New Success Factors In Supply Chain Leadership

by Marian Temmen

The pandemic crisis has disrupted operations across industries and

geographies. It has been a challenge that has given organizations a

unique moment to reimagine their supply chains. To enable a better way

of doing things. This is operations in a new normal.

Leadership teams are now working to address their supply chain

weaknesses that were revealed by the crisis. The impact of the pandemic

on operations across the supplier base, with production and distribution

We now know that we are in this for the long haul we will need to

develop an entirely new way of looking at how we sustain operations in a

world that requires organizations to be more resilient and rapidly

adaptable than ever: a shock-proof organization if you like.

All leaders now look to build plans to make supply chains far more

Flexible, agile and resilient.

Those clinging to the inertia of the status quo will not survive.

A good leader will consider bold moves to rebuild their organization

through a cross-functional collaborative embrace. They will also be open

to adapting to the supply chain shift in focus from execution to value

creation to build the new shock-proof organization required.

There are four imperatives for leaders to build an agile and resilient

supply chain: a shift in mind, skills, behaviour and systems.

Mind shift

Just as it did in the Industrial Revolution, the most significant change

is not only in the physical, but the way we see things as a society and

therefore, how we function in it. The day-to-day actions of employees

across the line.

Leadership will take many forms across teams, and those who are best

equipped are those that can be relied upon in an atmosphere of continual

uncertainty. In addition, the leader who can collaborate and negotiate

with others, and are therefore able to speak the language of

peers from other functions in the company, is capable of end-to-end

visibility and will be able to apply short term and long term thinking

with a holistic view of the company.

They are the leaders who have shown that they are adaptable, resilient,

open and collaborative in the face of critical challenges. These leaders

will need to grasp the opportunity to drive their newfound

responsibilities.

Skill shift

What stops you from adapting your practice quickly? I think we all know

the answer: bureaucracy. How do we streamline unnecessary bureaucracy?

By dispensing of rigid hierarchies and flattening the structure so that there are networks of teams; less time reporting, seeking approvals, and

sitting in meetings. With fewer middle managers and span-breakers,

this allows the system to respond quickly to emerging challenges and

opportunities.

Leaders will need to navigate networks of teams with less rigid

hierarchies to boost a company’s agility. Invest in the capabilities to

empower leadership, teams, and technology. Those that do will thrive.

In addition, the rate of technological and business-model innovation

alone makes it nearly impossible for any single organization to do

everything itself. That’s why leaders will be required to cultivate

partnerships.

Working with partners in new ways is becoming the norm. These

relationships are increasingly important in dealing with the pace of

change, complexity, and disruptions. An understanding of this from a

system-thinking perspective will give leaders a significantly better

approach than those that are thinking about short-term gains.

Let’s consider supply chain managers, for example. The daily life of

supply chain managers is full of challenging tasks: negotiating

last-minute order changes with sales due to new customer requests;

defining working capital requirements with the CFO for the next budget

period, or reviewing network structures for new emerging markets with

suppliers. This diversity is particularly driven by the cross-functional

nature of the job: Supply chain managers interact with many departments

and people within and across the organization.

Typically, they are flanked by analysts who are very focused experts who

dig deep to solve challenges analytically. They can produce detailed

production schedules, determine correct inventory levels, and optimize

service levels but they can sometimes miss the value they are bringing to

the company vision and the importance of demonstrating it to their peers

and senior management to motivate and lead.

Leaders at every level are crucial to an organizations capacity to be

rapidly adaptable and thus they will require soft skills that have not

previously been deemed necessary. In supply chains for an instant,

there has been less investment in these skills, which has resulted in

managers who are focused on data and execution.

Exchanging ideas with colleagues, reading books and attending workshops and (virtual) seminars builds a network within an organization, which could extend to customers,

making them aware of the consequences of decisions to other functions

and aware of their positions in value creation from a customer-back

perspective. A culture of adaptability relies on strong relationships

that improve decision-making processes and anticipate the next shock

while maintaining strategic focus.

Behaviour shift

Just because the times are fraught does not mean that leaders need to

tighten control and micromanage execution. Rather the opposite. Because

conditions are so difficult, frontline employees need to be liberated to

take responsibility for execution, action, and collaboration.

The pandemic has seen small and dynamic teams, made up of people from

different units in an organization but working towards a focused set of

monitored and measurable objectives. Leaders have made this work by

charging each team with a specific mission: an outcome that matters for

customers or employees, empowering each team to find its own approach,

and then getting out of the way. Having one fast, agile team is

helpful, but having many of them across an enterprise, and enabling them

with the right structures, processes, and culture, makes it possible for

the entire system to move faster.

Leaders must assign responsibility to the line, and drive “closed-loop

accountability.” That is, everyone working on a team must be clear about

what needs to get done by whom, when, and why. Employees must also be

equipped with the right skills and mindsets to solve problems, instead

of waiting to be told what to do. What this means in practice is fewer

meetings and fewer decision-makers in each meeting. Others are keeping

larger 30- to 40-person meetings (so the people that need to implement

the decisions are present) but cutting the number of people with a vote,

it is quicker. There is also less detailed preparation for each meeting,

fewer lengthy PowerPoint decks. And there must be a disciplined

follow-up to make sure actions were taken and the desired results

achieved. Such an approach both speeds up and improves execution.

The small group can quickly debate, narrow down options, and decide

final resource-allocation targets. For example, consider that

objectives and resources may be misaligned because decisions are made by

the CEO and head of operations perhaps and not at the level they should

be. Instead of using the allocation process to sort out what’s best for

the overall strategy, they handle pitches distilled from division and

business-unit leader, thus allowing them to maneuver to secure maximum

resources for their units.

System shift

The COVID-19 crisis has forced organizations to adopt and apply digital

technologies; leadership teams have reinvented core processes, adopted

new collaboration tools, the cloud, analytics, and data-management

technologies, to name a few. Consequently, people are interacting in

new ways, from remote learning to distance meetings, greater

centralization of planning activities and shorter planning cycles which

are hinged on advanced-analytics techniques.

Most notably, the organizations who survived moved quickly to use data and

analytics to shift capacity, secure vital raw materials, and reduce

management processes to a few priorities. The challenge was for those

organizations that lacked the basic technological understanding or

struggled with inefficient digital technologies throughout the pandemic,

such as in their supply chains and procurement.

Leaders need to drive technological acumen into all executives and

measure their proficiency and improvement, through frequent assessments,

kaizens, and skill-building sessions and certifications, just as you

would measure profit targets.

Forward-thinking companies are now accelerating their

capability-building efforts by developing leadership and critical

thinking skills at different levels of the organization, increasing

their employees’ capacity to engage with technology and use advanced

analytics, and building functional skills for the future, such as

next-generation procurement, Industry 4.0 manufacturing, and digital

marketing and sales.

Conclusion

What should be retained from this period of pandemic shock, is leaders

who build winning teams are those who pay attention to these shifts.

Slipping back into old systems could be easy, but leaders must ensure

that successes during the pandemic are firmly secured in the new

operating model. This involves making permanent structural changes that

promote rapid adaptability in ways that will inspire and empower

employees. Those organizations who adopt these shifts to be agile and

resilient in the face of uncertainty are those that invest in

capabilities to empower leadership, teams, and technology to allow their

teams to make rapid decisions and execute them. Even well-run organizations

may find that they need to reinvent themselves more than once.