Mike Burkett’s presentation at last week Gartner’s Supply Chain Executive Conference covered the findings from two recently completed marketing studies.
There was a CEO and business executive study, and another focused on the Chief Supply Chain Officer (CSCO). The comparison of the two studies was really quite interesting. The good news is supply chains are directly tied to the number one CEO priority. The bad news? CEOs don’t know it (and perhaps some supply chain executives too). In short, the Gartner CEO study indicated that the top CEO priority is growth (no big surprise there), but subsequent questions around specific business enablers and risks would suggest that CEOs are more likely to view the supply chain as a risk to growth rather than a facilitator of it. Instead of seeing the power of supply chain to drive the top line, they see it as a potential barrier to top line targets.
There appears to be a general feeling that you need to effectively and efficiently manage the supply chain in order to avoid having it hinder your success, not for it to be a positive contributor. So, there is an obvious gap in understanding and a critical need to shape perception of the supply chain’s role and actual impact to the organization. That function sounds like the very definition of Marketing to me. Is that what the supply chain organization is missing ̶ someone to market the function to the office of the CEO and to the broader organization? Sure enough, supply chain leaders need to focus on doing more and better, but maybe a good first step is making sure everyone knows what they are doing now. Supply chain leaders need to put on their Marketing hat (do they have one in their arsenal of capabilities?) to INFORM, SOCIALIZE and INFLUENCE why and how supply chain is a capability required for growth. It’s about developing and delivering very clear messages of what the supply chain organization’s priorities are and how they directly support and align to the CEO’s priorities. There is a need for being more explicit in drawing the line from supply chain functions to corporate performance. “Mr. CEO, your priority is growth and profitability. Here are the supply chain initiatives that are aimed at helping the company to deliver on that…
- implement customer and product segmentation practices to ensure the right service level to the right customers, and identify how best to serve new and/or unique market segments
- integrate new product introduction planning and execution more tightly with the rest of Operations to ensure smooth transitions that not only minimize supply risks and costs, but are equally focused on maximizing the product revenue and market share opportunity
- implement supply chain technology to extend capabilities that can in turn, enable market and service differentiation
- shorten customer response times for order commitments and excel on on-time delivery to improve customer service/experience, minimize lost business, and maximize new business opportunities
With each initiative, supply chain leaders need to show the links to performance metrics and the tradeoffs between cost and service, so the discussion is about maximizing value for the organization and not about optimizing supply chain efficiency. The goal is to demonstrate how the supply chain can pull different levers to influence progress. Ultimately, it's about providing more information than may be asked for, because it is very likely that you are doing more than what is being perceived. And it’s not only about marketing to the CEO, but also to other functions to promote the cross functional opportunity. Supply chain executives should be more proactive in defining and influencing what constitutes the ‘supply chain function’ with the goal of being more inclusive, and bringing more groups into the planning and decision making collective. Take the NPI example above, the Gartner CSCO study showed that new product introduction is only 42% likely to be in the “supply chain span of control”. How is that the case? What’s the benefit of that function being actively brought into the fold? What if the supply chain leader actively marketed the opportunity for expanding the boundaries and made the case for business value driven initiatives? Take the recent Gartner Chief Supply Chain Officer Study – Respondents with a supply chain center of excellence (which, at a high level, you can argue translates to a deeper supply chain commitment and span of control/influence) showed on average 16% higher revenue and 17% higher margin. What would the CEO say to that? And like any good marketing, the education and influence should go both ways. Supply chain leaders should make concerted effort to engage the different constituents on how to serve their needs better (e.g. Survey the Sales, Finance, Development groups, and follow it up with a supply chain initiative/innovation roadmap that outlines value/impact to each). Consider some of the by-products of upping the ante on marketing the supply chain:
- By default, it will build a more collaborative, cooperative and inclusive culture
- It will raise the profile and the appeal of the function which may draw new talent
- It fosters added credibility for the function which may incite further investment dollars
In my opinion, I think it’s high time for a little self-promotion. Supply chain leaders should do so unabashedly, because in the end, it’s about driving better business performance. You are the CEO’s best friend….he just might not know it yet.