Does Supply Chain Belong at the C-Level?

150903-KOM-forbesThe presence of a Chief Supply Chain Officer indicates a certain amount of intelligence around the boardroom.  Unlike sales which has a clear mission to make revenue numbers or finance whose function is obviously tied to return on invested capital, or even R&D who owes product innovation above all else supply chain leaders face a tangle of conflicting priorities.

Cost is king, but so is service.  For business-oriented supply chain executives subtleties around when and where costs hit and how customers are affected is too often lost on everyone else.  For this reason alone supply chain definitely belongs at the C-Level.

Cutting off your nose to spite your face

I spoke recently to a top supply chain executive whose new CFO is getting ready to gut the centralized organisation now in place.  The procurement savings already booked by this organisation are threefold the cost of running the group and its best-in-class handling of risk upstream in the supply base provides vital insurance against brand damage that could destroy billions in shareholder value almost overnight.  To my mind this new CFO is solid proof that understanding when and where costs hit takes a lot more than a spreadsheet.

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