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Supply Chain Expertise is Expanding
A recent article in the Wall Street Journal says that “Supply chain management as a proving ground for senior leadership roles, including CEO, is increasingly evident, with high profile examples that include Apple Inc. CEO Tim Cook and Intel Corp. CEO Brian Krzanich. One reason for this phenomenon is that supply chain leaders typically have integrated experience across very different and key functions in purchasing, manufacturing, engineering, strategy and logistics and often oversee new product launches and customer service. This unique set of functional skills is increasingly important to corporate competitiveness.”
It didn't use to be that way in my earlier business career. Traditional path to the top varied. Finance was a great path (Reg Jones at General Electric). An engineer, Alfred P.Sloan, was a famous CEO at General Motors. Probably the best known CEO with a manufacturing background was Henry Ford. Lots of marketing / sales folks became CEO, such as Dave Whitwam at Whirlpool. Sometimes even lawyers rose to CEO, like Bob Wright at NBC.
But the way we do business has had a revolution in the last few years and the outcome of this revolution is called “Supply Chain Management”. It means partnership with traditional business units in lieu of the old “service provider” approach. Amazon, as an example, has their “competitive advantage” because of integrated supply chain operations. It is all about eliminating silos and creating a real supply chain. Important to this is Enterprise Resource Planning (ERP), supply chain planning, warehouse management and transportation systems.
Yes, it is not perfect yet: still have too much inventory in the wrong places, no data to make timely decisions and still too much looking at history instead of future. Now risk management has jumped onto the SCM plate. Lots of initiatives and ideas. To accomplish this, SCM needs a special breed of trained individuals. Before this “revolution”, there were specialists in transportation, warehousing, planning, procurement, electronic commerce. They were all buried in existing silos. They needed more diverse skills, exposure to the company’s end to end functions, knowledge of how other companies run their supply chains and understanding the use of data and analytics to improve operations.
I'm going to “plant a stake in the ground” and call 2006 the “boiling point” with the SCM profession. The Supply Chain Management Review published an article called The Emerging Supply Chain Management Profession . They talked about how over the past several years, the visibility of supply chain management as a collection of diverse, critical skills has increased substantially and how Supply chain management (SCM) has evolved from a loose affiliation among functions (purchasing, manufacturing, logistics and others—to an integrated and cross-functional discipline. An increasing number of educational institutions are offering supply chain management degrees.
When it comes to career progression and human resource management, however, many firms continue to focus on individual functions. Continued progress requires a more broadly accepted definition of SCM and a definition of the requisite experiences needed to achieve professional status in this business discipline. With the help of IBM, (The Supply chain of the Future) they described the “model” skills and experiences required to become a SCM professional.
At a senior level, a SCM professional evaluates the trade-offs between supply chain functions and organizations. In addition to identifying the trade-offs, the supply chain manager must be capable of developing and implementing integrated and comprehensive supply chain solutions.
After reviewing lots of literature, we believe that a true SCM professional must have skills and capabilities in the following five areas: functional (hands-on operational and managerial work); technical (experience in applying information technology (IT) effectively); leadership (able to lead projects involving customers, partners, and/or competitors while effectively interacting with both internal and external executives); global management (global planning and operations experience), plus experience and credibility.
Supply Chain Management is the route to integrate all this talent which includes: engineering degrees, MBAs, high computer skills, etc. And with all this talent concentrated in Supply Chain Management, we should expect that CEO's of the future will emerge from SCM! Last modified on Tuesday, 08 April 2014