I was reading an interesting article a while back in Bloomberg Business Week by Victoria Taylor titled Supply Chain Management: The Next Big Thing? The article highlighted the emerging trend by undergraduates in seeking supply chain management studies, and colleges and universities are responding in kind by increasing the variety of courses relating to various aspects of supply chain management. It pointed out that this trend was being fueled by the demand for qualified professionals to manage the complexities of today’s globally integrated supply chains.
Taylor, while highlighting the growing importance of supply chain management positions in global companies, noted the creation of new C-Level Supply Chain positions in these same companies. However, she quoted William Verdini, an associate professor and chairman of the Supply Chain Management Dept. at Arizona State University’s Carey School of Business, who pointed out that, “Many of the current supply chain managers are transplants from other parts of their companies, with no formal schooling in the discipline.”
So what are the potential risks of filling these roles with managers from other parts of the business?
To understand the potential risks, one must understand the key ingredients which make C-Level Supply Chain Executives successful. A good white-paper written by William V. Fello and Peter Everaert for Korn/Ferry International, “The New Supply Chain Executive: Using the Integrated Supply Chain as a Competitive Weapon” lists five ingredients:
1) A seat at the strategic decision-making table
2) Cross-functional expertise and relationships
3) Strong customer and supplier relationships
4) A global mindset
5) Demonstrated success as a change-agent
When you examine the list, two items stand out as the greatest potential risks: Cross-functional expertise and relationships and strong customer and supplier relationships. The reason is that it would be extremely difficult for someone who hasn’t spent significant time managing the supply chain to have a deep understanding of the supply chain processes and the internal motivations and politics of various customers and suppliers alike. The risk would be a supply chain strategy that lacked cohesion, recognized critical challenges, and lacked the commitment of sufficient resources. Often this results in a supply chain strategy that is nothing more than a disparate list of key initiatives.
So what are the potential rewards of filling these roles with managers from other parts of the business?
Back to the previous five ingredients, the very last one, demonstrated success as a change-agent combined the first ingredient, a seat at the strategic decision-making table can bring in a fresh approach and, with it, the commitment to see that approach to completion. Typically change-agents are self-described students. They study the problem, they take input, the examine alternatives, they weigh consequences, and then they create a vision. The vision is simple but it focuses the efforts of the team and prioritizes the commitment of resources. When you combine this with executive support, positive change is almost always the result.
An excellent example of a change-agent coming from another business (though not a C-Level supply chain one) is Steve Jobs when he took over The Graphics Group which later became known as Pixar. His initial intent was for it to become a high-end graphics hardware company. Not that much of a stretch for a hardware guy. However, here was a smart, creative, driven technology change-agent who pointed his company in a new direction. What he needed to know, he learned. What he didn’t need to know, he appreciated the complexity and how it impacted his success. The people talent he needed, he found. If something didn’t work, he understood why and then went in a different direction. He established a vision and then changed the computer animation world forever. He was a change-agent who was also the head of the dtrategic decision-making table.
My own entry into supply chain management is another example of taking a job without being grounded in the fundamental concepts. My formal schooling was in Engineering Physics and, after serving four years as an Army Officer, my first civilian job was two years of hands-on manufacturing management experience. At the time, I felt more than prepared for a new challenge when my Plant Operations manager asked me to take the newly created Inventory Control manager position. The reality, however, was that I didn’t have a clue as to what I was doing or what I was getting myself into. Even worse, I was trying to establish inventory control in a factory that didn’t understand the meaning of the word ‘control.’ Fortunately for me, my boss had confidence in me and gave me time to learn and fill the void. What followed were countless hours of APICs training, materials management conferences, reading books on materials and supply chain management, trial and error in the real world, and, most importantly, understanding the fundamentals of the processes and how ingredients are needed to effect change.
Fortunately for me and my boss, his gamble paid off. I had dramatically transformed the way that inventory was managed in that factory and in-turn dramatically stabilized the ability to plan production due to the accuracy of the inventory. Assigning me the position was a risk, but from his perspective, small and manageable since the factory was going from nothing to something. Fifteen years later, that very same company and plant, could ill afford to have someone so under-qualified in such a key role without jeopardizing their ability to consistently produce and meet financial expectations. A young smart guy with a lot of passion is no substitute for a highly qualified practitioner of supply chain management.
In my nearly 20 years in the industry, I have met a few supply chain managers that have not made the same investment in educating themselves. Sadly, some do just enough to survive and become masters at managing up. They feel they can ‘task manage’, conference call, and brow beat their way through the problem without educating themselves in the fundamental concepts, the process intricacies, and the drivers of risk in their supply chain. They focus on the near term and rarely make investments for the long run. At best, they will be able to continue to steer the ship in the same direction. At worst, they will not be able to course-correct and the ship will run aground. More often than not, they tend to blame the crew and the ship itself.
Personally, I welcome more formally educated practitioners into the profession. My hope is that upon a strong formal educational, with time and additional experiences in the trenches, they will have the foundation needed to be in the next generation of C-Level supply chain positions. They will focus on substance and see through the smoke and mirrors. They will lead and innovate instead of turning the same levers and expecting a different result.