The Supply Chain Management – a Skills perspective

If you are following the war  between Samsung & Apple over supremacy in the Smartphone race – then you have one more variable to discuss. Recently the The Hindu Businessline published an article about Samsung chasing the suppliers of Apple.

The flipside of overtaking Apple with the sales of Galaxy series is that Samsung’s in-house supply lines have been stretched out – and the firm is now courting the suppliers of Apple like Qualcomm, Corning and Taiwanese chip maker HTC.

A case where Organizational growth now rests on its supply chain.

The Supply Chain discipline has evolved dramatically in the last couple of decades. In started in the 70’s and 80’s where it was one of the silos of Manufacturing, to now where it interacts with almost all departments right from the raw material procurement to manufacturing to customer support.

This drastic shift in the deliverables has impacted the skills required of the professionals manning this function. The profession continues to grow beyond its distribution roots – increasingly into strategic planning.  Consequently Supply chain managers require both broader technical expertise and deeper technical excellence.

The Inception

Supply Chain as a concept arose from the work of Jay Forrester of MIT in the early 1960’s. It was not until 1982 that Keith Oliver mentioned it in a Financial Times interview. The adoption of SCM was slow during the 80’s as the traditional siloed departments took baby steps in collaboration. The continuous replenishment program of big retailers Walmart & P&G were one of the early initiatives. The adoption picked up pace and the 2000s saw widespread acceptance of the SCM practice.

Evolution

SCM has redefined the way companies are organized and run. Traditionally the company was viewed as set of independent functions operating within clear cut boundaries. Each of these functions whether it be purchase, material handling, warehousing , transportation or customer service followed a vertical flow. They received inputs from an upstream silo performed an action and sent their results downstream.

This vertical cascading process was the norm as a result of which decision making was simple. Managers focused on a single function with few variables to consider. As firms loosened their functional boundaries, departmental walls became more porous. Managers needed to develop cross company communication channels. Decisions made in one function were analysed for their impact on other function areas. As a result decision making became more complex and convoluted. The different decision makers were no longer under one roof or in the same company. As managers aligned with upstream and downstream partners it became more difficult to exert direct control over operations. Persuasion and collaboration became the need of the hour along the extended supply chain.

SCM in its current form has flipped 90 degrees. From being a vertical siloed orientation to an horizontal one mirroring the flow of material, information and money.

The Growth of SCM       

Currently SCM acts as a strategy enabler. The practice of SCM is expected to anticipate competitive challenges, obstacles and opportunities. In a way SCM has become the shock absorber and a bridge. It buffers the firm against volatile demand, uncertain supply and disruptions. And, it serves as the bridge between the organisation and its trading partners – both customers and suppliers. However the move away from functionality towards strategy enablement requires SCM to adopt new skills befitting the new role.

The New-Age SCM Professional

The glacial shift of the SCM practice from being a siloed function to an organizational strategy enabler- has placed different skill demands on the professionals. While earlier leaders were functional experts the newage comprise of master coordinators. Earlier the managers had direct control over all aspects of their function as result they developed “hard” skills for leading people directly in their control. Today the leaders are required to influence behaviour across the entire supply chain to include people who do not report to them. These leaders have become influencers, requiring to exert influence indirectly and achieve objectives through persuasion. There are three areas of expertise that are key to the current and future SCM Leaders-

  • Emphasis on a blend of soft and hard ( analytical ) skills
  • Ability to excel as leaders of virtual MNC teams
  • Appreciate big picture issues and communicate horizontally and vertically.

As SCM evolves it does so at different rates around the world. The emerging economies have a lot of catching up to do, but the gap is closing fast. The SCM leadership challenges in these countries are unique in a number of ways.

Rather than predict which skill sets will be top priority 10 years from now a more effective response would be to be prepared to meet these demands by being flexible and agile now.

Ref: Supplychain management Review Jan/Feb -2013. The Leadership Challenge:

Keeping Pace with the Skills Needed By Edgar Blanco and Chris Caplice

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