Gartner is out with their “Top 25” list of supply chain performers for 2017. Number 1 is Unilever, followed by McDonalds, Inditex, Cisco Systems, and H&M. Scroll all the way through and there is no doubt: it’s an impressive and diverse group of high performing supply chains.
Yet there is a conspicuous gap. Where are the government supply chains? Where are the defense folks? Where are the NGO’s? In Gartner’s defense, stories of ineffective performance in government, defense, and NGO procurement are common. But does that mean that all of these supply chains are inherently poor performers? Or is Gartner the victim of tunnel vision and selection bias?
The government establishment is surely guilty of tunnel vision. According to Forbes magazine, “The Pentagon has long relied on the incumbent Beltway-centric contractors, which build overpriced, underperforming, custom-made products.”
Insular thinking and tunnel vision are dangerous.
I browsed through the Gartner results sitting in a Starbucks – another company recognized on this year’s Top 25 list. I was nibbling on a muffin, drinking coffee, and sipping from a carton of milk. The milk came in one of those boxy cartons, where you push the straw through a hole in the top, using the straw that comes taped to the side of the carton.
Then the light bulb came on. I first became acquainted with that style of packaging in Iraq, sitting in a Forward Operating Base (FOB) military dining facility (DFAC) eating dinner in 2007. That fresh milk outside of Baghdad was not sourced locally. That milk came, along with fresh fruit, vegetables and just about everything else we ate, all the way from the West.
That high performance supply chain was managed by a private sector service provider under a government contract. Fresh milk, fresh fruits, and fresh vegetables served in a barren, scorching, desert war zone, delivered by a private sector defense contractor. Why aren’t there any government supply chain actors on Gartner’s list?
Consider Boeing. These are the folks who, among other things, support NASA and help keep the crews on the International Space Station supplied. Now that’s a logistics challenge that few others have ever tackled.
And then there is Lockheed Martin. As far as I can tell, LMCO is the last government contractor to crack the Gartner “Top 25” list, back in 2010. They remain formidable logisticians, providing supply chain services at a high operational tempo, from Korea to Southwest Asia, but they do no crack the list.
And let’s not forget The American Red Cross. Quoting directly from their website, “From small house fires to multi-state natural disasters, the American Red Cross goes wherever we’re needed, so people can have clean water, safe shelter and hot meals when they need them most.”
Looping back to Gartner’s list, it is impressive and there are lessons to be learned from everybody on that list. That said, high performance supply chains do not necessarily have high inventory turns or align to “corporate social responsibility goals,” as selected and applied by Gartner. The metrics used by Gartner may be appropriate for some organizations, but not all sectors fit the Wall Street template.
Supply chains success is about delivering high impact outcomes, and while that may be congruent with commercial success, it is not synonymous.
Government spending accounts for something like a third of Gross Domestic Product, and while not as big as the private sector it is significant. NGOs perform many “hard to do” functions that save and preserve lives in emergency and austere environments. To fulfill their missions, government contractors and NGO’s often need world class supply chain capabilities.
To have a full spectrum view of logistics excellence, don’t ignore the Defense Contracts and NGO’s.