The Impact of the CSCO Post Covid 1: Responsibilities and Skills

How might the responsibility of the Supply Chain Function change as a result of the impact of the last 2 years? What new skills, capabilities and experiences that supply chain leaders need?

By Mick Jones

“The line between disorder and order lies in logistics…”

Sun Tzu, The Art of War.

Never a truer word has been said about Supply Chain and Logistics at the moment. Two years of unfathomable disruption — from COVID-19 through the Suez Canal debacle to the recent failur of resource and infrastructure globally — have rocketed the role of chief supply chain officer (CSCO) into the spotlight, as organisations fight to overcome unprecedented chaos. The supply chain is the lifeline of any organisation. It’s no surprise that more and more enterprises are enthusiastically focusing on? supply chains delivering confidence, sustainability and resilience. We are at a tipping point and as this trend continues, we will only see the role of the CSCO grow.

Two weeks ago, I had the pleasure of speaking alongside Lucy Harding, a Senior Partner at executive search and recruitment firm, Odgers & Bernstein,? in a discussion organised as part of Zencargo’s fantastic Navigate Beyond digital forum.

The subject was about? ‘The Future of the Supply Chain Function’: how we envisioned the function adapting and changing in the next few years, and our predictions on how functional leadership will come to influence the enterprise moving forwards.?

That session looked at three questions - I wanted to cover all three in some detail so I have split this into two articles - the first two questions will be addressed in this article.:

1. How might the responsibility of the Supply Chain Function change as a result of the impact of the last 2 years?
2. The new skills, capabilities and experiences that supply chain leaders need
3. The actions? supply chain leaders can take? to guide the recovery from Covid

During our Navigate Beyond discussion, Lucy pointed out that, “We are still in the eye of the storm… still reacting to operational and tactical challenges.”

Lucy is, of course, absolutely correct: supply chains are still suffering from the effects of the pandemic, and we are still only starting to emerge from that period of daily operational and hyper-tactical focus. The issue became so severe, that we saw the supply chain being covered in the headlines - from driver shortages to the potential lack of stock on shelves, not to mention the recent media coverage about retailers rushing to get stock on their shelves to? ‘save Christmas’.?

However, discussions in the UK Parliament and US Congress are proof that we are starting to see supply chains as a focus and key solution for some of the global disruptions that we are seeing today.? Supply chains are seen to be a real driver of costs and inflation and contribute greatly towards economic health, both on a business and country level.??

Increasingly, we are witnessing businesses asking their supply chain leadership teams to act in a more strategic way. Companies have started to actively engage with network design consultancies to really understand where the extended value sits in their supply chain. So how might supply chain responsibilities change post Covid?

I’ll be exploring this topic further on Tuesday at the Zencargo roundtable, ‘Entering the era of the Chief Supply Chain Officer’. Sign up to join the conversation here . In the meantime, here are our observations on how the responsibility of this vital function might change.

How might the responsibility of the Supply Chain Function change as a result of the impact of the last 2 years?

1.Supply chains own the problem

The economy has undoubtedly been volatile due to the pandemic and problems have become more severe with sudden disruptions, such as China’s power outages and high freight costs.? Joining us on the panel, Alex Hersham, CEO at Zencargo said, “Supply chains have been pushed to the fore - they are now undeniably ‘front’ of mind. We are invited to the top table.”?

Businesses and governments are starting to invest more in their supply chains as they are seeing it as a key function in their business and operational model. The impact of Supply Chain at the top of an organisation is there for all to see: we all saw the impact of the incredibly successful use of senior supply chain people rapidly hired to help the NHS with testing and vaccination logistics.

As Peter Parker outlines in Spiderman (tried to avoid the Peppa Pig reference!) 'with great power comes great responsibility', so the half a hand on the business tiller will mean that comes with a deliverable part of the 'contract'. We will have to deliver.

The next 12 to 24 months will govern whether that new confidence in our ability to solve problems sticks, or whether businesses are taken over by, and revert back to, cost and commercials once again.

2. Supply chains must become a key part of strategic business management

Most organisations have seen the implications of a supply chain that is unable to react to its environment. A poor supply chain undoubtedly impacts business performance.? And supply chain teams are being asked to look at the big challenging questions for the future such as: reinvigorating margins, the strategic direction of the business, ESG, and ultimately resolutions around omni-channel relationships with customers and how they can operationalise all of these things.?

Therefore it is necessary that supply chains need to have greater influence in terms of business management. We? now need to fight to become part of the broader coalition amongst the C-Suite to really influence and direct the enterprise.?

3. Increased collaboration with the CIO

As supply chains morph into data driven digital networks, it is almost inevitable that an enterprises end goal has to be delivered by greater strategic collaboration between the CIO and CSCO in an organisation. We have all seen the 'car-crash' that is the Supply Chain and IT elements of any business being out of synch. Principally the CIO focus is on data that sits internally in the organisation - a large element of the data required to run a Supply Chain sits outside of the boundaries of the organisation, so these two key elements of the business HAVE to work closely together to create the Strategic Roadmap for Supply Chain.

A number of areas of key focus: The development of Visibility and Data Quality end to end, a joint approach to the strategic digital architecture of the business, cooperation in the design and creation of the network ecosystem of suppliers, partners, processes and technologies, agreement and joint approach to new technologies such as IoT, AI and Digital Twins, and the new skills required to operate in these areas, and working together to deliver cost and working capital improvements.

4. Focus on Value in the Supply Chain

In many cases, the focus has started to transition away from the traditional pure cost and on time, in full (OTIF) deliverables. Instead, it is starting to centre on customer impact, product availability and ‘value’. In my recent experience, many companies have prioritised the availability of goods ahead of cost during the past 18 months.

However, most companies are starting to see the true end-to-end value of the supply chain. By identifying issues and opportunities across the entire supply chain, businesses will start to see the true value of the supply chain function and the benefits it can bring to the business.?

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5. Supply chains get a change in scope?

Interestingly, many of the disruptions that we have seen have started on the supply side. This is an area that needs to be regulated and systemised to a far greater degree.?

In order to achieve this, a business needs to move? away from purely procurement-driven cost negotiations. The scope of the function could be stretched to encompass inbound operations to manufacturing and supply procurement. That allows the function to start to drive real end-to-end value for its organisations.

To me, that creates a perfect environment for Chief Supply Chain Officers to become highly influential. I think Alex Hersham said in May that 2021 was the year of getting it done, and 2022 will be the year of strategy. I have to agree.

Given those changing responsibilities, what skills (and capabilities and experiences) will be important for the SC Leaders of the Future?

So the Opportunity for Supply Chain leaders to really impact and influence the business is there - organisations have recognised - too late in many cases - the importance of the Supply Chain to the efficiency and healthy running of the business.

We, as Leaders, now need to identify these skills, experiences and capabilities that we have to assimilate in ourselves and in those that we see around us who form the new cohort of supply chain leadership at the top of enterprises.

There are a fundamental set of skills that ANY good leader in any area of a business HAS to develop - supply chain or not - and these haven't really changed? - Financial / Commercial competence, emotional intelligence, people management skills, Decision making, Market and Industry awareness, influencing skills, enhanced communication skills. Be it Finance, Marketing, Sales or People Management - those skills are mutually relevant.

In addition there are a number of specific enhanced skills that Supply Chain Leaders need to? develop to ‘fit’ the current status of the supply chain.

1.Gaining a Greater Understanding of Key People Issues

People are and will increasingly be at the core? of real success in Supply Chains: an enhanced understanding of People Strategies is essential to maintain and grow. Typically supply chain is responsible for a significant proportion of the people in any organisation - and SC leaders have to start to develop an elevated understanding of the implications of resourcing, talent and skills and the impact on their ability to deliver the supply chain service that is needed in three areas:

• The AVAILABILITY OF RESOURCE - we have all seen & continue to see the impact of resource shortages in manufacturing and transport and they continue to be a key driver of success in the future. We have to find solutions.
• The WAR FOR TALENT - how do we attract, train, retain the people, the talent and the skills that we need to maintain and grow our supply chains. That might include completely redesigning the work experience in a business.?
• The ever-changing SKILLS BASE required to run and participate in the Supply Chain. The skills that are key now are NOT the skills that will be necessary in the future. So how do we very quickly and in a very agile way identify, and train for these new skills.?

2. Developing Learning Agility

This is a great descriptive that I learned from Lucy: Learning Agility dictates how we can figure out a way through a new situation without actually knowing what to do, by using past and present experiences to make sense of an uncertain situation.! An absolutely perfect skill for these current crisis-ridden times!? That? encompasses three areas of learning for Supply Chain Leaders:

• Going forward there has to be a real willingness to learn from past mistakes.? As an industry we have been asleep at the wheel and have? failed to do this over the past 100 years: that has led to stagnation and lack of velocity in the development of our industry. Tsunami’s, Volcanoes, Wars etc? have frankly illustrated the fragility of our supply chains - but we still continue to? design our supply chains based on the perpetual ‘good times’ of JIT, Lean, globalisation and ever low manufacturing and movement costs. Leaders have to have the ability and the skills to learn from what has failed in the past and build anew - not to rebuild in the same image.
• Leaders will need to become instantly relevant in new areas of background knowledge: new technology, ESG, Automation, e-commerce, globalisation are four of them.? SC Leaders don’t now have the comfort of time and space in developing responses to these new buffering forces - they have to have an instant view.
• That naturally leads to Supply Chain Leaders needing to be Creative and have the ability to innovate on the move. We have to understand how we can adapt the current networks to cope with an increasingly prevalent omni-channel future and find different ways of doing things.?

3. Embracing Technology, Data and Analytics

Our supply chains are as much about data and the power of data as they are the movement of? things. Supply chains of the near future will be digitally connected ecosystems. Leaders will need to be highly analytical and digitally / technically proficient in the post covid age. An increasing proportion of companies are seeing supply chain as a top 3 digital business investment area. Improving supply chain performance means that supply chain leaders, in their new c-level roles, will need to be able to demonstrate and manage RoI for new digital initiatives and be deeply involved in the organisation's digital strategy. They will also need to work closely with the CIO and other cross functional teams to develop aligned digital strategies and solutions.

4. Robust Risk Management

Businesses are teeming with uncertainty at the moment - that uncertainty breeds a lack of confidence. CSCO’s need to develop a Radar for Risk and have the ability to convert that Risk into Supply Chain Resilience. They have to have the ability to look at things from the perspective of change, and deliver resilience, flexibility and agility in the solutions that they create. In the face of material shortages, global network costs and failures, climate drive disruptions, supply chain leaders have to move from reacting to risk to expecting and planning for risk.

5. New Teams Doing New Things

As we move forwards, there are increasingly new expectations of the CSCO. They? will need to start to think about how they develop great teams around them with very different skill sets: mathematicians, analysts, bright grads - with different profiles from the typical? profile in some current roles in Supply Chain. That will force us all to look closely at Diversity and Inclusion policies in our organisations. And somehow we need to be able to balance that with experience:? failures of the past need to be the basis of the growth of the future, so we need to find a way of maintaining ‘experience’ in the supply chain. How we carefully interlock? the Advisor and Non Executive Director into ways of working will become a key part of our structures going forwards.

Good leaders are good leaders, but Supply Chain Leaders need to accept that the skills and capabilities of the past 20 years will change and we all have to accept - quickly - that we have to learn new things and create organisations in new ways.

The next 12 to 24 months will be extremely interesting for the supply chain function. I believe we may start to witness undiscovered benefits for businesses who decide to adapt their supply chain function for the future.

Part 2 of the Article - looking at the immediate actions that Supply Chain Leaders can take post pandemic - will come out tomorrow. See you then!