What does it take to run a well-managed supply chain these days? Before you start listing various processes, technologies and contractual partnerships, heed the advice of Linda Topping, vice president and chief procurement officer with consumer packaged goods manufacturer Colgate-Palmolive Co. (IW 500/74): “Supply chain management is getting exponentially more complex, so supply chain talent is the price of admission for the next decade.”
With more than 80% of its customers living overseas, Colgate-Palmolive relies heavily on a culture of global people management, one that emphasizes the company’s core values while maintaining both the highest ethical standards. Its Focus on 2020 leadership initiative is designed to provide career maps that, Topping explains, “expose our future leaders to the right experiences that will keep them engaged in their careers.”
While celebrated for its supply chain proficiency (Colgate-Palmolive was recently ranked at # 9 in the Gartner Top 25 Supply Chains list), the company knows that its continued presence on such lists will depend on building a collaborative organization, Topping notes. Citing recent demographic statistics, she observes that less than 20% of the current U.S. workforce have the necessary skills to match the needs of supply chain organizations.
“Today’s leaders need to change their company culture so that it will entice the next generation of leaders, and convince them to stay,” she says.
As chief supply chain officer of Schneider Electric (IW 1000/143), a manufacturer of electrical equipment and appliances, Annette Clayton agrees with Topping about the importance of people, but she looks at it from a different vantage point. “The supply chain needs to be the most customer-focused department in a company,” she says, which is a particularly tricky task since Schneider is fulfilling a customer order every second-and-a-half.
Schneider’s current initiatives to support its supply chain transformation include:
- Driving the proactive planning of procurement;
- Improving lead-time management through critical component footprint management;
- Flow design optimization of its distribution center network;
- Improving and digitizing customer service by partnering with selected transportation carriers.
While finishing just outside of the Top 25 Supply Chain rankings, Schneider is described by Gartner’s analysts as being on a rapid improvement trajectory. “Based on its extensive work to segment different supply chain models in line with unique customer requirements, [Schneider] is on track to improve customer satisfaction and inventory levels by double-digit percentages in 2014,” the analysts note.
“Deeper contextual understanding of customers, leveraging digital business as part of broader customer solutions and supply chain leading balanced growth are the most common trends among supply chain leaders,” says Stan Aronow, lead researcher on the Gartner Top 25 report.
For those companies still on the path to supply chain excellence (and of course, it’s a journey, not a destination), Dwight Klappich, a Gartner analyst focused on supply chain management, points out, “We know how to manage costs. Let’s start focusing on moving our companies forward.” He suggests that companies reallocate investments from simply running the business to growing and transforming the business.
For starters, improving supply chain visibility, he observes, will be at the top of the list of supply chain initiatives companies plan to focus on over the next year. In any event, one thing that top manufacturing companies have done, Klappich says, is “they recognize that supply chain technology is a source of competitive advantage. It’s time to stop treading water and end the myopic focus on operational execution. Let’s empower transformation within our supply chain organizations.”