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Leaders Must Develop Value-Creating Strategies Across the Supply Chain

Analyst Insight: In order for businesses to succeed in an increasingly competitive marketplace, they must find new ways to add value. At John Deere, that means collaborating with dealers to expand the brand from selling equipment to offering solutions that improve the productivity of farming. For leaders in supply chain management, it means developing strategies that create value across the supply chain through innovation, responsiveness and agility. - Robert D. Boyle, Director, John Deere Chair, APICS The Association for Operations Management

In my 11 years at John Deere, I've had at least five job titles; and technically, more than that. While I've done a variety of different things"”from service parts management to business innovation"”business strategy has always played an essential role in my work. In my job now, I'm working with Deere dealers to help make the company's overall agricultural solutions strategy more actionable, which ultimately benefits our customers.

Our dealers are facing many of the same challenges other business people encounter today. In order to stay successful, they must increasingly add value. That begins by understanding the customer, creating strategies to meet their needs, and being accountable for executing those strategies.  Management practices such as annual and long-term planning, regular performance reviews, succession plans, service expansion, and better showrooms are ensuring dealers' continued ability to meet customers' changing needs and increased levels of competition.  They are becoming more sophisticated as they employ higher-powered management teams - chief executive officers, chief financial officers, human resources managers, and more. These businesses are putting solid structures into place.

Next, the dealers in our network are working to better educate themselves about all aspects of their business.

Lastly, dealers are expanding their scope from selling equipment to offering broader solutions.  Increasingly, dealers are analyzing the machine performance data that are collected from the equipment and showing farmers what to do to improve their equipment utilization and operations. More and more, equipment service and financing also are important factors. In the world of heavy equipment manufacturing, the distinction between products and services definitely is blurring as many service jobs are created to support product lines.

Think about how Deere is working with its dealers and consider the definition of "value chain"¯ as it appears in the APICS Dictionary, 13th Edition:  "The functions within a company that add value to the goods or services that the organization sells to customers and for which it receives payment."¯

Now consider that, according to a 2011 APICS research report, many operations management professionals are aware of their organizations' supply chain strategies, but aren't implementing those strategies in their day-to-day tactical efforts.

If adding value is an important strategy of successful businesses, supply chain professionals need to understand how their tasks add value overall.  Supply chain roles are changing, and it is the responsibility of every professional to stay up to date, especially in the areas of supply chain strategy, risk management, and resiliency.  Take, for example, supply chain technology, which is providing keen insights supporting customer demand management"”in good times and in bad.  Increasingly, supply chain professionals are being called upon to further hone their analytical skills to support strategic decision making. Are you ready for what's being asked of you?

                                  The Outlook

More and more, it falls on supply chain professionals to help customers do their jobs better. Supply chain experts do this by strategically connecting companies' goods and services"”ultimately leading to added value for the customer.  Supply chain professionals who can create this synergy within organizations are valuable. They need to be purposeful and intentional about what they are doing, yet remain flexible and intellectually curious.

Keywords: continuing education, leadership skills, enterprise-customer synergy, supply chain management

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