Gartner Top 25: The Beauty Contest of Underperformers

May 24, 2024
4:33 pm

My LinkedIn news feed is full of congratulatory notes for companies listed on the Gartner Top 25 released yesterday. Tech companies celebrate their companies on the list, consultants give themselves pats on the back, and the companies making the list congratulate their employees.

My issue is that the Gartner methodology celebrates underperformers. The lack of clarity and discipline in the methodology gives the industry a false signal to define supply chain excellence. The Hippocratic oath in medicine is “do not harm.” My issue is that this rating scheme is used to drive software decisions, hiring practices, and process evolution. Two of the manufacturing companies on the list even sell and license their methodology to sell to others. Ranking on the Gartner Top 25 guarantees a revenue stream.

When we compare the companies listed on the Gartner Top 25 to peer group results for the period of 2013-2023, we find that 59% of the listed companies score below their peer group on year-over-year growth, 41% below their peer group on inventory turns, and 41% fall below their peer group on Return on Invested Capital (ROIC).

This is the twentieth year of the Gartner Top 25. I was an analyst in the room when it was designed and launched. The origin of the Gartner Top 25 was an effort by AMR Research to be seen as more strategic and more competitive in the market to their competitor Gartner. (Funny, right?) My push back now was my concern then. I just feel it more strongly.

The first issue is that the Gartner Top 25 is not a peer group comparison. The second issue is that the Gartner comparison is based on a short time frame (a three-year comparison). (We find that it takes at least five years to see the year-over-year patterns of top performers.) The third issue is that the methodology rewards large brand companies that frequently speak at events. (The Gartner list is a combination of the Fortune Global 500 and the Forbes Global 2000 greater than $15B in revenue.) The fourth issue is that 50% of the comparison is based on opinion. As a result, the top performers of CCL Industries, Clorox, Crocs, Cummins, L Brands, Lululemon, Monster Beverage, Paccar, Toro, and Taiwan Semiconductor never make the list.

While these companies outperform their peer group for improvement, performance, and value, their accomplishments are not studied. Some are too small, many are not visible at industry events, or well-known by the Gartner review group. However, I think that we need to understand why small companies are outperforming large, and better-known companies. And why discrete companies exhibit more resilient patterns at the intersection of operating margin and inventory turns? The insights would be helpful to the industry.

In Figure 1, we share the results on growth, inventory turns, operating margin, ROIC, Price to Book, and Market Capitalization for the companies making the Gartner Top 25. The cells in gray represent under-performance to peer group.

Figure 1. Gartner Top 25 2024 Winners Comparison to Peer Group for 2013-2024

Using the Supply Chains to Admire Methodology, we agree with Gartner on the results of Apple, Inditex, L’Oreal, and Nike. (Four out of the twenty-nine companies.) However, I would disagree with the conclusions in the press release. The lesson that I learned from my interviews with these companies is the need to focus work processes to manage product portfolios and drive innovation in new product launch based on market drivers.

My interviews do not support the premise that these companies are investing in AI and anti-fragile supply chains. Instead, I find that the companies with the greatest performance against peer group constantly innovate their products and services based on shifts in markets. The organization is aligned on customer delight, the team operates based on a clear strategy, they establish clear governance and definitions of supply chain excellence, corporate politics is low, and they are managed by a charismatic and omnipresent leader.

Conclusion

Make your own decision. I believe that supply chain superiority should be measured against peer group comparisons for a period of time that is long enough to see the patterns. I cannot see the patterns in a three-year comparison, and I find that it takes four-to-five years to see the results of a true supply chain transformation. I believe true excellence is sustained performance against peer group.

The Gartner methodology puts all companies greater than $15B in spreadsheet and shakes them up based on three-year averages and opinion.

Does it matter? Yes and No. I worry that academics and technologists have a false sense of which companies are driving true supply chain excellence. This false belief hampers the industry to drive for answers to understand what drives sustained performance. I see it as an opportunity cost to driving true innovation.

For the winning business leader, I say take joy in winning the beauty contest. For most, it will be the only time in your life you will take home the winning crown based on ratings by peers. However, when you go to sleep, please be sure that you remember that it is just that, a beauty contest. Supply chain leaders have more to do than pop a cork for a crown. True winners outperform peer group companies year-over-year driving shareholder value.

Your thoughts? I look forward to hearing from you.

Navigating Supply Chain Economic Downturns

August 30, 2026 5:28 pm

In 2007, the average company took six months to sense market shifts and adapt its supply chain. My estimate, based on work with clients, is that if a downturn happened today, the average company would take 20-30% more time to adjust than in 2007. Here I give insights on preparedness.

Warning: Sidestep the Narrative of the Misguided Goldiggers

August 10, 2026 4:58 pm

Ten years ago, I started writing a book titled Stories of the Misguided Gold Diggers. The book was a collection of stories from two decades of stories of technology leaders perpetuating the myth of integrated end-to-end supply chain planning.

I dusted off the manuscript on Saturday. I think that we have a new chapter. Companies focused on putting Artificial Intelligence (AI) on top of existing architectures are putting AI Stupid on steroids.

The Myth of End-to-End Planning

July 31, 2026 9:14 pm

Supply chain planning, supply management, supply chain execution, network design, and transportation/logistics management operate in silos. Not much has changed over four decades. The connections flow back through transactional systems: order-to-cash and procure-to-pay. There is a myth that companies can buy an end-to-end supply chain management solution. This is largely a myth. Here we explain.

Lead Time: A Broken Gossamer

July 16, 2026 6:38 pm

If you are struggling with supply chain planning, dancing in the light of shiny objects, and scratching your head, please read on. My goal is to help you.

Please do not AI Stupid. What do I mean? AI Stupid is putting agents and agentics on top of existing architectures believing that making them faster and hands free add value. To me, this is fools play.

I love AI. I am excited about new technologies. To this end, I want to shine a light on how new technologies can help address the black holes and inconsistencies in today’s supply chain, which largely stem from the limitations of the first generation of supply chain planning and execution technologies. In this blog, I give you three places to start.

Do You Need a Supply Chain Coach?

July 9, 2026 5:27 pm

Supply chain is where the rubber hits the road. For a public company, over 40% of market capitalization is tied to the trade-offs between growth, operating margin, inventory management, and Return on Capital Employed.

The road for supply chain improvement is fraught with issues. Here we share some and offer some advice.

Is your Supply Chain AI Ready?

June 11, 2026 2:39 pm

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Supply Chain Shaman