Almost all manufacturers are currently recovering from losses dealt them by COVID-19. Given the disruptions caused by the global pandemic, companies have been re-evaluating their approach to supply chain management, and the strongest ones have moved key supply chain executives into the C-suite in order to provide a longer-term strategic view on how to deal with supply chain disruptions.
Before the pandemic, business consultants advised companies to see the supply chain as pivotal to growth and critical to avoiding business disruption. And while many companies have embraced digital transformation to boost their efficiency and planning muscle, many have failed to leverage their chief supply chain officers to help reinvent the function and fuel growth.
In an Accenture report “Drive Your Own Disruption: Is your supply chain in sleep mode?” 900 supply chain executives reported seeing their function as either a cost-efficiency driver (60 percent) or a support function (68 percent), rather than as a competitive differentiator (48 percent) or a growth enabler (53 percent).
The study concluded that the keys to achieving growth lie in increased C-suite engagement with managing the supply chain function, along with agile and efficient adoption of technologies to enable a new way of working. The bottom line is that those organizations without a strategic C-suite supply chain leader could be leaving significant value on the table.
Shay Scott, executive director of the Global Supply Chain Institute at the University of Tennessee, says, “A decade ago, most supply chain leaders were focused on functional operational issues within their own areas of the supply chain, such as procurement, logistics, or manufacturing operations. The C-suite was several managerial levels removed, making direct communication rare. Cost-cutting was often seen as the major value that supply chain could provide to the business.”
In Scott’s view, the supply chain profession is transforming functions that were relegated to silos into an integrated amalgam, raising its prominence in the minds of corporate boards and catching the attention of investors and analysts.
Many supply chain officers are preparing for a place in the C-suite by expanding their strategic skills through post-graduate education. And business schools have taken notice of the trend. MBA admissions consulting firm Aringo reports that supply chain is one of the most popular specialization areas among the nation’s graduate business programs.
While the nation’s manufacturers, their suppliers and their customers recover from what all hope will be a once-in-a-century crisis, experts in finance, medicine and climate tell us that indicators point to preparation as critical for success. Crafting strategies for a resilient supply chain program should include a strategic C-suite supply chain officer, robust forecasting, scenario planning, contingency planning and building a strong supply chain management function.
The strongest companies that are successfully emerging from business disruptions caused by the pandemic have learned from it and are embracing needed changes. For many manufacturers who have weathered supply chain failures, that reinvention and focus on resilience may include creating a place in the C-suite for supply chain professionals.
Joe DiRocco is regional president of Fifth Third Bank, N.A. (Northern Ohio)