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Supply Chain Earns a Seat at the Table

Supply Chain Earns a Seat at the Table

Chief supply chain officers are becoming more influential within manufacturing circles.

Supply chain leaders at manufacturing companies are increasingly likely to have a seat at the executive table, according to a survey from Tompkins Supply Chain Consortium. Roughly half (51%) of the manufacturing companies surveyed have a supply chain leader at or above the executive vice president level, with the apparel and automotive companies leading the way among those surveyed at 100%, while 57% of food & beverage companies acknowledged having an executive vice president of supply chain, or what's known as a chief supply chain officer (CSCO).

"With supply chains becoming more dynamic and agile, organizations need to able to keep up with the pace," says Bruce Tompkins, executive director of the Consortium and author of the study. "And these companies are beginning to realize the significance of having a high-level supply chain executive influence their business strategies."

There are, however, sizable communication gaps within some companies, such as not having the supply chain group involved in setting inventory targets. And though it's a relatively small percentage, 14% of manufacturers surveyed say they do not have a formal process for aligning their supply chain goals.

"These gaps in goal alignment indicate significant opportunity for better communication and integration of supply chain functions," Tompkins says. "However, companies are discovering these opportunities for improvement, and there is an increasing trend toward resource sharing across divisions and business units."

Based on the survey, such tasks as transportation execution, warehousing and distribution center (DC) operations, supply chain network design and planning functions are now typical responsibilities for a CSCO (see chart).

In a separate study from analyst firm Aberdeen Group, the following are three key priorities that supply chain executives should have when it comes to managing their supply chain plans:
  • Supply-demand-finance balancing is critical. Supply chain executives need to be involved at various levels in the operations, including demand forecasting, constrained supply chain planning, predictive modeling and risk management.
  • Outsourcing is creating new supply chain dynamics -- time and speed are critical. CSCOs are planning and forecasting more frequently, with four out of five making major updates to forecast at a frequency less than or equal to a month, while 77% make major updates to supply plans at a frequency less than or equal to a month. This increased frequency is directly due to a corresponding increase in uncertainty and lack of visibility due to outsourcing. As a result, companies are trying to perform constant planning and re-planning.
  • Create a chief supply chain officer or similar role. If you don't already have somebody with a CSCO role, get one, the Abedeen study recommends. This will help provide the strategic impetus that supply chain needs within a company.

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