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There has been a growing body of work lately at conferences and other venues on driving better focus, resources and respect for supply chain management and logistics within the executive suite.

Much of this thinking, as we’ve reported on repeatedly in SCDigest, as been related to encouraging SCM professionals to learn to better speak the language of business, and to align supply chain strategies more closely with overall business strategies and those of the brands/business units.

Recent research by Brian Gibson, Stephen Rutner and Karl Manrodt on the behalf of the Council of Supply Chain Management Professionals has added to this body of knowledge. Their focus was in better understanding CEO perspectives of SCM, based on one-on-one interviews with a number of CEOs and supply chain executives. The research found that for many CEOs, attention is not focused on the supply chain until something breaks.

“In many organizations,” they write, “e xecutives are blissfully unaware of SCM as long as the supply chain is running smoothly. As one supply chain executive put it, “No one cares about supply chain management until there is a problem.””

The good news, however, is that based on the research they did categorize four types of “trigger events” that led to greater CEO attention on supply chain, with corresponding clout and investment within the organization. These four types of trigger events are as follows:

• Occurrence of a Compelling Event : Some dramatic supply chain disruption or business performance failure that creates an immediate sense of urgency. At Whirlpool in the late 1990’s, for example, business success was being imperiled by poor supply chain performance, from high inventories to low customer service. It reached a new crisis point, causing the COO to drive a top to bottom improvement program.
• Emergence of a Strategic Visionary : A CEO or other high ranking executive emerges who simply “gets’ the power of SCM excellence to drive competitive advantage and financial success. The researchers cite the example of an apparel industry CEO who saw the opportunity to use SCM/Logistics to serve as a key building block of meeting demanding customer requirements and lowering total operating costs by sophisticated management of a global supply base. The company reached its 5-year revenue growth plan in only two years as a result.
• Introduction of Change Agents : The CEO delegates to a new leader, with broad authority, the power to transform a supply chain organization. Usually, though not always, this change agent is someone brought in from outside the company. As the researchers note, “Often, an individual with broad supply chain experience from outside of the organization is sought for this role. Such individuals are highly desired because of their ability to bring a fresh perspective to the current situation, to ask critical questions, and to make an objective case for supply chain transformation in both financial and operational terms. In addition, these “outsiders” are unlikely to be tied to long-standing processes, personal relationships, and other barriers to change.”

But this isn’t always the case, as in the example of Whirlpool cited above, which found an internal candidate for the new position of global head of supply chain operations, with a broad charter to make transformational change. The researchers note this type of change agent frequently in turn then creates greater awareness and appreciation of SCM in the office of the CEO.

• Encounters of Serendipity: Let’s call this sort of “The Accidental SCM Advocate.” The CEO might suddenly get SCM fever from a chance article or conversation with a peer (we’re thinking of the parallel of ex-GE CEO Jack Welch getting Six Sigma religion from his conversations with former employee Larry Bossidy, then CEO or Allied Signal).

The researchers write: “Whatever the reason for the senior executive’s “discovery,” supply chain professionals within the organization must leverage the situation into something highly positive. As is the case with compelling events, supply chain managers must put themselves in a firm position to seize such opportunities, address problems decisively, and showcase the capabilities of the supply chain to the top executives and the organization overall.”

These trigger events can happen together, either in parallel, or sequentially. The obvious example would be a compelling event, strategic visionary CEO, or serendipity leading to the appointment of a “change agent” to lead the transformation.

While these events are at one level outside the supply chain manager’s control, the authors urge SCM professionals to “be prepared.” How?

• Develop an understanding of the wider organizational picture. Rather than become totally immersed in supply chain matters, strive to appreciate the challenges that C-level executives face, corporate strategies and goals, opportunities that should be exploited, and trouble spots that must be resolved.
• Conduct a self-assessment of supply chain strengths and limitations. Develop a realistic picture of existing capabilities to know what types of trigger events the current staff and processes can—and cannot—effectively solve. This will prevent the problem of making promises that can’t be delivered on.
• Build key relationships within the organization and across the supply chain. Strive to understand the needs of key constituencies and make them aware of the capabilities of the supply chain organization. This cooperative approach will increase the likelihood that supply chain professionals are kept in the loop when strategic plans are being made or special challenges emerge.