The Chief Supply Chain Officer (CSCO) is a key stakeholder in the company. Reporting either to the COO, or the CEO directly, they make supply chain transformation happen. In the journey to transformation, the CSCO is often asked to deliver more than just efficiency. For a company to remain competitive, the CSCO must deliver innovative cost-reduction strategies and present a market strategy differentiator.
Consequently, the CSCO must find the way to continuously work toward the improvement of their supply chain planning processes. However, in today's agile supply chain this kind of improvement is highly linked to the demand and adoption of improved supply chain technology to remain relevant. In other words, it is not possible to have one without the other. Succeeding in supply chain planning will create the potential to provide market differentiation for companies.
Building a strategic supply chain planning requires best practices in supply chain network design, demand forecasting, inventory optimization, supply planning, and sales and operations planning (S&OP). However, the list doesn't stop there for the CSCO.
Prioritizing portfolio complexity management
During Mobile World Congress (MWC) in Barcelona this year, it was clear that global electronics manufacturers are in a speedy race to introduce new products to the electronics consumer market. Therefore, for the electronics supply chain, it is of paramount importance that their CSCOs stay one step ahead of the game, prioritizing portfolio management, and collaborating with business partners to optimize a rich and healthy portfolio.
According to Gartner's research paper, Portfolio Complexity Management Must Be a Priority for Chief Supply Chain Officers, the researchers emphasize the best way of measuring and influence the amount of product complexity that is healthy and acceptable for the organization.
The analysis advices CSCOs on why portfolio complexity matters and why it should prevail as a key priority for CSCOs, addressing also the impact of portfolio expansion in the supply chain, and the best practices recommended for optimizing portfolio productivity.
The ongoing evolution of CSCO responsibilities
According to Oscar Lindqvist, business advisor for SAS Institute Finland, who worked for more than 10 years as supply chain manager for the manufacturing industry, the responsibilities and priorities of the CSCO, however, go further and further these days and should not be a limited function –mainly to logistics– as it still remains in many organizations.
“The idea with Supply Chain Management, in that it covers all the central functions that a company has, not only supply planning, order fulfillment, warehousing and logistics –a setup that nowadays is very typical,” Lindqvist told EBN.
According to Lindqvist, the setup should look like something like this:
The CSCO should be responsible also for strategic planning, procurement, and manufacturing,” said Lindqvist, adding “usually these three parts are not included in the supply chain, and the result is only sub-optimizing, you don't get the optimal outcome if the supply chain officer is below the procurement and manufacturing in the organization hierarchy.”
According to Lindqvist, the CSCO, or equivalent, who is only responsible of logistics and, therefore, not included in the management board doesn't get as much benefit for the organization as they should. “[ … ] then, you don't get the benefits that was the original idea of the supply chain concept,” he said.
Indeed, if your organization has not yet included a CSCO in the management board your supply chain is not evolving as it should. The inclusion of a CSCO is, at this point, of paramount importance in the evolution of a strategic and agile supply chain planning.