What does it take to become a successful CSCO?

The grow­ing sta­tus of the chief sup­ply chain offi­cer (CSCO) was under­scored when US depart­ment store chain Nord­strom pro­mot­ed for­mer Ama­zon vice pres­i­dent Alex­is DePree to its board. 

The move high­light­ed just how impor­tant the sup­ply chain is becom­ing in enabling busi­ness­es across sec­tors, from retail to auto­mo­tive, to oper­ate effec­tive­ly in an increas­ing­ly com­plex, glob­alised and online world.

As Lucy Hard­ing, part­ner and head of exec­u­tive search firm Odgers Berndtson’s glob­al pro­cure­ment and sup­ply chain prac­tice, says: “Organ­i­sa­tions don’t just com­pete on prod­ucts these days. The effi­cien­cy of the sup­ply chain is becom­ing a com­pet­i­tive advan­tage in a way that not every­one under­stands.”

The issue is that, while the pro­fes­sion may have gained in promi­nence recent­ly, par­tic­u­lar­ly fol­low­ing the dis­rup­tion to glob­al sup­ply chains caused by the coro­n­avirus pan­dem­ic and more late­ly the Suez Canal block­age, its sig­nif­i­cance is still under­es­ti­mat­ed in some quar­ters.

In fact, a recent sur­vey by Talk­ing Logis­tics revealed that a mere 21 per cent of organ­i­sa­tions have appoint­ed a ded­i­cat­ed CSCO, although in 38 per cent of cas­es, oth­er lead­ers – fre­quent­ly the chief oper­at­ing offi­cer – do have exec­u­tive over­sight. But 41 per cent said they had no C‑suite rep­re­sen­ta­tion at all, while 44 per cent indi­cat­ed the sup­ply chain func­tion was only some­times or rarely involved in high-lev­el deci­sion-mak­ing and strate­gic plan­ning.

Put anoth­er way, a seat at the top table is far from guar­an­teed for sup­ply chain lead­ers. So why is the role fail­ing to get the uni­ver­sal recog­ni­tion it appears to deserve?

Supply chain isn’t sexy

A key prob­lem, believes Gary Con­nors, part­ner at man­age­ment con­sul­tan­cy Oliv­er Wight, is that it is all too often con­sid­ered a reac­tive, back­room func­tion. Ear­li­er in his career when attend­ing an awards cer­e­mo­ny, for exam­ple, he asked why none of his col­leagues were giv­en any recog­ni­tion.

“My boss said: ‘The best you can hope for is to be seen as reli­able. Sup­ply chain man­agers and func­tions just aren’t sexy’,” Con­nors explains. “So if you get 35 mil­lion dos­es of vac­cine out there, you’re invis­i­ble, but if you don’t, you’re on the news.” 

Anoth­er chal­lenge is the term “sup­ply chain” means dif­fer­ent things to dif­fer­ent com­pa­nies in dif­fer­ent indus­tries, result­ing in vary­ing lev­els of impor­tance being attached to it, says Hard­ing. 

“If you’re mak­ing prod­uct and mov­ing it around, clear­ly it’s a big part of how the organ­i­sa­tion oper­ates, so in fast-mov­ing con­sumer goods, for exam­ple, you’re more like­ly to have a CSCO sit­ting on the exec­u­tive com­mit­tee,” she explains. “But it’s not a main­stay role yet like a chief finan­cial offi­cer, who you’ll find on the exec­u­tive com­mit­tee of most com­pa­nies.”

The post is con­tin­u­ing to grow in sta­tus due to a num­ber of fac­tors though. The first is the impact of Ama­zon and ecom­merce on chang­ing cus­tomer expec­ta­tions of avail­abil­i­ty and deliv­ery times. 

As a result, CSCOs pro­gres­sive­ly “need to be in the room to input into busi­ness strat­e­gy and cus­tomer ser­vice, and under­stand how to deliv­er on sup­ply chain goals”, par­tic­u­lar­ly with the cur­rent back­drop of polit­i­cal and eco­nom­ic insta­bil­i­ty, says Hard­ing. 

The sec­ond fac­tor relates to the sus­tain­abil­i­ty agen­da, which has been steadi­ly gath­er­ing momen­tum. The issue for many com­pa­nies is the car­bon foot­print of their wider sup­ply chain is sig­nif­i­cant­ly greater than their own, result­ing in much of the respon­si­bil­i­ty to sort the sit­u­a­tion out falling to the CSCO.

What makes an effective CSCO?

Giv­en this weighty brief, the key exper­tise and qual­i­ties required to suc­ceed include an abil­i­ty to see the big pic­ture both inside and out­side the organ­i­sa­tion, a remit cov­er­ing not just inter­nal and geopol­i­tics, but also an under­stand­ing of glob­al cul­tur­al per­spec­tives.

Blake Sher­wood, direc­tor of logis­tics and sup­ply chain at med­ical equip­ment sup­pli­er Nix­Covid, explains: “It’s about hav­ing a strate­gic overview, so you need some­one who can take a macro view to piv­ot and act quick­ly. But you also need a micro-thinker who can under­stand the small, but impor­tant, details too.”

Just as imper­a­tive are strong lead­er­ship capa­bil­i­ties. Because CSCOs are often respon­si­ble for the actions of hun­dreds, if not thou­sands, of peo­ple employed both in-house and by part­ners, sound com­mu­ni­ca­tion and col­lab­o­ra­tion skills are vital.

“You need to be some­one who can nego­ti­ate and col­lab­o­rate with oth­er func­tions across the sup­ply chain both inter­nal­ly and exter­nal­ly,” says Con­nors. “So most lead­ers are affa­ble, but can neu­tralise pow­er strug­gles to get what’s best for the busi­ness.” 

Maciej Zając, CSCO at cus­tom pack­ag­ing provider Pack­help, agrees: “It’s about being an influ­encer and prob­lem solver. But also, as sup­ply chain is such a broad sub­ject, you can’t be an expert in every area, so you have to be pre­pared to learn and work with peo­ple who are smarter than you in their area of spe­cial­i­ty.”

The CSCO’s time has come

Being able to com­mu­ni­cate effec­tive­ly in the board­room is just as impor­tant. As Hard­ing points out, CSCOs must be “busi­ness lead­ers first and func­tion­al lead­ers sec­ond”, which means see­ing, under­stand­ing and con­tribut­ing to busi­ness strat­e­gy through a sup­ply chain lens, before exe­cut­ing that strat­e­gy with­in their own func­tion. 

A final char­ac­ter­is­tic that is only like­ly to grow in sig­nif­i­cance, mean­while, is an open­ness towards embrac­ing tech­nol­o­gy and data to inform sup­ply chain strat­e­gy. 

“Right now the pan­dem­ic sit­u­a­tion is push­ing the sup­ply chain to become more tech cen­tric,” says Zając. “The more live data you have, the more agile you can be to align with what’s hap­pen­ing on the mar­ket, so it helps reduce risk but also makes the busi­ness more effi­cient by automat­ing and opti­mis­ing process­es.”

Giv­en these dynam­ics, Hard­ing believes the CSCO’s “time has come, whether we’re talk­ing at the divi­sion­al or group lev­el”.

“Some organ­i­sa­tions have had a mature and well-organ­ised sup­ply chain for a while, but the pan­dem­ic has made oth­ers realise just how core it is from the com­pet­i­tive-advan­tage view of reach­ing cus­tomers. So CSCOs will increas­ing­ly have a seat at the table and what was a back-office func­tion will be ele­vat­ed to have a wider voice,” she says.