Here's something that should bring a little cheer to supply chain professionals who are toiling away in gray-walled cubicles, hoping, like riders on a carousel, to grab the brass ring and win a prize—in this case, a position in top management. A study by the consulting firm Tompkins Associates has found that the number of companies employing supply chain leaders at or above the executive vice president level has increased in the past five years. (For more about the study, see "Supply chain managers moving up the corporate ladder.")
That finding means that corporate boardrooms are awakening to the value an experienced and knowledgeable supply chain chief brings to the table. Why now? As companies strive to increase profits in a tough global economy, more of them are recognizing that well-run supply chains can both reduce inventory and increase sales—and that they need an expert hand to guide that effort.
Of course, the value proposition that's inherent in good supply chain management comes as no surprise to those of us who are working in or writing about this field. We know that changing the location of distribution centers and factories can cut transportation expenses. Applying demand forecasting software and network analysis can pare down inventory stockpiles and free up cash. Rationalizing stock-keeping units and better matching inventory with customer demand can improve the cash-conversion cycle. Selecting the right suppliers can ensure quality and, ultimately, customer satisfaction and loyalty. And these are just a few of the many supply chain initiatives that can save money while boosting profits.
The success of those tactics and strategies depends on the expertise of individuals with a strong understanding of the ways purchasing, manufacturing, and logistics interact. In fact, a supply chain executive who runs operations more efficiently, especially on a global basis, can make a notable impact on a company's balance sheet. No wonder so many CEOs nowadays want their companies' top supply chain executive to report directly to them.
For young folks who are starting out in this field and managers who are midway in their careers, the study's findings provide further motivation to work hard. Since more corporations are acknowledging the value of supply chain management to their organizations—and hence are willing to promote supply chain experts to positions of influence and recognition—it's worthwhile making the effort to gain more experience and knowledge. The brass ring beckons.