The Missing Chief Supply Chain Officer

A few weeks ago, we asked our Indago members a simple question: Does your company have a Chief Supply Chain Officer (CSCO)?

Only 21% of our member respondents said their companies have a CSCO; an additional 38%, however, said that their companies have a supply chain executive with comparable C-level role and responsibility. In short, the supply chain function is represented at the executive level for the majority of our respondents.

Source: Indago (n = 29)

However, a relatively large percentage of the respondents (41%) said that their most senior supply chain executive is below the C-level. This correlates with the 44% of the respondents who said that the supply chain function is only “Sometimes” or “Rarely” involved in C-level strategic planning and decision making.

Source: Indago (n = 29)

“Yes, I believe that having a CSCO would be beneficial,” said one respondent. “I often see decisions coming from the C level that have not considered [their] impact over the entire supply chain. A recent one that comes to mind is a reduction in days of inventory on-hand, a directive that […] drastically increased freight expenses and negatively impacted fill rates to customers. Someone on the finance side said, ‘Look we can improve our cash flow if we reduce inventory on-hand,’ but they failed to calculate the increase in freight costs and the cost of having lower customer satisfaction. I’m pretty sure this directive cost us more than it saved.”

Another respondent had a different perspective: “I do not believe that more companies should have a CSCO. A Chief Operating Officer (COO) with the right VPs, directors, managers and admin staff will be more effective than having a specific CSCO. Supply chain has been somewhat void from the boardroom, but I see this mindset changing. Leaders that see the future state of business evolving with SCM as a critical success or failure of a company will value the input from supply chain knowledge.”

Here are some additional value-added comments from our Indago members, who are all supply chain and logistics professionals from manufacturing, retail, and distribution companies:

“Yes, more companies should have a CSCO as the supply chain is critical to the bottom line. I see its influence growing as companies begin to realize the tremendous value an optimized supply chain can bring.”

“The supply chain role is typically relegated to a subordinate role to Operations or Marketing. When looking at best-in-class organizations, those that have a strategic voice in the C-suite fare substantially better than those that are focused only on production or sales. Take for example Tesla, Microsoft, The Home Depot vs. their competition.”

“The executive board needs one or more supply chain voices that have true influence. This ensures balance between supply and demand strategies within board discussions.”

“I think the larger the company and more complex the supply chain, the more that company needs the most senior supply chain leadership. The title is less important than the role and influence.”

“Yes, more companies should have a Chief Supply Chain Officer. Supply Chain has a direct impact on the bottom line as well as the brand and reputation of a company (Chipotle is a good example of when things go wrong in the supply chain). Unfortunately, most companies don’t realize the importance of supply chain until an issue arises.”

Echoing that last comment, if companies don’t recognize the importance of supply chain management today in light of the disruptions caused by the COVID-19 pandemic, they never will.

Are companies with Chief Supply Chain Officers better positioned to respond effectively to disruptions? Do you agree with our Indago members about whether having a CSCO is important or not? Post a comment and share your perspective.

Then again, as I argued back in January 2016, maybe now is the time for supply chain executives to step into a new leadership role, that of Chief Network Effects Officer (CNEO).

Join Indago 

If you’re a supply chain or logistics practitioner from a manufacturing, retail, or distribution company, I encourage you to learn more about Indago and join our research community. It is confidential, there is no cost to join and the time commitment is minimal (2-4 minutes per week) — plus your participation will help support charitable causes like JDRF, American Logistics Aid Network, American Cancer Society, Feeding America, and Make-A-Wish.

After joining Indago and responding to your first survey, you will receive a free copy of our 88-page Indago Micro-Surveys Reports Volume I, a compilation of the 39 micro-survey reports we completed from March 2019 through March 2020.

(If you are a technology company, third-party logistics provider, or other company interested in obtaining the report, please contact us for how to purchase. In keeping with our “Research with Purpose” motto, a portion of the purchase price will be donated to our charity partners.)

Finally, please follow us on LinkedIn to stay informed of our latest research results and news.