There is no denying that Supply Chain Management is critical to the overall performance of an organisation, yet how integrated it has become in many organisations’ overall strategies, is a matter of debate. In future, specialists who focused on cost containment will be extinct, replaced by business leaders and professionals who innovate, influence and implement. People who drive total cost of ownership and value creation across multi-tier supply chains.
The face of Supply Chain in South Africa has changed over the last few years. Supply Chain leaders proficient in dealing with ambiguity (having to work cross functionally within the business and simultaneously with multi-tiered suppliers and customers to create business value, efficiency and competitive edge) have had the greatest impact. A recent trend with Top Companies is to rebrand and align the Supply Chain functions into one integrated whole, from Plan to Source, Make, Deliver and Return. The result is that Supply Chain owns and manages the relationship and experience with, and of, the customer – customer centricity being the holy grail of business into the future, according to Gartner. Giving the Supply Chain leader true end-to-end value chain accountability.
This incorporation has added great depth to the Supply Chain function, with Procurement over the last decade transforming from just operational purchasing to Strategic Sourcing and Category Management, and recently (in more mature organisations) Supplier Relationship Management and Enterprise Development (including Procurement Excellence, which incorporates risk, governance, compliance, business process standardization and internal audit). Recently, Procurement Excellence is being expanded to the full enterprise, trends such as Big Data is taking flight, data scientists extracting data and providing information analytics and proactive monitoring of the end-to-end Supply Chain Performance, which in turn, is used by Senior leadership to make adaptive decisions across the chain at Executive levels.
Value Chain Management enables thinking that goes beyond product and price to helicopter vision. The next step up is the effect of Supply Chain on revenue generation. In South Africa, the BEE charter has impacted not only how companies source, but how they compete and sell in the marketplace. Clients have prioritised enterprise and Supplier development. This elevation is an agenda point with a number of CEO’s – some even actively sponsoring these functions. The industry hardest impacted is the Services industry, where BEE rating is a large qualifying factor for securing business. The charter has elevated the relevance of Procurement and highlighted the plight of skills development and employee transformation. Even the Gartner Supply Chain report has placed a significant weighting on CSR (Corporate Social Responsibility). Many companies are pulling CSR into the Procurement Department with Enterprise Development and Supplier Development. Supply Chain is becoming the puppet master pulling strings across the entire enterprise.
Changing Competencies
The rapid change of business has inherently, and will continue to do so, changed the skillset required to fulfil the growing demand. The traditional focus on technical skills “hard skills” is no longer sufficient. Competency has taken over as the key differentiator and predictor of success in these turbulent and changing times. Essential competencies having validity across the entire Value Chain discipline are:
1.Dealing with Ambiguity
2.Creativity
3.Innovation Management
4.Motivating Others
5.Planning
- Strategic Agility
- Building Effective teams
- Managing Vision and purpose
Influence and stakeholder engagement is no longer only the responsibility of the leader but essential at every level of the Supply Chain department. The critical competency gaps that are negatively affecting Supply Chain and business as a whole, are firstly, problem solving and analytical skills and secondly, Emotional Intelligence (EQ). In dealing with a large number of blue chip in South Africa, we have noticed and the Industrial Psychologists have confirmed, a sharp decline in problem solving, analytical skills and critical reasoning, in the current talent pool. With complexity and pace of business ever increasing, business requires innovation and solution generation with fast decision making. The current skills pool (which includes Tertiary Institution graduates) is simply not equipped with these skills.
Emotional Intelligence in terms of resilience when dealing with adversity as well as ambiguity is not sufficient for today’s business demand. There is a lack of perseverance, adaptability and flexibility. The second quality relating to EQ is interpersonal effectiveness. Commonly clients are complaining of insufficient competence in influence, stakeholder engagement and conflict management.
For Supply Chain to be an essential, relevant and strategically constructive business force, Supply Chain Professionals need to initiate and drive innovation and implement and execute efficiency across the value chain from point of source to end customer by demonstrating sharp business acumen and influence. The strategic value of Supply Chain professionals has increased overhead cost but the value they added to business have lowered the total cost of ownership. The bottom line is that Supply Chain can fuel and execute the business strategy.
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