, the company now has 7,405 stores in 94 markets across the world. Its CSR score of 10.00 is unsurprising given claims that the company aims to put “people and the environment at the centre of our decision making… always striving to do and be better”. With a workforce of 162,000, Inditex claims to “never lose sight of the customer.” The company had an average revenue growth of 12.0% according to Gartner and earned a composite score of 4.98.
1 | Unilever
Unilever as it is known today was formed in 1930 and since then it has become known as the seventh most valuable company in Europe. Unilever’s products vary across food and beverages, cleaning agents and personal care products, and it owns 400 brands in total, including Knorr, Lipton and Ben & Jerry’s. Thirteen of Unilever’s brands each achieve sales of over €1bn ($1.18bn) per year. Some 57% of its business is in emerging markets and it employs 169,000 people, with 46% of Unilever managers being women. Each year, the company invests around $1.17bn in research and development, particularly in innovation and customer research. This has helped it earn a composite score of 6.39 from Gartner, with 10.00 for sustainability.