While it still may be hard to explain what supply chain management is to those outside the profession, C-level executives are increasingly aware of the crucial role that the discipline plays in overall business strategy. That was the main message conveyed in the general session that opened CSCMP's 2015 Annual Conference, held in San Diego at the end of September.
The continuing mystery of supply chain management was illustrated in Robert Martichenko's acceptance speech for CSCMP's Distinguished Service Award. The chief executive officer (CEO) of LeanCor, a consulting and third-party logistics firm, charmed the audience with videos showing his failed attempts to explain his job to his two young daughters. The video ended with the girls concluding that their dad's job sounded hard, and that they were not interested in doing it themselves.
Martichenko's family may not understand the value of what he does all day, but Starbucks CEO Howard Schultz, who gave the conference's keynote address, certainly does. During a one-on-one interview with incoming CSCMP Board of Directors Chair Kevin Smith, Schultz referred to the supply chain organization as the "primary co-author of our business."
"You cannot scale a company of any kind without the skills and base of a supply chain," he said.
Schultz knows this from experience. In early 2008, when he returned to the helm of Starbucks, he confronted a supply chain that was inadequate for a company of its size. At that time, there were few effective supply chain management processes in place and no metrics to measure service performance. When measurement criteria were implemented, it was found that fewer than half of all store orders in the United States and Canada were delivered on time.
"Growth and success cover up mistakes," Schultz said, adding that supply chain management and human resources (HR) are two functions that are often overlooked in such situations.
Nearly eight years later, Schultz appears to have a deeper appreciation for the role that human resources and supply chain play in his company's success. He advised attendees in the packed auditorium not to "look at the function of HR and supply chain as the last thing. Think about them as the first thing."