|Some CEOs, as we have stated, pay little attention to SCM as a strategic concern and, thereby, squander its potential to improve overall business performance.
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Dan Gilmore and I reported on a few of the CSCMP presentations that we were able to attend - there were others that had high levels of attendance and very positive comments. One of these – “Are you the Weakest Link in your Supply Chain?” – is worthy of special mention, as it is consistent with the messages we have been conveying in SCDigest about C-level understanding and involvement in supply chain management.
This presentation – by Reuben Slone, EVP of Supply Chain at OfficeMax - was based on an article of this title appearing in the September Harvard Business Review, co-authored by Reuben, Tom Mentzer, and Paul Dittman of the University of Tennessee. We recommend that SCDigest readers review this excellent article. Rueben was featured last year in that publication when he was with Whirlpool, and led their successful supply chain transformation.
The presentation, as does the article, addressed the importance of gaining CEO involvement in SCM, and points out the issues and challenges when he/she is not. Some CEOs, as we have stated, pay little attention to SCM as a strategic concern and, thereby, squander its potential to improve overall business performance. Reuben makes the case that direct CEO involvement, particularly in companies that compete in supply-chain intensive industries (actually, are there any that are not?), is a necessary leadership factor today.
Reuben uses real life anecdotes to make his points. Several un-named companies are used that provide anecdotal examples of CEO failures, as well as successes, in leading and engaging in SCM.
The presentation provided not only reasons why the CEO should be engaged in SCM; it also included a self-assessment of SCM leadership, consisting of 7 questions with relative scores of 1-9. Low scores on any of the 7 items will indicate possible jeopardy for the company; while a higher score might well indicate a world-class opportunity to leverage. Overall, total scores can indicate potential competitive advantage, or, sadly, potential damages to the company’s interests.
The 7 items, paraphrased are:
- Is SC leadership a valued career path in your company?
- Do you have a program of customer-focused metrics and best practice benchmarks?
- Do employees and customers show behavior that reflects your SC strategies?
- Do you understand important SC technologies?
- Do you play a constructive role in resolving cross-process disjunctions?
- Do you demand that SC expertise be factored into business strategies, initiatives, plans, etc?
- Do you ensure that short-term thinking does not sabotage SCM opportunities?
There are sound criteria within each question for scoring.
Getting your CEO to do this self-assessment may be challenging, but it will be well worth it. Some years ago, for example, I led Procter & Gamble executives through this type of exercise, and we all know how far they have progressed in SC excellence, and, their CEO has SCM on his executive agenda.
The presentation concluded with suggested actions if the self-assessment scoring ends up low. These include: getting personally involved in cross-functional issues such as S&OP, and the management of working capital; reward supply chain behavior that benefits the entire company; invest time in learning about recent advances, including new technologies; and make use of benchmarking and get outside advice.
These actions, and others, are what we advise executives as well. Step one is to understand why, and where, the CEO and his/her executive team are either engaged well or not – this presentation does an excellent discussion of that assessment. Step two is to do something about it.
It is very heartening to see this CSCMP presentation was standing room only. As I pointed out in my recent column on CEO understanding, there is increased awareness of the value of C-level leadership to SC excellence. We need more ways for SC managers to convey this to the senior executive team. Thanks to Reuben and others for working on this.
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