Supply Chain Leaders in the C-Suite

For many companies, the products/services they sell include components supplied by one or more "sources". As such, the performance of each "source" (e.g. quality, price, fulfillment, support) impacts the company's performance in many ways (think profitability, customer retention, staff turnover, reputation, etc.).

Until recently, Supply Chain leaders typically reported into the CFO. Gradually, innovative organizations are signaling their recognition of the importance of Supply Chain Management by having the senior leader of this function report directly to the COO or President. And even if the function doesn't report directly to the president, Supply Chan leaders are being invited to attend c-suite meetings with much greater frequency.

Unleashing the full value of a company's supply chain is a strategic undertaking which has the potential to impact the company's bottom-line as much as any function. Howard Schultz, CEO of Starbucks, made this clear when he stated, “Supply chain not only has a seat at the table, it is a primary co-author of the strategy of our business.”

Supply Chain Management encompasses an array of functions. As expansive as the scope appears, the structure of each organization will differ by industry and the extent to which companies outsource and/or integrate suppliers into the company's processes and systems. In larger relationships, suppliers may agree to share data, perhaps even use common systems, or embed resources (people, etc.) within the customer's operations. In doing so, the supplier gains deep, instant insight into the customer operations, demand planning. In such instances, the supplier can play a very meaningful role in identifying opportunities for efficiency, innovation and competitive advantage.

Supply chain integration takes many forms -- Dupont suppliers feed data into their systems so they can forecast production -- Zappos customer-facing culture of service (surprise & delight) is embraced by logistics suppliers, who creatively find ways to expedite customer deliveries.

In companies where the vision, mission and goals are clearly articulated, and customers/suppliers are treated as valued partners, the opportunities to benefit from Supply Chain collaboration are immense. Realizing this potential requires a commitment to basic cultural alignment and open communication lines between supplier and company leadership. Acknowledgement of shared values by leaders of both supplier and company enhances the likelihood of success when collaborating solving problems. On the flip-side, the absence of such alignment leaves the supplier's customer vulnerable to competitors who excel at forging deep, synergistic relationships with customers. Examples of collaboration: BPO exercises, buying cooperatives, facilitating bench-marking, best practice sharing venues.

Problems are inevitable. Supply chain disruption and/or bad publicity for suppliers can have a ripple negative impact on your company. The resiliency of your company and the involved supplier(s) will be higher when Supply Chain leaders are in the company's c-suite. Having Supply Chain leadership in the c-suite can help expedite awareness to problems, the flow/accuracy of info needed to assess impact, evaluate options to mitigate negative impact, engage in collaborative problem-solving, or pursue alternate sources.

If you company is among those who recognize the importance and benefits of Supply Chain Management's participation in top-level decision-making, consider yourself ahead of the curve. The trend of Supply Chain's presence in the c-suite is certain to continue. The function itself is also certain to change, as companies continually strive to become more customer-centric, with products and services needing to be tailored to customers buying thru whatever channel is most convenient, cost-effective. Supply chains, and the professionals within the function, will need to be more agile than ever. If you think the level of disruption and digital transformation has been fast and furious, don't blink... it's going to accelerate.

When you think about supply chain innovation, and the companies that have elevated the importance of Supply Chain to the success of their core business, a handful of global companies come to mind: Amazon, Apple, GM and Johnson & Johnson. Amazon has taken Supply Chain management and integration to new heights. Jeff Bezos, their CEO, has repeatedly recognized the importance of an exceptionally well managed supply chain. He sees "frugality" as a constraint that spurs innovation. Mary Barra (GM) and Tim Cook (Apple) both had supply chain responsibility prior to becoming CEOs. At Johnson & Johnson, CEO Alex Gorsky recognized Courtney Billington's promotion from a senior Supply Chain leader to division president of one of their operating companies.

One thing's very clear: more C-suite caliber leaders will be needed to navigate the complex, changing realm of Supply Chain management and derive maximum organizational benefit. If you're a supply chain professional, there's no time like the present to invest in your future, as the prospects for career growth has never been higher.