Updated: Oct 17
Supply chain functions such as purchasing and warehousing originated as administrative and support functions and unfortunately remain so in many organizations. As organizations evolve, the supply chain function has started to establish itself as a core function and strategic differentiator. A primary aim of this blog is to showcase that supply chain management can make a significant impact from both a profitability and risk management perspective.
Some CEOs of the world’s largest companies with supply chain backgrounds reflect the recognition of SCM’s importance. Notable examples are Alan George Lafley of Procter & Gamble, Doug McMillon of Walmart, Mary Barra of General Motors, and Tim Cook of Apple. In a Bloomberg interview, Warren Buffett (arguably the greatest investor ever) who uses management talent as one of his main investment decision factors once said that Tim Cook “understands the world to a degree that very, very few CEOs I’ve met over that past 60 years could match”. While he is only one person and we can’t extrapolate this to every supply chain professional, the case I have made previously in this blog is that supply chain people are at the intersection of many functions and businesses. If you have been effective in this role, you should have an advantage in providing strategic insight and leadership for your organization.
Now that I’ve argued that SCM can have a prominent seat at the executive table. Here are my suggestions to think more strategically:
Think outside of the function – having a broad understanding of all functions will enable you to communicate across functions and understand any interactions (sometimes trade-offs) between them. Aligning operations and finding synergies are keys to adding value to an organization. Increasing knowledge in finance is particularly important, as it is traditionally the language of business. Explaining your position in dollars and cents will make it much more compelling.
Think outside of the organization – considering suppliers and customers throughout the supply chain will reveal problems and opportunities that you might not have been aware of. Also, you may want to consider other industries. Companies in other industries and/or other countries may do things that can be applied effectively to your situation or at least inspire innovative solutions. Challenge yourself to be the best not only in your industry but anywhere.
Keep up with macro trends – ESG (Environment, Social, and Corporate Governance) initiatives are transforming business drivers like never before. Many also believe we are on the verge of societal change due to technological developments. An organization that does not proactively engage with these changes will not survive.
Whether you are deciding to enter a supply chain career or are already in a supply chain career, I encourage you to be an advocate for this function and wish you success in your own career goals.