Why Organizations Need A Chief Supply Chain Officer, Despite Key Challenges
By Steve Dowse, Blume Global
What is the most frequently prioritized function for future digital investment among C-level executives? According to the Deloitte Industry 4.0 Investment Survey 2018, 62% of respondents said it is the supply chain; it ranks ahead of product design, marketing and sales. This is not surprising, considering the supply chain impacts the entire organization — from product design to final delivery to the end user.
With this in mind, it makes sense that the retailer Adidas plans to implement large-scale supply chain digitization to take advantage of real-time supply chain data as it struggles with supply chain shortages. The goal is to better execute a demand plan based on a reliable forecast.
Despite the importance of supply chain operations to a business’s bottom line, supply chain professionals do not always have the executive-level support necessary to improve overall performance. In fact, only 22% of the respondents noted that Chief Supply Chain Officers (CSCO) are highly involved in determining the digital strategy, or serve as key decision makers in digital technology investments. Although the role of CSCO is still a relatively new one within the C-suite, it needs to become a strategic leadership role for organizations worldwide — and fast.
Supply chains are central to how a company does business and the experience it delivers to customers. This validates the call for the CSCO to have a leadership role within organizations. Fortunately, more and more retailers recognize the importance of this position and have created a CSCO position to support their global supply chain and logistics network. This includes retailers such as Macy’s, Target, PVH and Blue Apron.
Even though CSCOs are becoming more visible and beginning to have a voice at the executive table, they still face challenges to improve efficiencies, reduce costs, increase revenue growth and deliver better customer service and experiences. CSCOs that overcome those challenges will help their companies better meet their customers’ needs.
The Need For Real-Time Visibility
Siloed parts of the supply chain, especially in the first- and last-mile freight segments, are particularly disruptive to a CSCO’s business operations. For example, to travel from a port to a distribution center, trucks must be available for immediate pickup and avoid any unexpected traffic to the rail ramp. If not, these ground transportation delays can result in high accessorial charges that quickly add up.
With widespread shortages in warehouse space, containers, chassis, trailers, trucks, truckers, material handlers and more, CSCOs need to have the ability to convert every single container into a warehouse and redirect containers as needed in real time. Utilizing in-transit, real-time and end-to-end visibility, CSCOs can track their inventories at SKU levels and make precise, informed decisions — ultimately boosting the efficiency of their supply chains and reducing costs.
Better Data Drives A Better Performance
CSCOs must reinvent their logistics and fulfillment operations to meet and exceed ever-growing customers’ expectations in an Amazon-driven retail landscape. If retailers don’t meet customers’ demands, customers will switch to another retailer for their purchases — and may never come back. CSCOs need a data-driven platform that allows them to forecast and respond to demand in real time — turning a reactive approach to supply chain visibility into a proactive one.
Identifying potential problems — such as competitors’ promotions and big in-stock seasonality needs — before they occur with predictive analytics, CSCOs can better understand the elasticity of demand for their products and respond accordingly.
From A Cost Center To A Revenue Generator
Organizations need to no longer see their supply chain as a cost center, where CSCOs only help their organizations minimize costs, lower distribution center inventory and quickly ship in bulk. Supply chains must become key business enablers that increase speed to market and drive revenue growth.
Automation and acceleration of repetitive, manual tasks, including financial settlement, allows CSCOs and their teams to focus on more strategic, high-value work. With an automated and adaptive supply chain, teams can put their focus on improving speed and service across multiple channels with smaller, more frequent replenishment cycles — to accommodate shorter product lifecycles.
The CSCO is an important part of the executive management team for retailers. They must bring efficiencies and cost savings into the fabric of their supply chains; increase revenue growth through better agility in their supply chain networks — from visibility to orchestration to settlement — and empower their supply chain teams to focus on high-value work that transforms customer experiences. The end result: enhanced operational and employee efficiency and happier customers.
Steve Dowse, Senior Vice President for Project Management for Blume Global, has over 30 years of IT experience within global transportation and logistics. He is responsible for product management for Blume Global, a leader in global logistics and digital supply chain solutions.