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Do We Need A Supply Chain VP/Director Or Just A Supply Chain Manager?
With the growth in scope of Supply Chain Management (and possibly a new Supply Chain Control Tower), we need to re-evaluate if the leader of SCM should be a “manager”; (as is the case in many companies today); or should the position be a director or vice-president.
Recently, the LinkedIn SCM Professionals held a group discussion on “What is the difference between a SCM Manager , director or VP ???? Just fancy names or what?” I summarized this very exciting discussion. The best comment came from member RANJIT SARKAR : SCM Manager is a person sailing a boat in the river with all the ups and downs, Director or VP is a person sitting on the bank of river shouting and instructing to the sailors.
A general consensus of this discussion was that SCM manager's focus is on the tactical side of the day to day operations with about 90% of his/her time spent on purchasing-warehousing-inventory management-planning and scheduling issues and all the daily issues that arise from those areas.
The Director spends about 65% of his/her time on those same issues but 35% is spent on looking at numbers and the analysis of the numbers pertaining to PPV, inventory dollars, supplier spend, forecast to plan accuracy and shipments and monthly numbers.
The VP spends about 10-15% of his/her time on the tactical issues which is really done through meetings about the issues with their staff and may sit in on some major issues with suppliers be it in logistics, purchasing, or manufacturing issues but the other 85-90% of his time is spent on strategic issues. Why the numbers are not where they need to be? How to improve on the numbers? Budgeting for the next year and three years out, capital expenditures, market forecasts, staffing overall, new product development, cultural issues within the organization, and potential M & A's or consolidations of existing facilities.
A while back I wrote about 5 Must-Haves to Qualify as a Supply Chain Manager. This was more at the tactical level. Recently I wrote about the qualifications of a supply chain manager. I moved the position to the C-Level and 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.
Things are changing in the supply chain. SCM is getting bigger. First of all, let's list the possible elements in the supply chain you will manage: logistics (transportation, warehousing, at least); procurement; supply chain management systems (procurement, production, fulfillment and distribution processes, including EDI); CRM; ERP.
SCM becoming the “power house of the business”
It is the traditional role versus expanded role: VP or Director may also have responsibility of operating as a “Community Supply Chain” manager. This means exerting control over suppliers. 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.
The SCM Control Tower and need to pick the team carefully
We recently wrote an article on Supply Chain Control Towers. Now, who is going to staff the control tower? Logistics was conceived by the military to get the right amount of supplies to the troops at the right time. Supply chain management takes a bigger approach of looking further back into the life of a product to its manufacture and even product design while integrating what were once thought to be unrelated disciplines: marketing and customer service. Read more about who is going to staff the Supply Chain Control Tower. Looking ahead, where does the manager of the “SCM Control Tower” fit in? Is this the today's SCM manager?
Returning to more of the discussions on “Can a VP's job can be done by the same person....? “
In my opinion the answer is no they cannot be done by the same person and be successful. I realize defining successful is open to interpretation but I believe we all understand what is meant by that. The problem with wearing both hats is that in order to be a VP you have to be able to be autonomous from the tactical day to day and the higher level issues that may also come up at the same time. You cannot be sitting off site in a Senior executive meeting discussing M & A's, consolidation of facilities, high level budgets and the direction of the organization while you are getting emails about parts shortages, production problems, supplier shut downs, or customers calling about late orders, missed shipments, or major quality issues.
SCM Solutions can be operations solutions, strategic solutions or tactical solutions. Now a manager may focus on operational solutions but VP and Director both have to think about strategic and tactical solutions.
I believe it depends on the specific company, it's objectives and it's organization structure. There is no single description that encompasses all industries or companies. Titles aside the higher-up the ladder the less time that is spent on tactics and the more time that is spent on research, development and strategy. That said, every vice president had better be looking at the operational KPI's regularly to be sure that the tactics now employed are support the prevailing strategy.
My conclusion: VP or Director with broad experience is required for today's supply chain, PLUS experienced tactical managers in each functional area.