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C-Level for SCM?

Written by Ken Kinlock
Published on Thursday, 03 May 2012

Kinlock BoardRoomC-level is used to describe high-ranking executive titles within an organization. C, in this context, stands for Chief.  We have a CIO (Chief Information Officer), a CTO (Chief Technology Officer), a CMO (Chief Marketing Officer), a CFO (Chief Financial Officer),  a CCO (Chief Compliance Officer), a CFO (Chief Knowledge Officer), a CSO (Chief Security Officer) , a COO (Chief Operating Officer) and, of course, a CEO. What is the head of Supply Chain Management going to be called? More importantly, is SCM a "C-Level" or is SCM a "corporate utility"?

The "Chief Supply Chain Officer" (CSCO) needs to be involved in developing the business strategy rather than just somebody else’s strategy.

Maybe the COO is really the CSCO? That is a possibility too.

Recently I wrote about the qualifications of a supply chain manager. I really was addressing this to a SME business. To move this discussion to the C-Level, I reviewed some executive search companies and also some high-powered job hunters who have their own web sites. Shown below is a composite of possible qualifications for a C-Level Supply Chain executive :

General Manager/Operations & Supply Chain Executive with extensive global operations P&L experience in (fill in the blank: any "hot" industry), primarily with major Fortune 200 corporations. Skilled in managing profit centers and developing/implementing initiatives designed to improve and streamline manufacturing/supply chain and planning process to include business development, quality, customer service, product development, on-time and order-to-delivery cycles, using owned or contracted factories and third party OEM providers.

Key strengths include:
• Financial skill strength in both P&L and asset management
• High level knowledge of finance, global manufacturing/supply chain operations, corporate IT
• Re-engineering skills using Six-Sigma process, cost cutting & flexibility
• Strong global background & outstanding leadership skills and style

We took a look at various experts and their research:

  1. According to Supply Chain Management Review, nearly half the retail and manufacturing companies surveyed have a supply chain leader at or above the executive vice president level.
  2. 80% of supply chain heads now report directly to the CEO compared to 40% five years ago, according to Business Computing World. I would guess this implies that SCM is an actual organization. In many cases, SCM may be "Logistics", "Procurement", etc which are only elements of the Supply Chain.
  3. Companies are now more likely to have executive-level supply chain leaders, according to a recent Tompkins Supply Chain Consortium survey of leading retail and manufacturing companies. The executive briefing –  The Structure of Today’s Supply Chain Organizations,  based on the survey – notes that throughout the past five years, the organizational level of the senior-most supply chain executive has gradually moved higher.

Today, nearly half the retail and manufacturing companies surveyed have a supply chain leader at or above the executive vice president level. “With supply chains becoming more dynamic and agile, organizations need to able to keep up with the pace,” said Bruce Tompkins, Executive Director of the Consortium and author of the briefing. “And these companies are beginning to realize the significance of having a high-level supply chain executive influence their business strategies.”

While supply chain leaders are moving up through the ranks and the title of Chief Supply Chain Officer is growing in use, there are still some areas within companies that lack collaboration between these executives and other areas of the organization. For example, the survey reveals that some companies do not have any part of their supply chain organization responsible for setting inventory targets.

Likewise, more than a quarter of retail companies and 14 percent of manufacturing companies surveyed have no formal process for aligning supply chain goals. Manufacturing companies tend to achieve goal alignment by reporting to a single executive, and retail companies generally have their common supply chain goals established by senior leadership. “These gaps in goal alignment indicate significant opportunity for better communication and integration of supply chain functions,” Tompkins added. “However, companies are discovering these opportunities for improvement, and there is an increasing trend toward resource sharing across divisions and business units.

Other trends we see:

  1. The functions reporting through the more senior supply chain executives are growing over time as more become consolidated under one organization and one leader. Transportation, distribution center operations, network design and planning functions are now commonly the responsibility of a senior executive.
  2. Outsourcing supply chain functions is growing, particularly for execution functions such as distribution and transportation. Planning, provider selection, and customer-facing functions tend to remain with internal resources.

 

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