Supply chain’s long-standing image problem has at times masked the true importance of the function. Those who oversimplified the function as merely a means to transport products and parts from point A to point B often overlooked its strategic significance. As organizations today have become more complex and global, supply chain management has been charged with keeping pace. From R&D and product innovation to M&A and customer development, supply chain can touch nearly every aspect of the business. In light of the growing demands of the function and its rising prominence in global organizations, the game has been raised for supply chain leaders and their teams.
The increased demand for talented supply chain leaders has revealed some gaps in the talent pool. The most effective supply chain leaders are increasing their focus on building agile teams with the broad capabilities needed to manage an end-to-end supply chain. To do this, supply chain leaders (and their organizations) must commit to hiring and developing well-rounded supply chain executives with strategic orientation, business savvy, analytical skills, financial acumen, global perspective and broad knowledge of the organization. Leaders may need to look outside their industries to selectively add capabilities from best-in-class sectors and organizations, and also work to attract and retain the best and brightest young people into the function.
Dave Allen, former senior vice president of supply chain and operations at Del Monte Foods, noted that each function (including supply chain) has operated historically by solely focusing on itself. In a more global, complex world, that unilateral approach is no longer enough. As the aspirations for the function continue to grow, supply chain leaders’ capabilities must also evolve to meet those goals.
“At HP, the supply chain is crucial to the company’s earnings,” said Benoit Fagart, vice president of supply chain for Europe, the Middle East and Asia for Hewlett-Packard Company. “It is more and more a central control tower. Most operations are outsourced and, thus, supply chain plays a central coordination role.” Roberto Seibel, director of operations for Philip Morris, echoes the sentiment: “Supply chain is the heart of operations. At some point, everything goes through or touches some segment of the supply chain function.”
The new skill inventory
As the reach and influence of the supply chain function grows, expectations for its leaders are increasing as well. To reach the highest levels of supply chain leadership, executives must bring a range of skills to bear, from strategic ability to collaboration.
Strategic orientation and global perspective
The economic downturn tested the mettle of many organizations and demanded a more holistic, collaborative approach to weather the storm. In turn, management began to lean more heavily on supply chain leaders, drawing on their mix of short‑term and long‑term planning abilities and ideas to cut costs. Strategic business savvy and global perspective emerged as more essential characteristics for supply chain leaders. Executives say this combination is in short supply.
“Having a good understanding of how markets work in terms of local processes and trade policy is one of the bigger talent issues that we find when we think of the global supply chain,” said Robert Ware, vice president of global supply chain logistics at Applied Materials.
According Allen, it can be especially challenging to effect the scale of change needed if current supply chain leaders are more manufacturing-oriented than business‑minded or if their long tenure with a company renders them averse to the transformational and strategic change required to evolve the function. Additionally, Amit Chakraborty, senior vice president and general manager of Hasbro Far East, noted that executives in successful companies may be entrenched...