News / Supply chain executives: to the boardroom, or the basement?

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Supply chain executives’ spell in the limelight could prove short-lived – unless they can contribute actively and visibly to corporate strategic objectives.

According to consultancy Gartner, they are facing the prospect of a diminished role in the boardroom and a reduced allocation of funding for their projects.

“Stakeholders perceive that the worst of the supply chain crisis has receded, and CSCOs now face the prospect of being allocated fewer resources with the expectation of returning to a role more confined within the enterprise,” said VP analyst Tom Enright.

He was speaking at the 2024 Gartner Supply Chain Symposium/Xpo in Orlando earlier this month.

Over the past 18 months there has been a marked shift in focus to cost reduction as supply chain congestion eased while costs went through the roof, which has shrunk the pie for investment. At the same time companies have felt pressure to spend on emerging technologies, which shifted the spotlight from chief supply chain to chief technology officers.

Supply chain chiefs who concentrate on the cost control element are positioning themselves for a minor role, Mr Enright warned.

“While the supply chain function is most often delegated cost management responsibilities, it is indispensable for delivering other important forms of value,” he stressed. “It is up to supply chain leaders to identify and prioritise those investments that will deliver simultaneous sources of value, in line with their team’s strengths and stated priorities.”

He cautioned against over-reaching, though, saying that a do-it-all approach would be doomed to failure. Positioning the supply chain group for the emerging challenges requires a re-think of organisational roles, he said, adding that moves on the organisational level are more promising.

Supply chain investments must have maximum impact across key priorities of the company, such as growth and sustainability, he declared. Supply chain leaders should prioritise investments that allow progress on multiple objectives, he said. For instance, new technology may have multiple outcomes across the organisation.

In the same vein, Hernan Saenz, senior partner and global head of performance improvement practice at management consultants Bain & Co, has argued that supply chains demand more complex trade-offs across a growing set of priorities, adding that companies that get this right will enjoy a competitive advantage.

He sees companies grappling with a revamp of their supply chains that incorporate lessons from the past four years as well as trying to come to terms with new shifts caused by labour challenges, sustainability pressure, customer expectations and the adoption and integration of emerging technologies.

Supply chains must become more resilient, sustainable and highly responsive to changing customer expectations, he said.

This calls for a strategic approach that is at boardroom level.

“Supply chain reinvention is a CEO-level problem and opportunity,” Mr Saenz said.

Which suggests that supply chain leaders will be either relegated to cost control exercises or needed at the top level to steer supply chain reinvention.

Douglas Kent, EVP of strategy and alliances of the Association for Supply Chain Management, sees supply chain chiefs well entrenched with senior management, pointing to de-globalisation and the challenges of balancing the need for agility with ongoing levels of disruption as companies strive for supply chain resilience.

“I don’t see anyone take their foot off the accelerator to keep the C-suite filled with people who understand supply chain,” he said. “The importance of the role is now so recognisable that having a seat at the table is going to be the norm.”