In an increasingly connected world, supply chain management (SCM) is no longer an arcane discipline confined to academia. Logistics experts tell us that the better you are at streamlining the supply chain process — from raw materials sourcing to manufacturing to finished goods delivery — the better your chances of differentiating your products from the competition’s, turning on the proverbial dime to respond to market changes, reducing costs while boosting customer satisfaction, and in our security-conscious era, protecting logistics processes and freight flows. In other words, SCM has entered the real world, and deploying it effectively can have profound and far-reaching effects on your organization. A robust supply chain is a strategic asset that plays exceptionally well in the boardroom.
Getting to that point, however, involves a considerable investment of time, resources, and leadership. In a thoughtful new book, Communicating the Value of Supply Chain Management to Your CEO (CSCMP, 2005), logistics professors Karl Manrodt, Brian Gibson, and Stephen Rutner discuss how to identify “trigger events” that spark change within an organization and can help draw top-level support for supply chain initiatives. Such occurrences fall into four categories:
- Compelling events
A compelling event can be a product failure, a labor dispute, a service disruption, or a regulatory change — anything that demands a significant change in the way you do business. When Whirlpool Corp. was plagued by excessive inventory, mediocre fill rates, and spotty service, its president/CEO authorized a strategy that transformed the firm’s supply chain from a liability into a competitive advantage.
- A strategic visionary
This is the Big Idea person, the one who brings about the Next Big Thing at the company. Authors Manrodt, Gibson, and Rutner cite the example of Limited Brands’ chief operating officer, who championed sweeping efforts to revamp the retailer’s supply chain to better integrate brand delivery and improve merchandise processing.
- Change agents
Often outsiders are brought in to support the visionary’s goals. Frequently dubbed “chief supply chain officers,” these people are charged with transforming multiple channels and ordering systems into a single, efficient system.
- Serendipity
Stuff happens, but sometimes it can lead you to breakthroughs in supply chain management. In the course of the authors’ research, the participants’ primary advice was to adopt the Boy Scout motto: “Be prepared.”