10 Critical Traits for the Supply Chain Leaders of the Future
June 7, 2021
June 7, 2021

We like to talk about supply chains when things go wrong—and that makes sense. When you’re not deeply entrenched in the day-to-day handling and subtle complexities, it’s easy to forget there’s an entire logistical symphony happening for every paper product we use, shirt we wear, and fuel we burn.

Some describe it as purchasing, some as logistics, some say planning team, but in reality it’s an end-to-end—and highly nuanced—process. True supply chain management walks the tightrope between service delivery and costs. On one side, we must deliver on our customers’ service expectations. On the other side, we have to optimize our expenses—and grow our profit margins.

Too often, business leaders develop a laser focus on just one of the two, rather than learning to keep balance. We see this time and time again: A multi-billion dollar operation that spends nearly 90 cents of every revenue dollar in the supply chain and doesn’t identify as a supply chain company. This says they haven’t had their supply chain “ah-ha!” moment yet, the moment where they realize effectively managing the supply chain is the key to both growth and profitability.

It’s when the blinders come off that the true magic happens. The secret to maintaining homeostasis is evangelizing the importance of the supply chain from the highest positions in your organization and dusting off your microscope to be on the constant lookout for rusty links in your chain, even when things appear to be running smoothly.

The supply chain leaders of the future will see their supply chain as an ever-evolving process that will never be “done.” Here are ten leadership rituals that will help you master that delicate dance between customer experience and costs.

1. Practice customer-centricity
If we subscribe to the notion that the objective of supply chain management (SCM) is to minimize total supply chain costs while meeting customer service requirements, we’re faced with a chicken-or-the-egg-like conflict. Which comes first?

The best supply chain leaders let the voice of the customer drive decision-making. Follow up every idea with, “how will this affect our customers?” It’s not that every operational improvement must add value to their lives, but rather that each time a decision is made we must identify and consider how that decision will detract from or supplement the customer experience. Each chess piece we move should improve our position in the customer experience game in some way, ideally, reducing the friction existing between consumers and their desired purchases.

2. Exercise end-to-end expertise
There’s a reason real estate with a view comes with a higher price tag—there’s value in perspective. It’s time to zoom out.

Leaders tend to think in terms of siloed optimization, which causes end-to-end suboptimization. It’s a chain, after all, and the integrity of each individual link influences the integrity of the whole. Even though you may work in one area only, it is essential to understand the downstream impact of changes—which goes back to our previous point about recognizing the importance of the supply chain for what it is and communicating the overarching mission to all of your operators.

Having an SCM vision that clearly draws a connection between the “what”—think people, places, and processes contributing to the supply chain—and the “why”—customer needs and expectations. Actioning that vision requires collaboration, networking, relationship management, technical expertise, and most importantly, gumption.

3. Embrace change
Change is the only constant in our lives, and the same is true for SCM. One of the biggest (and most costly) mistakes leaders make is viewing change as an isolated event that happens at a single point in time.

The more the market changes, the more our customers adapt and change (think omnichannel and pandemic-induced disruption), and the more complex supply chains need to modernize in tandem. Embracing change management head-on will open the door for a more harmonious relationship between customer experience and total supply chain costs.

4. Stay strategic (but know how to execute)
Finding a leader that not only has the big ideas but can see the idea through to execution, is one in a million—but it’s a critical part of owning SCM.

In a backbone function that moves a mile a minute—quite literally sometimes—strategy without execution doesn’t work. Supply chains have to be a step ahead because when there’s a problem in the chain, it’s essentially too late to fix. Sure, remaining agile and change-forward is part of being a leader, but there’s also something to be said about being so in sync with your supply chain that you see the leading indicators of a failure and implement a stopgap before the event takes place.

It’s all about deconstructing strategic direction into bite-sized pieces. We can do this by choosing one or two things each day that we know we can move the needle on, and then holding ourselves accountable for those items no matter how many fires we’re called on to extinguish.

5. Treat problems with long-term solutions
A true testament of problem-solving competency isn’t in the ability to recognize and pinpoint inefficiencies, but rather defining a path forward once you’ve located the bad apple in the bunch.

The reality is all supply chains and organizations have problems, and if they didn’t, they wouldn’t need leaders. Forget finger-pointing and avoid the tempting “should have, could have, would have” conversations. Most problems are process problems—and the best of the best already know that.

6. Run toward conflict
Our advice: When conflict arises, run toward it as fast as you can. You can’t find the right balance between important and competing interests if you don’t lean in to listen.

What separates the good from the great is the comfort in challenging the status quo and the ability to combat moments of discomfort—whether they be interpersonal or operational—with radical candor. If this makes you think leading a supply chain is becoming an exercise in mediation, you’re right.

7. Set objective KPIs
Most of the time we focus on lag metrics and not lead metrics, but we shouldn’t be afraid to measure things that are not going well – this is often best spotlighted by a lead metric. In fact, measuring what’s not smooth and steady shines some light on areas that may need further attention. Put simply, what gets measured gets improved.

Acknowledge what’s going well, but spend more energy pouring over what isn’t. Amending a collective of small inefficiencies can be a moonshot to profitability, but these are easily overlooked when the KPIs are designed to highlight your wins and shield your losses. Most metrics are meant to drive optimization in a silo or specific organizational function; true supply chain KPIs look across the entire supply chain to drive success overall.

8. Think lean and mean
More sophisticated supply chain management doesn’t (or shouldn’t) always mean more complex processes. In a siloed environment, it’s easy to fall into a rhythm of overengineering processes because you’re working harder to reach a state of alignment. Typically, only a fraction of processes add value—we’re talking as little as 5%—and the rest do not.

Lean thinking goes after the 95%. It’s a set of concepts, principles, and tools used to create and deliver the most value from the customer’s perspective while consuming the fewest resources. Practitioners who have mastered the art of lean thinking, no matter which industry bucket they fall into, have the ability to attack process problems with a structured problem-solving methodology that drives improvements that trickle down all the way to the end customer.

9. Manage risks proactively
Similar to conflict, we must confront risk head-on. Think back to a month or so ago when a certain container ship obstructed the Suez Canal for a whopping six days and brought waterway traffic to a standstill. Over $1 billion in losses and 400-some reroutes later, only a select few have called out the underlying problem at play: The inherent risk that comes with long-distance supply chains.

We shouldn’t be blaming the width of the canal or chalking this up to a static instance of misfortune; this is a symptom of long-neglected risk of far-off, “low-cost” labor locations. Supply chains of tomorrow need to look at total costs including risk and drive to closer, more flexible and consistent routes and sources of supply that wouldn’t crumble in the event that the Ever Given strikes again.

10. Seek to serve
Traditional organizational structures have everyone in the matrix “serving” the leadership; servant leaders flip this norm on its head and exist to do right by the people working for them. It’s the everyday people working on the front lines of our supply chains who ultimately serve our customers. Meaning, the customer experience is a direct reflection of your employees’ sense of belonging, purpose, and overall satisfaction in their role.

People value what they do when they feel valued, and there is no greater way to build trust than by celebrating the talent you surround yourself with.

Be the standard for change
Let’s end with one thing that will never change: Supply chains will always be at the mercy of customer demands and those demands are forever expanding.

Regardless of the role you hold within the supply chain, you are a change leader in the organization, and the decisions you make and the mission you lead with will determine the position you occupy in the market. We have an opportunity to shift the narrative around SCM and draw attention to the accomplishments happening behind the scenes, but to do so, we must tear down long-standing silos, trade bandaids for preventive care, and be bold enough to scrap what isn’t working.