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

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


Similarly, the supply chain leader does not have to be an "IT person," but an understanding of its function and often its potential competitive advantage is crucial. It is important for the supply chain leader to sufficiently understand new technologies so that the leader can effectively challenge the business case. Most firms that bought leading-edge supply chain systems several years ago acknowledge that they use only a fraction of the true capability of the software and an even smaller fraction of the promised capability. The leader must constantly challenge the supply chain to justify new information technology and push for its full realization when implemented.

The environment surrounding global supply chains is changing at an almost unimaginable rate. New forms of technology, competition and buyer demands — all at an increasing rate of change — make it imperative that supply chain leaders constantly "take the pulse" of their environments and prepare to meet the changes. As one CEO remarked to me: "Something is happening today that will put my company out of business. It is my job to figure out what that something is and deal with it before that happens."

Leaders grow other leaders. A supply chain cannot survive long term on the shoulders of one leader. Effective supply chain leadership means identifying and nurturing rising talent, both within the leader's company and within the organizations of supply chain partners.

Thinking Cross-functionally

I point out in every book that I write that "what gets measured gets rewarded, and what gets rewarded gets done." Leadership in supply chain management implies a commitment to developing key performance indicators (KPI) of success in the supply chain and then rewarding anyone in the supply chain that can affect these KPIs for driving them in the right direction.

Finally, a supply chain leader cannot be bogged down in the traditional thinking of the function in which they were trained. Effective supply chain management requires coordinated activities across the marketing, sales, logistics, production, procurement, accounting and finance functions of all the supply chain partners. Without an understanding of the vital roles all these functions play, and rewarding them for playing those coordinated roles, the supply chain leader will not drive performance that ensures the long-term success of all the companies in the supply chain.

At this point, you could argue that the supply chain leader must have a skill set that truly differentiates him or her from traditional managers. I agree with this assessment and argue that this is a good thing. Success comes from distinguishing the performance of the individual, the company and the supply chain apart from "the pack." As I often tell supply chain executives, "If this were easy, everyone would do it, and then there would be no competitive advantage." Successful supply chain management requires setting yourself apart from the pack, and it is the job of the supply chain leader to drive this success.

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