The Supply Chain Moves Up

At the Extended Supply Chain Conference in London recently (as reported by AMR’s Kevin O’Marah), an informal poll indicated that 62% of highest ranking supply chain professionals report to the president/CEO/GM. This is up from 51% last year. While not a scientific survey, this indicates a growing recognition of the importance of supply chain management to the health and success of the organization. An additional indicator: only 8% report to the head of manufacturing – down from 15% last year. I think this second data point is equally significant. In Kevin’s words: “Looks like companies are steadily migrating away from an old-school industrial model, where supply chain serves the factory, toward one where supply chain includes manufacturing”.

My heart is in manufacturing but we can’t let ourselves focus only on our own issues and challenges. No factory is an island – suppliers and customers are critically important to everything we do in manufacturing and Supply Chain Management is the mechanism for coordinating, collaborating, and working effectively with those trading partners.

This blog is focused on Lean and Green concerns and those most certainly extend beyond our four walls. Most manufacturers have made significant Lean improvements within the plant but fewer are working toward a Lean supply chain. Supply chains link co-dependent entities.

Anything we can do to help our partners get leaner helps us and vice versa. The same goes for green efforts. Concerns like recyclability and the reverse logistics of getting products and materials back up the chain to where they can be reprocessed, re-used or properly disposed of all require joint effort and planning and are more successful when all parties are cooperating in the effort.

The supply chain doesn’t work for manufacturing; manufacturing is one link in the chain. While the bulk of an organization’s internal resources might be dedicated to production equipment and labor, in most industries materials are by far the larger portion of cost-of-goods-sold. By the way, everything we do is focused on making what the customer wants and needs, isn’t it?

Who does your head of supply chain management report to?
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