2006 Executive Education Guide: Critical Skills for Effective Supply Chain Leaders

Successful supply chain executives differentiate themselves — and their companies — from the competition


In my 2004 book of the same name, I defined Supply Chain Management as the "systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole." Obviously from that definition, someone has to lead the coordination in the supply chain. But what leadership skills are needed in supply chains to accomplish this?

Before we get to leadership skills, this definition implies a necessary understanding by the supply chain leader not only of the traditional business functions of finance, marketing, production, accounting, sales and procurement, but also of such processes that flow across companies in managed supply chains as customer relationship management, procurement/supplier relations, operations/logistics management and process design. Customer relationship management encompasses the traditional functions of marketing and sales, but also enfolds the leadership issues of identifying the customers that are important enough to warrant a long-term relationship, taking the initiative to build the relationship (often from the top down in the customer and seller organizations), and motivating supply chain employees to implement the details of the relationship. Similarly, procurement/supplier relations involves the same selection, building and motivating activities at all levels with select suppliers.

Leadership in operations/logistics management requires a grasp of the "nuts and bolts" activities required to source, manufacture, store and deliver the products/services the customer has asked the supply chain to provide. Process design takes a proactive approach to the development of the supply chain processes just discussed (as opposed to letting processes "evolve" as contingencies necessitate).

Taking a Supply Chain Orientation

To lead a supply chain through these activities, a supply chain orientation is required. A supply chain orientation is, quite simply, the vision of the leaders to see the system-wide, strategic implications of coordinating across several companies the various activities and processes required to create and nurture a managed supply chain. Such an orientation requires the leadership skills of:

  • A collaborative, teamwork-oriented management style;
  • Operational excellence;
  • IT proficiency;
  • An ability to assess environmental trends;
  • Mentoring;
  • A metrics orientation; and,
  • A cross-functional attitude.

Building a collaborative, team-oriented culture starts with the leader's realization that the company must work together with supply chain partners to deliver value for consumers. In practice, such a culture encompasses the codes of conduct in the process of pursuing mutual as well as individual supply chain goals. Broadly speaking, codes of conduct include the willingness to share information with partner firms, flexible actions such as quickly adapting to changing supply and demand for the good of the entire supply chain, and performing mutual responsibilities with a team spirit when the supply chain faces threats and/or a part of supply chain process fails. Narrowly, codes of conduct include "vendor codes of conduct," "labor regulation" and/or "business ethics codes." Certification programs may be available, which are arranged or offered by a supply chain leader.

Operational excellence means the supply chain leader has an intimate understanding of the operational details in sourcing, transforming and delivering products/services when and where the ultimate customer desires them. This does not always mean the leader's skills fall in the disciplines of operations and/or logistics, but it does imply an understanding of their strategic, cross-company importance and an ability to manage these often-disparate and geographically dispersed activities.

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