Little more than a decade ago, the role of the supply chain leader in most companies was largely functional. It relied on technical proficiency in discrete areas such as knowledge of shipping routes, familiarity with warehousing equipment and distribution centre locations, and a solid grasp of freight rates and fuel costs.
Today, the way companies need to think of the modern supply chain executive has changed dramatically, as the need goes well beyond functional expertise. Global sourcing and global supply chains have expanded tremendously in recent years, for both retailers and manufacturers. Most companies nowadays need to source globally, sell globally, or have competitors that do so. Therefore, supply chain executives must manage, like never before, a supply chain process that extends across continents. They must also deal effectively with suppliers and customers on a global basis.
And while they still need to be experts at managing traditional supply chain functions, leading organisations now see the functional supply chain leader as the go-to executive to coordinate the end-to-end supply chain process. This mental shift to supply chain as-a-process inevitably leads to the shift of the role of the supply chain executive from a functional focus to process focused. Supply chain leadership therefore becomes a vital part of the executive team.
The modern supply chain executive plays a key strategic role that can influence 60 to 70 percent of an organisation’s total costs, all of its inventory, and most aspects of customer service. For new or existing supply chain executives to adopt this pivotal responsibility successfully says renowned academic and author Paul Dittmann, they need to master — and continually improve — the following five core competencies:
1. Global leadership competency
As mentioned earlier in this post, supply chain leaders must be able to operate effectively in the fast-paced global business environment. This includes adjusting to disparate cultures, fully comprehending the global risk for the organisation, and being adept at managing the long lead times inherent in the global marketplace. They must also know the basic supply chain fundamentals associated with global logistics, such as how to optimise import and export flows, source globally, and deal with global labour issues.
2. Transformational capabilities
Supply chain leaders operate in a dynamic environment, where they are constantly driving transformational initiatives. They must deliver on time and on budget, while generating superior results. As the bar is constantly raised, they must excel at managing change, complex projects, and diverse talent, and possess exceptional communication and negotiation skills.
3. Integrated business planning
Dealing with cross-functional and cross-enterprise issues represents a large part of supply chain management. This involves integrating a company’s operations side with its demand side, and embracing demand and supply integration concepts, such as sales and operations planning. In addition, supply chain professionals lead the way in designing collaboration initiatives with suppliers and customers, and they must master the challenge of planning the end-to-end supply chain.
4. Integrated value chain implementation
To be seen as central to the organisation’s success, supply chain leaders need to exceed customer expectations and become integral to delivering outstanding value. Some customers don’t know what they want until their expectations are exceeded. Supply chain leaders achieve this result by implementing an end-to-end value chain design, including customer segmentation, product and supply chain design, and optimisation.
5. Linking supply chain performance to organisational success
Leading supply chain professionals combine expertise in material flow management with outstanding knowledge of information and financial flow. Mastering these flows is crucial to generating supply chain performance and financial results that resonate in the C-suite and boardroom. To sustain such performance, supply chain leaders must design a metrics framework that drives the right behaviour, as well as processes that deliver product availability at the lowest possible cost.
While there is no single playbook to guarantee success in an incredibly dynamic global supply chain space, mastering these competencies will no doubt help ease the pressure. Also read the article, Dance of the giants – What leading companies are doing to optimise their end-to-end supply network, to find out how the world’s largest conglomerates are reconfiguring their supply chains.
|The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.|