Cisco Takes Top Spot In Gartner Supply Chain Top 25 Despite Record Backlog

While the tech giant is still plagued by current supply chain challenges, Cisco stayed in first place for the third consecutive year in Gartner’s Global Supply Chain Top 25 report thanks to its ability to adapt internally and externally, Gartner said.

Cisco Systems held onto its crown for the third consecutive year as the leader of research firm Gartner’s Global Supply Chain Top 25 report.

Gartner said it reseaches the supply chains of hundreds of companies and “scores them using a mix of qualitative (financials, ESG) and quantitative (community opinion) data.” The report, published Thursday, highlighted Cisco’s “continued focus on adapting in various ways to the changing environment both internally and externally,” which helped the tech giant retain its top spot on the annual report on supply chain excellence.

Cisco CEO Chuck Robbins revealed at The Channel Company’s IT Best of Breed event in October 2021 that the company put $10 billion into commitments aimed at securing chip supply for Cisco, a big sign to partners that Cisco was being proactive about supply chain challenges, said Faisal Bhutto, senior vice president of cloud and cybersecurity for Calian Group, a Cisco partner.

“That shows their commitment -- they want to be first in line. That foresight is probably paid off,” Bhutto said.

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San Jose, Calif.-based Cisco continues to adapt in various ways to the changing environment and its supply chain moves in alignment, according to Gartner.

“[Environmental, social and governance] ESG is a big focus, with circular concepts incorporated in the design, operations and consumption aspect of the products and the supply chain,” said Mike Griswold, vice president, team manager with the Gartner Supply Chain practice, in a statement on Cisco.

Still, supply chain challenges have plagued Cisco during its fiscal 2022 year. The tech giant during its Q3 2022 earnings call earlier this month revealed a record-breaking customer software and product order backlog to the tune of more than $15 billion, which was up 10 percent sequentially and up 130 percent year over year.

Canadian IT service provider Calian Group has experienced supply chain challenges and order backlog, a “new reality” that’s emerged for channel partners over the past year, Bhutto said. Calian has been grappling with the challenge by helping its clients place orders well in advance, he said.

“We haven’t seen a significant improvement that would make us believe things are being delivered faster right now, but with things starting to open back up and hopefully no more lockdowns, we’re hoping things start to smoothen out a bit,” Bhutto said.

Cisco’s Robbins, for his part, said that Cisco is mitigating supply challenges by working closely with the company’s key suppliers and contract manufacturers, and paying significantly higher logistics costs to get the components where they’re most needed.

“We are constantly evaluating our global supply chain,” said Cisco’s CEO Chuck Robbins earlier this month. “It’s not about one country, it’s about resilience. And the way we’ve designed supply chains over the last 15-20 years as an industry -- I think we all realize we’re evolving that now at the same time that we’re triaging all of the current issues that we have.”

Robbins said that as a result, Cisco and other companies are grappling with “a dual challenge.”

“We are constantly driving geographic resilience. The example I would give is that before COVID, we had regional redundancy built in, we did not have a plan for a country to shut down. And so, it takes time to go out and create that geographic resilience, but our teams are working on all of those kinds of things right now, so they will continue to do that.”

Cisco has also worked around supply chain challenges through its takeback program and Cisco Refresh, an initiative that was launched more than 20 years ago to offer partners and customers certified Cisco remanufactured equipment with the same warranty and support options as new Cisco products, but at discounted prices. The company said that today, 99.3 percent of all hardware that is returned to the Cisco is either completely refurbished with new components and a warranty, or it is securely decommissioned and recycled.

Following Cisco in the Supply Chain Top 25 this year was second place winner Schneider Electric, Colgate-Palmolive in the third spot, and Johnson & Johnson in fourth place. Other tech firms on the list include Intel, Lenovo, Microsoft, HP Inc. and Dell Technologies.