European companies are improving their supply chains—and it has almost everything to do with company culture.
In its latest Supply Chain Top 15 for Europe, leading research and advisory company Gartner, said Europe-based companies are building on what’s already been strong performance when it comes to improving their supply chains.
‘The companies in the European top 15 demonstrated strong growth of 6.8%, which is more than double the average growth of the global top 25,” Gartner research vice president Stan Aronow said. “Moreover, European companies scored above average in corporate social responsibility and opinion score performance.”
Unilever, Inditex and H&M took the top three spots on the list, with H&M seeing 12.5% revenue growth, and Inditex raking in 12 percent more in revenue.
Inditex ranked third on the global supply chain top 25 for this year, with H&M, Nike and Walmart also making the cut.
Adidas made the list for the first time this year—making it the third and final apparel company called out—ranking at No. 13, with 12.4% revenue growth.
The top trends coming out of these leading European supply chains, according to Gartner, were digital experimentation, speed to adapt and a focus on sustainability.
“The bedrock of these successful trends are core foundational themes—common to all leading supply chain organizations—that have created a culture of excellence and relentless drive to continuously improve,” Aronow said.
[Read more about about how culture affects performance: Speed to Market Hinges on Your Factory’s Corporate Culture]
Diving a little deeper, the study found the below five efforts were key in driving these companies’ success.
Global scale, local responsiveness
Despite having supply chains spread across hundreds of sites in dozens of countries dealing with thousands of SKUs, supply chain leaders in Europe have still found a way to operate with responsiveness at the local level.
According to Gartner, “They set aggressive global targets, but allow flexibility in how they are achieved in local markets. Most have a few critical global-enabling processes around strategy, quality, planning, analytics, visibility and technology, and a combination of global and local manufacturing and distribution.”
Multiple models through segmentation
Whether it’s for new product categories, emerging markets, multichannel offerings of enhanced customer service, companies leading the way are using segmentation to create a portfolio of standard models to meet different end-user needs effectively and efficiently.
“This allows them to be both cost efficient and leaders in customer service,” Gartner said.
Supply chain leaders aren’t afraid to collaborate to reach a common goal—whether that be through a focus on strategic suppliers or even partnering with competitors.
“Based on visibility enabled by technology, these companies work collaboratively across whatever network is required to achieve the goal,” Gartner said. “Internally, that translates to a focus on making sales and operations planning a true decision-making forum across functions within the supply chain, with internal business partners, suppliers and customers.”
Investors in talent and tech
Companies with high-performing supply chains know it’s technology that fosters a large share of successful execution.
“What these companies also recognize is that talented individuals create, drive and develop world-class supply chains,” Gartner said. “Many of these supply chains focus considerable effort on university relationships to hire great talent and take advantage of rotational programs to develop the leaders of the future.”
Culture of excellence and masters of change
Supply chain leaders are continuously ensuring lean manufacturing and processes, undertaking quality and standardization initiatives and they dedicate resources to dreaming, piloting and driving disruptive change throughout the organization.
“For these companies, transformation is not a one-time project; it is a way of life,” Gartner said.