From the Backroom to the Boardroom

The rise of the Chief Supply Chain Management Officer

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Global directional level corporate and policy decision making corridors are going through unprecedented changes. These dramatic shifts have been largely influenced by the increasing importance boardroom executives attach to supply chain management.

Today, the skills and knowledge of supply chain management professionals are increasingly being utilised, with forward-thinking executives and policy makers now officially accepting the chief supply chain management officer as a member of the C-Suite.

Drawing on a sample of international organisations, including Fortune 1000, FSTE 250, JSE 100 companies, and public sector organisations with a combined revenue or spend of well over a trillion USD, the study by Professor Douglas Boateng[1] examined director perceptivities on the strategic importance of supply chain management and, in particular, the increasing boardroom role of the chief supply chain management officer.

C-suite executives that took part in the longitudinal study included CEO’s, CFO’s, COO’s, directors, and officers from manufacturing and production, mining and recourses, food and beverage, government, agriculture, logistics and public sector organisations.

The Chief Supply Chain Management Officer

The chief supply chain management officer, who often takes responsibility of functions such as procurement, logistics, customer service, and operations, is known to possess the tools needed to innovatively lead value-driven initiatives across such functions, as well as within business units and across broader value chains.

With such sought after skills, it is not surprising that 48 per cent of the above-mentioned research study’s respondents agreed that the chief supply chain management officer will become a standard C-Suite role within ten years.

According to the study, well-crafted supply chain management strategies are considered to be most critical for, among other things, long-term wealth creation, small business development, government service delivery quality, industrialisation, national economic development and job creation.

In terms of wealth creation, 70 per cent of the global executives that participated in the study saw supply chain management and procurement as aspects that they considered to be crucial for long-term wealth creation.

In addition to this, 64 per cent and 66 per cent of the executives agreed that supply chain management and associated procurement aspects has a direct impact on small business development and job creation.

This emerges as particularly significant when compared to the percentages received for perception of logistics’ and finance’s impact on small business development, which came in at 6 per cent and 12 per cent respectively.

Growing Recognition of Supply Chain

In relation to complex supply chains, such as government, where service delivery quality is critical for value creation, 34 per cent of global respondents viewed the supply chain management function as essential to the success of quality service delivery. This is an increase of 19 per cent over a four year period.

This significant increase highlights a growing recognition that the supply chain should no longer be viewed in terms of ‘cost of ownership,’ but should rather be regarded in terms of its overall impact on business and society.

Such support of the role of supply chain management in the successful realisation of public sector services and initiatives can further be seen in various governments’ active use of supply chain management to not only improve public sector governance and delivery, but also to add more value to resources, stimulate SMME growth, and create sustainable jobs.

In terms of the C-suite executive having the dual responsibility of directing acquisitions and payments, 86 per cent of the global executives saw this as creating ethical and conflict of interest challenges. Although there seems to be a general consensus, the 14 per cent increase over a four year period clearly indicates that there are concerns among the C-suite members.

Finally, when it comes to the impact of supply chain management on industrialisation and national economic development, the study found that 68 per cent of global executives supported supply chain management and procurement as having direct impact on industrialisation and national economic development.

Transformation of the C-Suite

Based on these statistics it is evident that supply chain management has emerged as a prominent topic on both public and private organisations strategic agendas, and dramatic shifts in director level perceptions relating to the role of the chief supply chain management officer in organisational decision making, is leading to the transformation of the C-Suite.

Additionally, a clear recognition by director-level executives of the increasingly important role that supply chain management occupies in the overall organisational environment, highlights the growing influence that the chief supply chain management officer will come to exert in the boardroom and policy making corridors.

The findings clearly support Groysberg, Kelly and Macdonald changing C-suite assertions in the Harvard Business Review in March 2011[2].

Professor Douglas Boateng is an International Professional Director and an Adjunct academic; a Fellow of the UK Institute of Directors; Africa’s 1st ever appointed Professor Extraordinarius for Supply and Value Chain Management; and CEO of PanAvest International and Partners.

Professor Boateng has been publicly acknowledged by the Commonwealth Business Council for contribution to international supply chain management and emerging world long term economic development. 

[1] Boateng, D., (2015) Gauging director level perceptivities on aspects of supply chain management- A global longitudinal study

[2] Groysberg, B., Kelly, K. and Macdonald, B., (2011). The new path to the C-Suite. Harvard Business Review March