Nasdaq+ Exclusive

“Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time.”
— Management Guru Tom Peters

Once upon a time—we’re talking back in the 1970s—the supply chain industry was pretty ho-hum. Most logistics pros had a practical bent, basic math skills, and a high school education. Their narrowly defined role was straightforward enough: Organize the movement of material from point A to point B. Case closed.

Where the goods originated, their impact on the environment and the conditions under which they were produced was not their department. If coups, trade wars, blockades or health emergencies delayed arrivals, well, that too was out of the hands of these supply chain managers (SCMs).

Fast forward 50 years, the field has been galvanized and supply chain management is now a high-stakes business. Heightened global competition, increasingly demanding customers, and a digitized world are forcing companies and their SCMs to make supply chain policies and structures transparent. Increasingly, consumers won’t tolerate exploited workers, unsustainable practices or late deliveries. They want everything yesterday—and they want it all to be ethically sourced.

So what does all this mean when you’re looking to refresh your stock portfolio? You might want to consider enterprises that help the big players that tend to their supply chains.

Bots on the warehouse floor

Integrating every aspect of the chain distinguishes companies at the vanguard of procurement. Some of their partners make streamlining easier than others. For example, Honeywell (HON) is one firm selling the very latest automation to its warehouse and distribution-center customers as a way to boost productivity and combat staff shortages.

Honeywell is singled out here because it recently partnered with OTTO Motors, a strategic move that lets it deliver warehouse robots capable of handling the most labor-intensive jobs.

Honeywell’s stock had a great final end to the year, seeing its shares go up four days in a row. That followed a decent Q3 report, too, when earnings per share, at $2.27, exceeded the high end of the guidance range.

Talent hunting in a tight field

And speaking of labor, the irony is rich. The very industry based on finessing the balance between supply and demand is facing a serious supply shortage of qualified SCM professionals. Talent in the field is scarce and it can take real expertise to track down the best contenders.

Pagegroup PLC (MPGPF) stands out in that regard. This global recruitment firm, which has a dedicated supply chain division, saw its stock head south from August through November, but its shares began surging again recently.

Overall, the company’s Q3 profits declined by seven percent compared to the same quarter last year, but that may be because there simply isn’t enough talent to recruit. At any rate, you can’t assume these short-term ups and downs reflect badly on the supply chain division. In the long run, Pagegroup’s expertise in this arena could serve the company very well.

Getting in on the circle game

With more consumers insisting on sustainability, software-as-a-service enterprises with products that promote circular supply chains are becoming mainstream. Companies like Oracle (ORCL) are on trend. Oracle’s offerings help businesses design goods that build in recycling and re-use measures from the get-go. Oracle’s suite also uses blockchain technology to ensure suppliers comply with recycling standards.

The software maker’s cloud services did exceptionally well last quarter: Revenues were up 17 percent. The company had a stellar year all around, with shares gaining a full one-third of their previous value.

Supplying legitimate contractors

Any supply chain is only as good as the people who supply inputs in the first place, and firms that vet these providers to ensure their practices are above-board are a big boon to the industry. That’s where companies like SAP (SAP) come into play.

The software firm’s Ariba offering assesses risks associated with potential suppliers before and after they’re onboarded, and keeps tabs on them throughout their association with the partnering enterprises. Ariba and other parts of SAP’s supply chain management platform may have contributed to the firm’s great Q3: Revenue was up 16 percent. Not surprising that 13 analysts give it a “strong buy” recommendation.

This list is by no means complete. Many companies offer comprehensive tools that cover all the services here and more.

In the past, supply chains resembled old Rube Goldberg contraptions. You’ve seen depictions: a shoe kicks a ball down a slide into an eddy of water, which pushes it onto a spring, and so on.

Back then, the room for error was enormous, but those days are gone. To survive today, companies need sleek, highly visible supply chains that deliver goods with a seal of approval. It makes some sense to back firms that can help them do just that.