Gartner’s list of the top 25 supply chains aims to inspire and educate our community on how some top performers deliver excellence. We’ve ranked various companies against our success themes and criteria to arrive at this impressive list of organizations that offer a world of teachable lessons in supply chain management.
In the last article, we explored the effective supply chain management of Nestlé and Schneider Electric, who ranked at numbers five and four in our countdown. This time, we’ll explore the innovative success of Johnson & Johnson and Colgate-Palmolive, who both manage vast and expansive operations around the world.
3. Johnson & Johnson
Johnson & Johnson (JJ) are healthcare industry leaders and have shown the world why with their recent innovative use of 3D printing to reduce the COVID-19 ventilator crisis and vaccination distribution. The Johnson & Johnson supply chain transformation is an achievement that facilitated their success this year, and it’s credited to advanced planning. In fact, they even have an advanced planning team responsible for constructing a complete end-to-end supply chain that focused on improving the customer experience through technology and digitization.
Facilitating the supply and demand of an organization as prominent as JJ is a challenge that breaks through traditional geographic proximity possibilities. Their global operations require suppliers moving items worldwide and deliveries traveling similar distances to reach the end of the chain. JJ managed to make this process predictable and measurable and create a consistent service through the use of digital technology.
By now, if you’ve followed our countdown, you may have internalized that at the heart of a more intelligent supply chain is accurate data. JJ managed data gathering in their own way by sending crawlers into the supply chain to collect and record vast amounts of information based on specific parameters.
Their software then creates an analytic layer by interpreting the data, which they use to develop systems and programs, such as forecasts. These analytical layers can cover a range of metrics depending on the needs of the advanced planning team. They’ve calculated the average time particular products take to complete their supply chain cycle journey, and that information can provide transparent communications with customers and inform them of their expected order fulfillment dates. Data also highlights connection point vulnerabilities within their supply chain, which they can address accordingly and improve the overall efficiency.
Personalization and Automation
Digital technology reaches further into the Johnson & Johnson supply chain operations by delivering personalization and automation. Aware of the growing self-service expectations of customers to complete orders, JJ implemented a solution that solves queries through instant chatbots and messaging services. Customers receive automated solutions to their low-complexity issues, allowing them to continue placing their orders without much disruption. It also frees up the resources of the JJ staff, who have more time to deal with complex customer issues, improving the overall customer experience through this two-pronged solution.
JJ’s predetermined their customers’ expectations for improved efficiency because the world their customers live in is becoming increasingly more convenient and efficient. This innovative thinking, strong leadership, and enablement of tools and technology to streamline the supply chain and improve customer experience have earned Johnson & Johnson the third spot on our list.
The oral, personal, and home care product manufacturer Colgate-Palmolive have been labelled the silent, global leader. With operations spanning over 80 countries and six continents, and products sold in over 220 countries, they’ve maintained their position as one of the world’s most well-managed supply chains.
Colgate-Palmolive is a business focused on consistency and growth, which, if done well, are ideal features to complement each other and the growth of their business. Significant amounts of their leadership efforts go into expansion and productivity through partnerships that ensure partners’ communication within the value chain. Their financial performance reflects the actions of these efforts, with 42 consecutive quarters of improved margins. So how have they arrived here?
High Visibility Through Implementing Technology
Colgate-Palmolive implemented emerging technologies early into their market life to create a database management system. These systems take advantage of Colgate-Palmolive’s already well-integrated global operations and improve visibility over the entire system. As they continue to grow and shipments increase, efficient technologies like these mean that incorrect or inefficient orders are reduced despite the growth.
Their technology includes control measures that signal daily demand for automated replenishment orders on inventory, resulting in a consistent alignment of supply and demand.
Colgate-Palmolive has a unique approach to manufacturing – they standardize 85 percent of product production while customizing the remaining 15% to reflect demand variances. The high percentage of standardization allows them to maintain production efficiency and is possible due to the company identifying high-value products that drive their revenue to calculate an optimal production level.
The oral and skincare giants manage to use sustainability as a driver for a profit before sustainability was an ethical focus for businesses. By creating the means to establish a zero-waste manufacturing process, they have reduced cycle time and increased material usage, resulting in increased capacity and reduced material wastage and energy use.
The Colgate-Palmolive supply chain has been an early leading system because a company that places considerable effort on growth and consistency must have the procedures and systems to support itself. Through their bold use of emerging technology and sustainability practices that were rare at the time, they’ve managed to support their continued growth into the world-leading territory.