Supply Chain Risk Management Blog

Power, money – and technology: the rise of the supply chain CEO

Evidence supply chain management is increasingly critical to corporate success

Money isn’t everything, but it helps, and supply chain management professionals are likely to welcome evidence of rising salaries. According to the recent Institute for Supply Management (ISM) survey average salaries in the US grew 7.9% last year, while the proportion of supply chain managers making $100,000 or more is now up to 44%.

There’s evidence it’s not just a US trend, either. In the UK, another recent survey has predicted increased pay in the coming year, albeit at a slightly more modest rate of 5%.

For me, though, a more telling piece of evidence of the status of supply chain management is more anecdotal: the increasing numbers of supply chain managers who have gone on to lead their organisations as chief executive (where, of course, the financial rewards are all the greater).

As a recent article in Forbes notes, the role call of CEOs from a supply chain background includes leaders of some of the world’s biggest and best-known companies: Tim Cook at Apple, Mary Barra at General Motors, Brian Krzanich at Intel, Fabian Garcia at Revlon, John Hendrickson at Perrigo…

All told, it seems career prospects for supply chain professionals look pretty good. What’s perhaps even more interesting, however, is what that tells us about supply chains themselves.

Setting the course: supply chain strategy as corporate strategy

On the one hand, it clearly sends the message that supply chains are important – and touch a lot of the business; the Forbes piece says chief supply chain officers (CSCOs) now often control more than half companies’ spending and have two thirds of employees reporting to them directly. In short, supply chain managers are good choices to run the business because they know the business.

It also notes, correctly, that globalisation and changing manufacturing patterns means supply chains have become enormously complex. The supply chain function has had to attract smart people, and it’s perhaps not surprising some of those sharp minds rise to the top.

The reason for the increasing profile of supply chain managers, though, can probably be summed up more simply: Supply chain management has become a strategic position, making the progression to CEO more natural.

As the writer puts it: “The modern CSCO approximates the thought process of the CEO, balancing risk and opportunity, fighting the near-term battle with an eye on long term strategy, and focusing above all on profitable growth.”

The role of supply chain software

I would add one further thought: That this transformation is heavily supported by the increasing role of technology.

First, much of the logistics, administration and number crunching is increasingly automated, enabling supply chain managers and their departments to focus on more strategic issues. Second, it’s only through technology that supply chain managers can actually gain the visibility and understanding of complex supply chains – and associated risks – they need to make decisions.

That’s unlikely to change. After all, if supply chain managers are to keep making the step up to leadership, they’re going to have to show more than just that they’re responsible for making strategic decisions; they’re going to have to demonstrate those decisions are the right ones for the business.

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