Most of us who work in supply chain end up here by accident. A quick straw poll of the panellists at our round table (see panel) revealed that only one or two came into the industry with their eyes open, as it were.
Things are changing as logistics and the supply chain become more attractive subjects for study but meanwhile supply chain experts must think about how to encourage immediate colleagues and other people in the organisation to ‘think supply chain’.
A good place to start is to look at supply chain competencies and how to measure them. Xavier de Montgros said that as far as HP is concerned, these competencies cover a wide spectrum – areas such as procurement, logistics and many others. Paul Reilly highlighted the emergence of ‘the supply chain company’ in which the supply chain has taken on a customer-facing function. Graham Ewer and Jeremy Bentham both mentioned the increasing use of the Scor model and Accenture’s online Supply Chain Academy, which could provide a useful framework for determining what skills people already possess and areas they need to work on.
Interestingly, both Bentham and Ewer noted that enthusiasm for training opportunities tends to be much higher among management personnel outside western Europe. Do people in the EU already know it all – or do they just think they do?
It’s a matter of attitude
‘Perhaps one of the most important attributes of a successful supply chain professional is having the right attitude,’ added Richard Downes, ‘We take skills as a given but without the right attitude we know people won’t be successful.’
‘Is it important to educate people in cultural issues in multinational organisations?’ asked Nick Allen. HP does just this, responded de Montgros, ‘and with at least one English university making Cantonese a compulsory first year subject, Asia is a subject that isn’t going to go away’.
Niek Visarius highlighted the problems of smaller firms and Graham Ewer agreed that the quality of skills in this sector is highly variable.
The degree of influence the supply chain could or should have on a company’s board of directors was widely discussed at the meeting. As Reilly pointed out, a lot of boards don’t have much experience of supply chain issues, but recently such knowledge has begun to get through. This is probably a reflection of how new the supply chain is as a discipline. The novelty of the concept might also explain the lack of females involved, although some are now beginning to filter through middle management level. ‘But when board level sales and marketing people are instructed in the importance of the supply chain, it really makes a difference,’ said Hanna Summanen.
The importance of supply chain thinking
Maybe more important than seeking a board figurehead is ensuring that supply chain thinking permeates the entire board, added Reilly. And those businesses that see the value of the supply chain, not just the cost, are the ones most likely to draw such thinking into the main board level, added Ewer.
Ewer said that the one place where logistics is fully integrated at the highest level is in the military. Ewer completed a career in the Army and his last appointment, in the rank of major-general, was as assistant chief of defence staff – logistics. The military has always seen the value of logistics. Indeed, it is military plannng that spawned modern supply chain thinking in the business world.
HP has a global operations director on its board, pointed out de Montgros, adding, ‘It’s important that awareness of the supply chain is embedded in each business.’
Given its cross-enterprise nature, it is vital the supply chain does not end up in a ghetto of its own making. Perhaps one of the biggest problems in developing management skills is getting people to break out of the comfortable boxes and silos they hold dear.
‘Many people feel comfortable in their boxes – the challenge is getting them to understand the broader context,’ said Ewer.
In fact, pointed out James Hunt, one of the supply chain expert’s most important roles is to act almost as an internal consultant, helping to bring the parts of an organisation together. There is a limit to how much cost can be taken out of an organisation at the individual silo level. For real savings to be made, it is vital to take a more holistic approach, pointed out Downes.
It is doubly important to break out of silos and departments when an organisation spans different countries or cultures. One of the most important attributes a supply chain specialist can have is the ability to cope with ambiguity, suggested Reilly. ‘To understand that the situation in one place is different from that in another, recognise that one size doesn’t fit all,’ he said. And de Montgros agreed, saying the way things run in China is completely different to the way they run in Mexico.
It can be difficult to pin down lines of command and indeed, what the supply chain is all about, said Bentham. ‘Who does the chief executive shout at when something goes wrong? We are moving in the right direction but at the moment it’s a hybrid – a bit of a dilemma.’
Summanen posed an interesting question – as an individual, how do you market the idea of the supply chain to the rest of the organisation? One way is to expose your supply chain people to other groups in the business, suggested Visarius. It should be somebody’s job to explain its importance. An oft-neglected area of personal development in most organisations is middle level supervisors, and it is important to train these people how to deal with multifunctional teams, he suggested.
Selling the concept
Bentham added that it is vital to sell and market the concept of the supply chain effectively within an organisation. ‘I’ve seen a lot of good ideas fail because of poor presentation.’
‘Is there a place for innovators – mavericks, even – in the supply chain?’ asked Allen. The round table consensus was that you ought to have some – but probably not too many. Reilly went on to say that one important attribute he had found in his small team was good listening skills. ‘The last thing you want is someone to come in and impose things when you want to get your change management ideas across.’
Motivating your people and keeping them motivated is important, suggested Allen. But how do you do this? ‘Challenge them,’ was Downes’ suggestion.
‘It’s also important to expose them to the outside world,’ added Visarius.
But keeping people is less of a problem than attracting them in the first place. Logistics is an area that isn’t exactly seen as glamorous, though perhaps that too is now starting to change. ‘Of course good salaries help,’ quipped Reilly.
Supply chain operations staff used to be ranked far below sales and marketing people but they are catching up fast. In the past, anyone in business wanting a decent pay packet automatically went into consultancy but maybe those days are coming to an end, senior practitioners are now being paid much higher salaries.
One other reason people aren’t attracted to a supply chain career is that few outside the sector know what it is, pointed out Ewer. Perhaps we need to educate our educationalists?
Then Summanen asked: ‘If you were to hold a one-day off-site meeting, what would you talk about?’ The round table had plenty of suggestions. Downes mentioned a deceptively simple idea from his Cardiff Business School MBA: ‘We visited a chain of corner shops and tracked a chocolate bar through the supply chain. It was a fantastic exercise and when we presented it to our management team after the three-day course, after 20 minutes they were totally engaged.’ This, said Reilly, was the ‘aha!’ moment of the round table and he vowed to think of something similar for his own leadership agenda.
Or you could do what Visarius did when he was at Cisco – ‘We got all our logistics partners in one room to listen to our strategy.’
Allen said he found it useful as a journalist seeing a variety of different business models and approaches. ‘Maybe companies should look at and learn from things outside their own sector. I recently saw how a TV shopping channel manages its supply chain and it was a real eye-opener, with live information from customer questions and fast/slow moving stock being fed through to the show director, who then offers instructions to the presenter on how to pitch the sale, perhaps telling him which styles, models or colours need pushing and which to go easy on.’
That prompted Reilly to recount the famous ‘Green Volvos’ story, well known in supply chain circles but worth retelling. Volvo found it had too many green cars in stock so it ran a promotional campaign to shift them. The campaign worked well but then the production side of the business saw the data and thought, ‘Green cars are selling very well all of a sudden – we must make more of them.’ It just goes to show what can happen if you don’t have supply chain people who have familiarised themselves with other parts of the business or who are out of the loop.
Finally, an issue touched on over lunch was the emergence of supply chain personnel ‘hot spots’ – or should that be ‘cold spots’? One of the countries with the most alarming shortage of experts in the field is not the Netherlands or Germany as might be expected, but Switzerland – so many enterprises have moved their headquarters there for tax reasons.
With Logistics Europe editor Nick Allen in the chair, our panellists were:
Jeremy Bentham, vp supply chain at leading plastics maker Borealis which runs leadership development schemes for senior managers
Graham Ewer, president of the European Logistics Association, a federation of 30 national organisations in the EU and beyond
Xavier de Montgros, leader of supply chain strategy for the personal systems group of technology firm HP, which has developed an organisation focussed around skills development
Hanna Summanen, programme and faculty director at Brussels-based Management Centre Europe, the largest provider of business education services in Europe
Richard Downes, vp supply chain at Rexam Beverage Can Europe & Asia, a company that has grown quickly following major acquisitions and was overall winner of The European Supply Chain Excellence Awards in 2005.
Paul Reilly, strategy manager at British American Tobacco, the world’s most international group in its field and a company that has done a great deal of work on role competencies in the supply chain
Niek Visarius, EMEA supply chain and customer service director at Rockwell Automation, a strong believer that his area of responsibility should be a boardroom topic
James Hunt of Management Centre Europe