Apple Inc. ranks number one in analyst firm AMR Research's compilation of the top 25 supply chains of 2010. Analysts attribute Apple's success to its ability to consistently bring both operational excellence and innovation excellence to bear in some of the most competitive markets in the world. Apple has broken new ground in transforming a supply chain into a value chain by starting with the consumer experience and designing its network to serve that master first and foremost.

The goal of the Supply Chain Top 25 research initiative is to raise awareness of the supply chain discipline and how it impacts the business.

"By embedding product and process innovation in supply chain operations and consciously managing and shaping demand from a customer, production and fulfillment standpoint, the companies included in our Top 25 are doing a lot more than just shipping," says Kevin O'Marah, group vice president at AMR Research, a Gartner company.

"Twenty years ago, a typical product company had supply chain reporting to manufacturing, with responsibility mainly for inbound materials management and outbound shipping," says Debra Hofman, research vice president at AMR Research. "New data shows that supply chain reports to manufacturing in only 6 percent of companies surveyed, while 61 percent have the head of supply chain reporting directly to the CEO, general manager or president of the business. It seems clear that supply chain has grown up and the business has taken notice."

As one of the original pioneers of demand-driven principles in supply chain, second-placed Procter & Gamble (P&G) remains at the forefront of areas such as specialized production operations in emerging markets and has established new beachheads of leadership in other areas, including its use of innovation networks to tap external expertise for at least 50% of its new product ideas.

Cisco Systems has climbed steadily in AMR's rankings for five straight years, moving up two slots to No. 3 this year, while five companies—Research In Motion (RIM), Amazon.com, McDonald's, Microsoft and Inditex—joined the Top 25 for the first time in 2010. The five companies that fell off the charts in 2010 are Toyota Motor, Walt Disney, Texas Instruments, Publix Super Markets and Sony Ericsson.

"Many companies focus primarily on supply chain execution," Hofman says. "With ever-increasing unpredictability of demand, leaders also focus on improving their ability to sense changes and patterns in their environment—changes in demand, design, supplier risk and more—earlier than their competition."

"In designing your own supply chain strategy, take a cue from the leaders: Work outside-in, starting with your customers and working your way back and around your network of trading partners to design a profitable response," O'Marah says. "Remember that one size does not fit all, define how many supply chain types you have, and design a customized response for each."

The AMR Top 25 rankings comprise two main components: financial and opinion. Public financial data gives a view into how companies have performed in the past, while the opinion component provides an eye to future potential and reflects future expected leadership. These two components are combined into a total composite score.

Top 25 Supply Chains of 2010

1. Apple
2. Procter & Gamble
3. Cisco Systems
4. Wal-Mart Stores
5. Dell
6. PepsiCo
7. Samsung Electronics
8. IBM
9. Research in Motion
10. Amazon
11. McDonald's
12. Microsoft
13. Coca-Cola
14. Johnson & Johnson
15. Hewlett-Packard
16. Nike
17. Colgate-Palmolive
18. Intel
19. Nokia
20. Tesco
21. Unilever
22. Lockheed Martin
23. Inditex
24. Best Buy
25. Schlumberger