5 Reasons Supply Chain Managers Belong in the C-Suite
Published on 3 August 2020
Here’s why all supply chain leaders need to have a seat in the C-suite and/or boardroom.
If there’s one valuable lesson that companies learned from the COVID crisis, it’s that supply chains are much more than just conduits and cost centers. They are, in fact, value generators that—when managed properly—help improve the bottom line, customer service levels, employee retention, and many other key performance metrics.
Knowing this, more executives are raising their supply chain’s profiles within their organizations and giving supply chain leaders a place in the C-suite.
Supply Chain Leads the Pack
As more executives put their global supply chains at the center of their operational strategies, a growing number of supply chain leaders, executives, and managers are being given “voice and choice” in the corner office.
A widely-used term describing a cluster of a corporation's most important senior executives, the C-suite is the topic of conversation in supply chain circles these days. That’s because logistics, supply chain, and transportation are all contributing to the strategic moves that keep their companies profitable in a world where receiving, processing, fulfilling, and delivering orders quickly and accurately have become the hallmarks of good customer service.
Put simply, supply chain professionals are being asked to lead their organizations to success, rather than just helping to steer one aspect of those organizations (e.g., warehousing, distribution, transportation, etc.). Here are five reasons why:
Without a strong supply chain, nothing else gets done. In most organizations, the supply chain affects more than 37% of operating expenditures, according to CFO Magazine. It also has an important influence on revenue. “A company cannot produce and sell something if it fails to buy and receive the necessary raw materials. In addition, a company must deliver the finished product to customers, in a timely manner, effectively satisfying its customers’ own supply chain management (SCM) requirements.”
- Supply chain is a competitive differentiator. According to Accenture, supply chain executives see their functions within their organizations as either cost efficiency drivers (60%) or a support function (68%), versus a competitive differentiator (48%) or a growth enabler (53%). “This can leave significant value on the table,” Accenture states.
- CFOs can’t cover all the bases. In many companies, no one has been given the title and role of chief supply chain officer (CSCO) and there is no supply chain expertise in the C-suite. “By default, the chief financial officer often takes on that responsibility,” CFO Magazine points out. “The CFO probably does not have the time nor the expertise to also function as CSCO, but seldom is there anyone else to turn to. Certainly there is no one who has any comprehension of the full scope of what supply chain management (SCM), or the lack of it, represents to the company.”
- Supply chain is a competitive differentiator. Instead of just being a budget or a general ledger cost center, the supply chain has become a key point of differentiation for organizations. We saw this very clearly during the COVID crisis, when even the most essential goods were difficult to come by. Companies that had convergent, holistic visibility over their supply chains were able to maintain higher levels of efficiency and effectiveness. This, in turn, enabled a better customer experience.
- It’s also becoming an increasingly important aspect of all companies’ operations. Because of this, these organizations need a clear roadmap that outlines the education, experience, skill sets, and expertise someone needs to remain relevant. Then, companies have to make education and training accessible to those employees, knowing that at any given point they may be called upon to contribute in the C-suite or boardroom.
Rolling with the Changes
Driven by changing customer demands, the e-commerce boom, and the many missteps made ahead of and during the global pandemic, we expect the supply chain professional’s voice in the C-suite to only grow louder over the coming years.
Equipped with holistic views of the supply chain and real-time dashboards, this professional will be well equipped to steer the ship through the good times and the bad, all the while managing fluctuations, tackling adversity, and leveraging new opportunities. The end results will be a stronger supply chain, a more resilient organization, and much happier customers.