GENEVA — Inditex and Hennes & Mauritz were identified as the second- and third-best performers, respectively, in the 2015 ranking of the top 15 supply chain organizations based in Europe, according to a report by Gartner Inc., an information technology research and advisory company.
The top slot was occupied by Unilever, while L’Oréal secured fifth place in the annual ranking, it said. Nestle ranked fourth.
The top three companies “continued to demonstrate market-leading supply chain capabilities,” said Stan Aronow, Gartner research vice president, who noted that during the research, “we identified common practices and challenges experienced by the leading supply chain organizations.” This included, he said, the finding that “a willingness to invest in and experiment with technology and digital business models has given the top companies an edge.”
The research also found that, regardless of industry, the top companies all have hundreds of sites, thousands of suppliers, operate in dozens of countries and are working to set aggressive global targets but allow flexibility in how they are achieved in local markets.
Gartner determined the top 15 performers based on a combination of financial metrics, including return on assets, inventory turns and revenue growth, and an opinion survey of 200 senior supply chain executives and analysts.
Concerning Inditex, the study said, “The secret of this retailer’s unwavering success is its innovative, yet simple vertically integrated business model leveraged across eight brands, including Zara, Massimo Dutti, Bershka and Stradivarius.”
The retailer also places the customer “at the center of its decision-making process, and achieves excellent flexibility and speed in bringing product to market through ownership and in-house execution — from store, through design, to manufacturing and culminating in logistics delivery to the store in as little as two weeks.”
Inditex is also capitalizing on this vertical integration, it said, by rolling out a reusable item-level RFID tracking system for all garments sold in its Zara stores. This system, it observed, also allows for more efficient — up to 90 percent faster and more accurate — inventory counts, stock replenishment triggered by sales, enhanced security, and better service for customers looking for specific items in physical stores and online.
As for H&M, the study found the Swedish firm pursues “an outsourced model, ranging from its lease of properties, rather than outright ownership, to its exclusive use of third-party manufacturing and 3PL-managed distribution centers.”
“This enables the retailer to establish scale, or exit supplier relationships or presence in a sales market quickly,” it said.
With regards to L’Oréal, the report said the beauty giant’s supply chain has focused “on moving from being next to the business to being part of the business and closer to customers.”