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So you think you're ready to be chief supply chain officer?
Ten years ago, a company's logistics leader toiled in relative obscurity in the back office. That role was viewed as being narrow in scope and having limited strategic value to the organization, and it had little visibility to top management.
Today, the role of supply chain leader has been thoroughly transformed. In many of the world's most successful organizations, top supply chain managers have broad responsibility for all decisions about fulfillment, logistics, customer service, and related technology. The supply chain leader also serves a critical strategic role in overseeing spending on everything from procurement through delivery of finished goods, which can represent 50–70 percent of a company's total costs. The focus for supply chain leaders is not just on managing costs, however, but also on maximizing a company's profitability by improving asset productivity and even identifying new sources of revenue generation.
[Figure 1] Characteristics of an effective supply chain executive Enlarge this image
Mismanaging the supply chain can have dire consequences for a company. With so much at stake, the supply chain leader at many companies today has been elevated to the executive committee, manages a global team, and may command compensation well into the seven figures.
As the scope of responsibilities for supply chain executives has grown, the characteristics and experience required for the top leader have changed, and the career path for supply chain leadership has taken a dramatically different course—one that increasingly must include international assignments and broader exposure to the business.
So, are you prepared for a supply chain officer's role? To get a better handle on your readiness for the job, it may help to understand the emerging profile for the top supply chain leader. Given the increasingly strategic nature of the role, it's not surprising that the skills and experience required for top supply chain executives (summarized in the box at left) are many of the same qualities I look for when recruiting executives for CEO and other key management positions. Here is my list of must-have qualities:
Leadership: First on the list is leadership. The nature of the position requires that supply chain executives be able to build collaborative interpersonal relationships and, in turn, earn credibility for themselves and for the function across the entire organization. Top supply chain leaders need to be team builders and people managers. They have to be excellent communicators and influencers, able to consistently communicate their strategic vision across multiple audiences. They need to be motivators who can manage teams across distances. This includes engaging people who may be in far-flung operations or employees of external partners.
Global orientation: With the emergence of China, India, Eastern Europe, and other parts of the world as international commerce centers, supply chain executives must manage complex relationships in these markets as well as in more traditional ones. This requires having a truly global mindset. In fact, I can think of very few supply chain assignments where a global orientation was not deemed critical.
Many executives benefit from having firsthand experience with the cultures and consumer expectations in countries where they do business. If an overseas assignment is not realistic at this point in your career, cultivate a global mindset through thoughtful international travel and by working closely with overseas colleagues and partners to understand their priorities and concerns.
Integrated operational excellence: Today's supply chains are more dispersed; processes and systems are therefore more complex. Organizations need executives who are knowledgeable about functions throughout the supply chain and who can leverage that knowledge to capitalize on business opportunities.
The successful supply chain executive also must possess broad, general business experience in buying, planning, manufacturing, and delivering. I look for executives who have a history of managing multiple initiatives simultaneously and a breadth of experience across their business and even in other industries. These leaders are able to see the big picture as well as manage day-to-day details.
Strategic thinking: Supply chain leaders need to be strategic thinkers who are able to position their organizations for the future. They must be comfortable establishing and articulating long-term supply chain strategies in rapidly changing environments. They must be able to manage the constantly moving components of the supply chain, anticipating problems and opportunities before they arise.
Supply chain management today is shifting away from functional responsibility to the larger role of driving an organization's financial strategy to influence the company's success. How can supply chain executives develop strategic thinking skills? First, they must thoroughly understand the drivers of their business and the role of the supply chain in achieving their organizations' strategic and financial objectives. Working with outside consultants and adopting best practices from within a specific industry and beyond is another way to hone strategic thinking skills.
Technically savvy: Today's supply chain talent must have a solid grounding in technology. Ultimately, technology makes everything happen and brings everything together—it's the prime enabler of the supply chain. A supply chain leader doesn't have to be a technophile, but he or she must be able to manage technology and work closely with technology teams to understand a company's IT capabilities and identify opportunities to improve supply chain processes.
Preparing yourself for the new profile
Today, the demand for leaders with broad supply chain and business experience far exceeds their availability. Companies face intense competition for experts in the areas of sourcing and procurement, manufacturing and production, distribution, logistics, and end-to-end supply chain management.
I expect demand for high-level, experienced supply chain executives will outstrip supply for many, many years to come. In the meantime, companies are employing a number of tactics to get the talent they need, including recruiting the best and the brightest from some of the world's leading universities—and they are finding a receptive audience among promising students who see an exciting and rewarding career path in supply chain management. They also are looking for experienced supply chain leaders outside of their own industries. For example, one of my clients, a major oil company, recently recruited a top candidate from the computer industry who had extensive experience managing global manufacturing operations.
Supply chain executives, who traditionally have taken a fairly hands-off approach to managing their professional development, must become more active and thoughtful in planning their careers. Learning the financial drivers of the business, taking international assignments, and getting broad-based exposure to the supply chain, the business units, and other functions within the organization will help them develop the perspective and expertise they need to lead today's global supply chain function. Up-and-coming executives also benefit by seeking mentors within the supply chain function and from the top ranks of management throughout the organization. Leadership seminars and similar types of training can provide great opportunities to develop additional skills.
Supply chain executives who adapt to this emerging career path and build the necessary skills and leadership capabilities will be ready to step into the chief supply chain officer role.
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