SCDigest editorial staff

The News: The Gap forces its Chief Supply Chain Officer (CSCO) to step down, and re-splits the sourcing and logistics functions within the company.

The Impact: The move seems to go against the slowly developing trend of fully integrated supply chain organizations.

Supply Chain Digest topics: retail supply chain, supply chain organization

The Story: Specialty apparel retailer Gap Inc. announced last week that it is going to split its formerly integrated supply chain leadership into a sourcing and logistics function.

The move comes as the company announced the departure of executive VP and Chief Supply Chain Officer Nick Cullen, 50, effective immediately.

Rather than maintain the integrated supply chain organization managed by Cullen, the company announced that it would not replace the CSCO position. Instead, the company will be separating the sourcing and logistics functions “to better align the global sourcing team with the brands, and logistics with inventory planning and distribution,” according to a press release.

Leading the sourcing operation will be Stan Raggio, a former Gap Inc. supply chain executive (1991 to 2002) who had been in retirement, and now returns as the senior VP of sourcing and vendor development. In that role, he will report directly to Paul Pressler, GAP CEO.

Senior vice president of logistics Colin Funnell will continue to be in charge of The GAP’s logistics division. This group formerly reported to the departing Cullen, and will now report to GAP CFO Byron Pollitt.

The move comes amid overall disappointing sales results for Gap Inc., parent to stores including The Gap, Banana Republic, and Old Navy.

Do Integrated Supply Chain Organizations Make Less Sense in Retail?

As noted above, the split of the supply chain function at The Gap is somewhat at odds of the growing integration of the supply chain function and the role of Chief Supply Chain Officer. However, it could be that in retail it is less beneficial to integrate across sourcing and logistics than in other sectors.

“The sourcing function in retail really is an adjunct of the buying and merchandising functions,” one consultant, who asked to remain anonymous, told Supply Chain Digest. “In manufacturing, sourcing is feeding the production process, so total integration can make sense, but the argument is less clear for retailers.”

Do integrated sourcing and logistics functions make sense in retail or not? Why? Was Let us know your thoughts.