New Success Factors In Supply Chain Leadership

The pandemic crisis has disrupted operations across industries and geographies. It has been a challenge that has given organizations a unique moment to reimagine their supply chains. To enable a better way of doing things. This is operations in a new normal.

Leadership teams are now working to address their supply chain weaknesses that were revealed by the crisis. The impact of the pandemic on operations across the supplier base, with production and distribution at its heart are evident.

We now know that we are in this for the long haul we will need to develop an entirely new way of looking at how we sustain operations in a world that requires organizations to be more resilient and rapidly adaptable than ever: a shock-proof organization if you like.

All leaders now look to build plans to make supply chains far more flexible, agile and resilient. Those clinging to the inertia of the status quo will not survive. A good leader will consider bold moves to rebuild their organization through a cross-functional collaborative embrace. They will also be open to adapting to the supply chain shift in focus from execution to value creation to build the new shock-proof organization required.

There are four imperatives for leaders to build an agile and resilient supply chain: a shift in mind, skills, behaviour and systems.

Mind shift

Just as it did in the Industrial Revolution, the most significant change is not only in the physical, but the way we see things as a society and therefore, how we function in it. The day-to-day actions of employees across the line.

Leadership will take many forms across teams, and those who are best equipped are those that can be relied upon in an atmosphere of continual uncertainty. In addition, the leader who can collaborate and negotiate with others, and are therefore able to speak the language of peers from other functions in the company, is capable of end-to-end visibility and will be able to apply short term and long term thinking with a holistic view of the company.

They are the leaders who have shown that they are adaptable, resilient, open and collaborative in the face of critical challenges. These leaders will need to grasp the opportunity to drive their newfound responsibilities.

Skill shift

What stops you from adapting your practice quickly? I think we all know the answer: bureaucracy. How do we streamline unnecessary bureaucracy? By dispensing of rigid hierarchies and flattening the structure so that there are networks of teams; less time reporting, seeking approvals, and sitting in meetings. With fewer middle managers and span-breakers, this allows the system to respond quickly to emerging challenges and opportunities.

Leaders will need to navigate networks of teams with less rigid hierarchies to boost a company’s agility. Invest in the capabilities to empower leadership, teams, and technology. Those that do will thrive. In addition, the rate of technological and business-model innovation alone makes it nearly impossible for any single organization to do everything itself. That’s why leaders will be required to cultivate partnerships.

Working with partners in new ways is becoming the norm. These relationships are increasingly important in dealing with the pace of change, complexity, and disruptions. An understanding of this from a system-thinking perspective will give leaders a significantly better approach than those that are thinking about short-term gains.

Let’s consider supply chain managers, for example. The daily life of supply chain managers is full of challenging tasks: negotiating last-minute order changes with sales due to new customer requests; defining working capital requirements with the CFO for the next budget period, or reviewing network structures for new emerging markets with suppliers. This diversity is particularly driven by the cross-functional nature of the job: Supply chain managers interact with many departments and people within and across the organization.

Typically, they are flanked by analysts who are very focused experts who dig deep to solve challenges analytically. They can produce detailed production schedules, determine correct inventory levels, and optimize service levels but they can sometimes miss the value they are bringing to the company vision and the importance of demonstrating it to their peers and senior management to motivate and lead.

Leaders at every level are crucial to an organizations capacity to be rapidly adaptable and thus they will require soft skills that have not previously been deemed necessary. In supply chains for an instant, there has been less investment in these skills, which has resulted in managers who are focused on data and execution.

Exchanging ideas with colleagues, reading books and attending workshops and (virtual) seminars builds a network within an organization, which could extend to customers, making them aware of the consequences of decisions to other functions and aware of their positions in value creation from a customer-back perspective. A culture of adaptability relies on strong relationships that improve decision-making processes and anticipate the next shock while maintaining strategic focus.

Behaviour shift

Just because the times are fraught does not mean that leaders need to tighten control and micromanage execution. Rather the opposite. Because conditions are so difficult, frontline employees need to be liberated to take responsibility for execution, action, and collaboration.

The pandemic has seen small and dynamic teams, made up of people from different units in an organization but working towards a focused set of monitored and measurable objectives. Leaders have made this work by charging each team with a specific mission: an outcome that matters for customers or employees, empowering each team to find its own approach, and then getting out of the way. Having one fast, agile team is helpful, but having many of them across an enterprise, and enabling them with the right structures, processes, and culture, makes it possible for the entire system to move faster.

Leaders must assign responsibility to the line, and drive “closed-loop accountability.” That is, everyone working on a team must be clear about what needs to get done by whom, when, and why. Employees must also be equipped with the right skills and mindsets to solve problems, instead of waiting to be told what to do. What this means in practice is fewer meetings and fewer decision-makers in each meeting. Others are keeping larger 30- to 40-person meetings (so the people that need to implement the decisions are present) but cutting the number of people with a vote, it is quicker. There is also less detailed preparation for each meeting, fewer lengthy PowerPoint decks. And there must be a disciplined follow-up to make sure actions were taken and the desired results achieved. Such an approach both speeds up and improves execution.

The small group can quickly debate, narrow down options, and decide final resource-allocation targets. For example, consider that objectives and resources may be misaligned because decisions are made by the CEO and head of operations perhaps and not at the level they should be. Instead of using the allocation process to sort out what’s best for the overall strategy, they handle pitches distilled from division and business-unit leader, thus allowing them to maneuver to secure maximum resources for their units.

System shift

The COVID-19 crisis has forced organizations to adopt and apply digital technologies; leadership teams have reinvented core processes, adopted new collaboration tools, the cloud, analytics, and data-management technologies, to name a few. Consequently, people are interacting in new ways, from remote learning to distance meetings, greater centralization of planning activities and shorter planning cycles which are hinged on advanced-analytics techniques.

Most notably, the organizations who survived moved quickly to use data and analytics to shift capacity, secure vital raw materials, and reduce management processes to a few priorities. The challenge was for those organizations that lacked the basic technological understanding or struggled with inefficient digital technologies throughout the pandemic, such as in their supply chains and procurement.

Leaders need to drive technological acumen into all executives and measure their proficiency and improvement, through frequent assessments, kaizens, and skill-building sessions and certifications, just as you would measure profit targets.

Forward-thinking companies are now accelerating their capability-building efforts by developing leadership and critical thinking skills at different levels of the organization, increasing their employees’ capacity to engage with technology and use advanced analytics, and building functional skills for the future, such as next-generation procurement, Industry 4.0 manufacturing, and digital marketing and sales.

Conclusion

What should be retained from this period of pandemic shock, is leaders who build winning teams are those who pay attention to these shifts. Slipping back into old systems could be easy, but leaders must ensure that successes during the pandemic are firmly secured in the new operating model. This involves making permanent structural changes that promote rapid adaptability in ways that will inspire and empower employees. Those organizations who adopt these shifts to be agile and resilient in the face of uncertainty are those that invest in capabilities to empower leadership, teams, and technology to allow their teams to make rapid decisions and execute them. Even well-run organizations may find that they need to reinvent themselves more than once.