Survey Finds 76% of Manufacturers Lack Chief Supply Chain Officer
Manufacturing is increasingly outsourced. A slew of oncoming pressures from customers, regulators, shareholders, and Mother Nature – among others – pose significant risks upon manufacturers and their supply chains. In a new study, 40% of manufacturers surveyed said their businesses were impacted by a supply chain disruption in the last 12 months. In other research, the numbers are even higher. Compounding the risk is the impact of a disruption. The West Coast port strike had an estimated $7 billion impact on commerce, for example. The stakes are high. Risk levels are rising. At the same time, customers are more demanding. Growth in the current economic environment does not come easy. Manufacturers are moving even further beyond their comfort zones to deliver products in new markets and regions. There's a move to “produce locally, sell locally” to serve overseas markets while keeping costs low.
With so many success factors hinging on the supply chain, it's surprising to see so few companies placing supply chain at the C-level. 76% of manufacturers operate without a Chief Supply Chain Officer. Consider how many parts of an organization the supply chain touches directly or indirectly. Basically, all of them. The supply chain is an extension of the business. It's the extra-enterprise that has no boundaries. Yet, it has to be managed and controlled. Visibility, transparency, and collaboration are essential to making this happen. Unfortunately, without a strategic C-level leader, supply chain strategies often fall short. Without a champion of end-to-end visibility or a visionary who can move the enterprise towards a supply network approach, many initiatives collapse. The result? Short-sighted goals. In this study, 41% of manufacturing executives said their most important supply chain goal for the near future is reducing costs. Not visibility. Not collaboration. Not supply chain agility or a networked environment to align supply and demand. Cut costs.
Many will say that cutting costs is what you do in a bear market. You pull back, carve out efficiencies. This may be true. But it can't be at the expense of long term vision and growth. Investments in supply chain visibility provide the foundation for long term innovation and growth, while setting up new possibilities for removing costs. Moves that reduce inventory. Remove days from cycle times. Extract capital costs from transactions. Or eliminate distribution centers or domestic handling costs. Henry Ford once said, “A man who stops advertising to save money is like a man who stops a clock to save time.” Apply this to supply chain: “A company that focuses its supply chain strategy on simply cutting costs does not have a real growth-minded supply chain strategy.”