By Editorial Staff
The role of the chief supply chain officer is becoming a reality and a necessity within companies, and the role is helping to elevate visibility of the supply chain to the C-level within organizations.
That was a key takeaway from the "Chief Supply Chain Officer Strategic Agenda" report presented at the CSCO Summit, held June 15-16 online with registered participants that included more than 2,500 senior global supply chain, operations, procurement and logistics executives, including many at C-level.
The event, free for registrants, offered a no-cost venue in which to hear leading practitioners and analysts share their thoughts on the progress of supply chain as a function, and to interact with other executives in a virtual environment. (Supply & Demand Chain Executive was a media partner to the event.) Presentations during the event were recorded and are available, along with slide decks and podcasts of the speeches, at www.CSCOSummit.com.
Top Pressures for SCM Improvement
Didier Chenneveau, executive vice president and chief supply chain officer at Korea's LG Electronics, joined top industry observer Nari Viswanathan, vice president and principal analyst in the Supply Chain Management Practice at Boston-based Aberdeen Group, in presenting the results of the CSCO summit survey. The final report, which was available to participants in the CSCO Summit and is posted to the summit Web site, featured insights from the survey of 391 supply chain professionals, including 50 C-level executives.
The study found that the leading pressure forcing companies to focus on improving their supply chain management was the increase in customer service demands and increased demand volatility, cited by 56 percent of all respondents to the survey. That was a hopeful sign for the economy, in a sense, when contrasted to the low number of respondents — just 9 percent — who said that they were under pressure due to a significant decrease in demand for their company's products.
Four in ten cited the rising business complexity of managing increasing global business networks. Interestingly, while 21 percent of the total respondents saw economic and financial volatility as a leading pressure for SCM improvement, nearly one-third (31 percent) of C-level respondents checked that box, suggesting the financial issues still resonate more strongly in the C-suites than further down the corporate ladder.
Chenneveau noted that LG Electronics, which had revenues of $50 billion in 2009, began focusing more heavily on improving its supply chain performance as part of its initiative to improve its market share position to the top three in each of the key markets that it served between 2006 and 2010. That involved moving from a "push-driven" supply chain that was totally in-sourced to a more demand-driven, technology-enabled model. The result was that by this year, LG in fact was in the top three in most of its markets. "Supply chain has played a critical role" in this transformation, Chenneveau said.
Collaboration as Culture
In a session called "Supply Chain Transformation Enabled through Collaboration," Jon Giacomin, executive vice president of pharmaceutical operations at Cardinal Health, joined Mike Fleming, corporate vice president of supply chain at Motorola Mobile Devices, in discussing how their respective organizations transformed and realigned their supply chain strategies in order to adapt to changes in the marketplace and ensure their companies' future growth.
Cardinal Health was faced with a changing business model, rising costs and higher customer expectations. Meanwhile, Motorola Mobile Devices had made the decision to focus its portfolio on the growing smartphone market. Both companies successfully leveraged end-to-end collaboration to transform their respective value chains, and each has been able to engage customers, increase visibility and reduce inventory through the pursuit of world-class supply chain performance for their respective customers and shareholders.
"Our business has transitioned from being very capital intensive to now being one where we're driven by the efficient use of capital," said Giacomin of Cardinal Health's business transformation. "We've gone from siloed information to information sharing up and down the supply chain. And, with that, we've gone from an insular focus to an end-to-end focus starting with our customers and going all the way back to the manufacturers."
For his part, Fleming noted that a key success factor for transformation was defining a high-level direction of the supply chain, focused around simplification, velocity and deeper supplier relationships. "I found it important to get the team thinking about [those three factors] to the extent that it became almost embedded in their thinking," he said. "Once it becomes embedded in their thinking, it becomes almost part of their culture, [and then] things like build-to-order, direct ship or range-based forecasting initiatives really become a natural output of this culture."
Supply Chain in the Cloud
Aberdeen's Nari Viswanathan returned on the second day of the conference to participate in a session called "Cloud Logistics: What It Is and Why It Is Poised to Transform the Supply Chain Technology Landscape." Viswanathan joined Peter Weis, vice president and chief information officer with Matson Navigation Company, and Greg Johnsen, executive vice president and co-founder of GT Nexus, in discussing the rapid advance of Cloud-based models in the logistics and supply chain space.
Cloud computing is rapidly taking hold in all areas of business IT because of what its proponents view as its superior economics and its lower risk profile. Companies typically can take advantage of Cloud-based solutions without making significant investments in IT infrastructure, and often with minimal involvement of their own IT personnel. Advocates of the Cloud say that finally makes possible the inter-company collaboration and information sharing that is so foundational to transforming global supply chains. In this panel discussion, the three participants discussed how Cloud is transforming operations and creating real, sustainable value for companies today.
Other sessions during the summit covered topics ranging from supply chain visibility and supply chain risk management to leveraging banks as effective supply chain partners and moving to design for supply chain. More information on the CSCO Summit, along with recorded presentations (available for viewing on-demand) and other materials, is available at www.CSCOSummit.com.