Executive Briefings

Opinion: Supply Chain and the 3G Effect

Chief Supply Chain Officers are still a fairly new phenomenon. Compared to more established C-level roles such as Chief Financial Officer and Chief Information Officer, the idea of a board-level executive in charge of all source, make and deliver functions remains novel.

Opinion: Supply Chain and the 3G Effect

The logic of a centralized strategy to manage cost-of-goods-sold, quality and customer service may seem obvious to those schooled in supply chain thinking, but new survey data suggests the rest of the executive team does not always see it that way. Are we losing our seat at the table?

Supply Chain as Cost Center
SCM World’s 2017 Future of Supply Chain survey data flags a trend away from the notion that supply chain strategy and business strategy are intertwined and aligned. One question asked of more than 1,000 practitioners lets respondents choose from answers designed to reflect a descending scale of supply chain importance. In 2012 those who believed their CEOs considered supply chain an equal partner outnumbered those who felt they were viewed strictly as a cost center by nearly nine to one. This year that ratio is closer to four to one.

The drop in confidence that supply chain is viewed as an equal partner to sales or R&D is mirrored by a 50-percent jump in the share who feel they are viewed only as a cost center. Is this truly what board-level executives think about supply chain? And if so, what should we do about it?

Reconciling Cognitive Dissonance
This data feels wrong. We can see the ascendance of supply chain executives to general management leadership roles everywhere. That includes Tim Cook at Apple, of course, but also Mary Barra at General Motors, Brian Krzanich at Intel, Mark Sutton at International Paper, and many more. Plus, who can dispute the massive strategic impact of Amazon on business strategy everywhere? Amazon’s Worldwide Consumer business is led by CEO Jeff Wilke, who, with his roots in chemical operations and graduate work in MIT's Leaders for Manufacturing program, is about as perfect a supply chain icon as one could ask for. Don’t these examples prove the importance of supply chain to business strategy?

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The logic of a centralized strategy to manage cost-of-goods-sold, quality and customer service may seem obvious to those schooled in supply chain thinking, but new survey data suggests the rest of the executive team does not always see it that way. Are we losing our seat at the table?

Supply Chain as Cost Center
SCM World’s 2017 Future of Supply Chain survey data flags a trend away from the notion that supply chain strategy and business strategy are intertwined and aligned. One question asked of more than 1,000 practitioners lets respondents choose from answers designed to reflect a descending scale of supply chain importance. In 2012 those who believed their CEOs considered supply chain an equal partner outnumbered those who felt they were viewed strictly as a cost center by nearly nine to one. This year that ratio is closer to four to one.

The drop in confidence that supply chain is viewed as an equal partner to sales or R&D is mirrored by a 50-percent jump in the share who feel they are viewed only as a cost center. Is this truly what board-level executives think about supply chain? And if so, what should we do about it?

Reconciling Cognitive Dissonance
This data feels wrong. We can see the ascendance of supply chain executives to general management leadership roles everywhere. That includes Tim Cook at Apple, of course, but also Mary Barra at General Motors, Brian Krzanich at Intel, Mark Sutton at International Paper, and many more. Plus, who can dispute the massive strategic impact of Amazon on business strategy everywhere? Amazon’s Worldwide Consumer business is led by CEO Jeff Wilke, who, with his roots in chemical operations and graduate work in MIT's Leaders for Manufacturing program, is about as perfect a supply chain icon as one could ask for. Don’t these examples prove the importance of supply chain to business strategy?

Read Full Article

Opinion: Supply Chain and the 3G Effect