By Karen West
For years, chief supply chain officers have been urged to become strategic partners to their CEOs, wield the supply chain as a potent competitive weapon and join the conversation at the top leadership table. Many have done so, but they know that to succeed they must drive the strategic, global perspective far deeper into their far-flung supply chain organizations by developing the business partnering skills of their mid-rank supply chain personnel.
That can be a tall order.
Many supply chain personnel have been confined to narrow roles such as purchasing and contract writing. They have not had access to the kind of generalist business experience that would enable them to partner with business unit heads and other executives in their day-to-day activities. In large companies, with complex organizations, midlevel supply chain executives often focus only on the business to which they are locally attached, with little global perspective and with the chief aim of seeing that the business is supplied at the lowest cost. Further, many have had little opportunity to develop the leadership and influencing skills needed to become trusted business partners.
These limitations may be self-imposed or may be imposed by their companies, but nevertheless these executives represent a huge reservoir of untapped talent. If given the chance, they can help make the visions of chief supply chain officers an everyday activity at every level of their companies — taking a global perspective, proactively bringing business opportunities to their unit leaders and inspiring other supply chain personnel to follow their example.
Adding Value to the Business
In a world where business moves at warp speed, most companies need these new-breed supply chain executives more than ever but lack the time to devote years to developing them. That was the dilemma faced by one of the world's largest industrial companies, with operations and business units around the world, organized both geographically and by segment of the value chain.
Initially, the company (which must remain unnamed for reasons of confidentiality) didn't understand the real nature of the challenge. Because external benchmarking had revealed that they lagged competitors in terms of supply chain costs, leaders thought that they simply needed to wring more costs out of their operations. But they soon realized that simply cutting costs in procurement wasn't the real problem. They needed genuinely global supply chain management that encompassed not only costs but also value and the strategy, plus the ability to extract business opportunities from the supply chain. That, in turn, meant not necessarily better procurement, but supply chain management executives who could think globally and act as business partners locally.
Feeling it had little time to lose, the company undertook what might be called an extreme makeover of its supply chain executives, transforming midlevel executives into strategically minded business partners in a remarkably short time.
To guide the project, the company first created a "board" representing various stakeholders in the project, including heads of operations, key human resources executives and those highly skilled in project management who knew the business well. A project team was formed that consisted of company representatives and outside consultants skilled in change management, talent assessment and leadership development. The team set out to identify the people throughout the supply chain organization as well as external candidates who might have the potential to make the transformation to the new role.
The team first developed a model of the technical and leadership competencies the new role would require. Technical competencies included:
- Experience inside and outside the industry
- Experience developing a market sector strategy
- Ability to select best value in the supply market
- An understanding of the supply market and associated risks
- Experience contracting, including planning and executing contracts
- Financial skills
- Project management skills