SCDigest: Top Consumer Goods and Retail Supply Chains for 2009
Through a special arrangement, presented here for discussion is a summary of a current article from Supply Chain Digest.
Each year, SCDigest reports on the annual survey results from Cannondale Associates, which ranks the top consumer packaged goods industry supply chains and the top retail supply chains in the primary store segments that sell those packaged goods products. The full Cannondale survey and report, which it calls PowerRankings, was released in late 2009 and covers a number of company performance measures for both consumer goods manufacturers and retailers, including such areas as brand power, marketing programs, sales teams, overall business fundamentals, etc., as well as supply chain.
Too often, Cannondale says, pressures lead manufacturers and retailers to focus on "the right now" instead of doing what is "right" for long-term business success.
As a result, Cannondale says manufacturers and retailers too often seem to be working at cross purposes. Instead, both sides need to pursue a more collaborative model that focuses on the five elements of the Cycle of Success:
- Simplicity
- Consistency
- Follow Through
- Creativity
- Involvement
We'll start with the top consumer packaged goods supply chains, as rated by their retail channel partners. The percentages in the chart below reflect the number of retailer respondents who said a given manufacturer's supply chain was in the top three in the industry. For a number of consecutive years, Procter & Gamble has come out on top, though it took a bit of a hit, down almost 11 percentage points from its 2008 rankings, which were down five percent from 2007. The report says there was some feedback from retailers that P&G had become "less flexible" than in the past. However, it still has a fairly sizable margin over second place Kraft.
Meanwhile, Nestlé made a big move both positionally and percentage-wise, up five percentage points over last year's rankings. ConAgra and Campbell cracked the top 10 this year, replacing Clorox and Coca-Cola on the Cannondale list.
One retailer, for example, said "ConAgra has really stepped up its game on supply chain. They went from a middle of the pack supplier to one of our best."
Among consumer packaged goods focused retailers, it should come as no surprise that Walmart came out on top, named among the top three by an astounding 95.6 percent of manufacturer respondents - increasing that number by 3.5 percentage points in 2009.
Costco, meanwhile, jumped from fourth to second place, moving past last year's number two Target, which fell 4.7 percentage points. Meijer also took a fairly large percentage drop, while Kroger enjoyed a big percentage gain, up 6.3 points.
Because of a tie, the top 10 is really a top 11, with Safeway and Giant Eagle new to the list for 2009, and SuperValu falling off.
"Costco is a Supply Chain that just happens to have a big box on the end of it. They are relentless when it comes to improving the efficiency of every aspect of the supply chain," one manufacturer noted.
Kroger also got kudos from one manufacturer respondent, who said that the grocer "is extremely progressive in what they are trying to do with their supply chain."
Discussion Questions: What’s your reaction to this year’s Cannondale CPG manufacturer and retail supply chain rankings? Of the five listed criteria (simplicity, consistency, follow through, creativity, involvement), which ones do you consider becoming more critical to supply chain management in the coming year?