Change has to come from the top

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How capable are we of transforming our supply chains? Confidence may be growing in terms of a recovering economy and expectations of increased demand; however, findings from two recent high level surveys suggest that this optimism is tempered by a lack of capability to meet demand and, significantly, an inability to bring supply chain strategy implementations in on-time and on-budget.

Consultancy PRTM’s Global Supply Chain Trends 2010–2012 survey of 350 executives worldwide, highlighted volatility and a lack of visibility to current market demand as key issues affecting the supply chain. PRTM warn of a lack of the ‘capabilities critical for meeting growing demand or for managing an increasingly complex and global supply chain.’ The report emphasises that the ‘main challenge for many companies is not to redefine their organisation models, but to transition and manage the organisational change.’ This is a major issue. A further survey indicates that organisations are not that good at implementing such changes.

A survey of over 180 senior global supply chain professionals, undertaken by Cranfield School of Management and Solving Efeso, uncovered that only two per cent of respondents confirmed that their supply chain strategy implementations ran smoothly, on-time and on-budget. According to Alan Waller, Cranfield visiting professor and vice president of supply chain innovation at Solving Efesco, ‘The three main causes of implementation failure were: company culture, lack of leadership and poor supply chain visibility.’ Interestingly, he pointed out that the barriers to strategic success were predominantly people-related, rather than due to technical barriers.

So, given the rising importance of the supply chain function in attaining corporate goals around better customer service, how do we better understand the people related barriers to faster and more efficient strategy implementations?

Professor Richard Wilding of Cranfield says, ‘Supply chain strategies should not be developed by individuals in isolation. Other departments such as Marketing, IT and Finance need to be held accountable, rather than just consulted, in the development and delivery of a firm’s supply chain strategy.’ But getting different departments aligned to a cross silo strategy is no easy matter. Surely, it can only be driven by board level executive action? If companies are to respond quickly to changes in demand, and are to align their processes accordingly, chief operating officers are going to have to lead the way in bringing about change.

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