A supply chain executive must be conversant in the new lexicon of standards, certification processes and downstream customer requirements for specified suppliers. This is a continuing education requirement necessitating high “learning agility.”
2. Business acumen in commodities trading and procurement agreements.
The market volatility and indexing of many key components is creating a “stock exchange” transactional opportunity for energy, basic materials and purchased components. Consequently, the 21st century supply chain professional must be highly competent in negotiating complex and dynamic agreements in the “buy/sell” space, as well as hedging in what we have traditionally viewed at opposite ends of the safety stock and just-in-time delivery inventory management approach.
3. Corporate and global citizenship.
Today’s supply chain leaders have a real opportunity to break out of the “dungeon” and play a substantive role in their organizations’ development of corporate citizenship and sustainability efforts. Those who do will change the dynamic of the business and create clear customer preference for their products and services. Corporate social responsibility (CSR) is becoming widely viewed as a bottom-line issue. The U.S. Department of Agriculture Economic Research Service reports that in 2005, 32 of the top 100 U.S. companies published standalone CSR reports, and it is safe to assume the number has increased since then. These CSR reports are voluntary and are issued in addition to the traditional annual financial reports. Rest assured that the sustainability of the corporate supply chain is part of the CSR reporting picture.
4. Innovative thinking about products and services.
Best-in-class supply chain executives will be entrepreneurial and will design programs and strategies that utilize the internal supply chain and tap into consumer interest in green issues.
An outstanding example of such innovation is the campaign launched in May 2008 by the Naturalizer division of Brown Shoe Co., based in St. Louis. For one week, consumers could return a gently used pair of Naturalizer shoes to any company retail store. Those shoes and a new pair from production overruns would be donated to the charity Dress for Success, which assists needy women. Consumers would then receive a 20 percent discount on a shoe purchase. Overall, consumers were incented to purchase new shoes, the company eliminated potential waste and thousands of women received much-needed shoes. Needless to say, this was a winning outcome.
5. Excellent communication capabilities.
Supply chain executives must lead the effort to develop and manage the scorecard with suppliers regarding complex certification, chain of custody and verification processes in order to move the sustainable supply chain forward within their organizations.
End users are not only creating preferences in certification and traceability methods for sustainable products and services but also are making sustainability a “must have” in purchasing decisions. Consequently, supply chain executives must be able to communicate effectively with internal and external stakeholders in order to properly manage certification processes, the meeting of specific standards and the development of new standards.
New Approaches for the New Economy
Just as we were getting comfortable operating in a global economy, we now discover that we face a new global economy. Energy and input costs are on the rise, there is heightened attention on decisions involving extractive versus renewable resource options, and procurement organizations must juggle more sourcing options and market factors than ever before.
Supply chain leaders must take a holistic approach in order to compete in this new economy. Decision making based solely on cost no longer suffices. Therefore, organizations seeking to become sustainable supply chain leaders must ensure that their procurement executives have the skills now needed.
Assessment of existing executive competencies can be used to design appropriate and effective development programs, and recruitment plans can be designed to ensure that new hires fill an organization’s skills gaps. Strong management leadership is the most important ingredient for succeeding in the complex world of sustainability, and best-in-class companies are bolstering their procurement talent management efforts.