Supply Chain Managers (SCM’s) are employed to deliver two key objectives for any business:
1. Ensuring the demand of customers are met
2. Optimising the total cost of supply
In pursuing these objectives, SCM’s interact most often with the functions that are responsible for the flow of goods from Supplier through to Customer, the elements of Buy, Make and Move.
The nature of work is a relentless drive for continuous improvement and dictates that SCM’s also frequently interact with other business areas such as Sales & Marketing, Product design, Finance, Quality and IT.
It is important to recognise that SCM’s do not exist to oversee or replace the core responsibilities of any other function. SCM’s are there to compliment those core capabilities and help each individual function to find better ways of working within the business. SCM’s will reach deeper into the organisation and beyond the organisation boundaries in pursuit of opportunities to improve processes and achieve better integration, collaboration and communication through the chain.
Complexity and Challenges
Supply chains can vary from simple to complex models involving multi-stage manufacturing, procurement and transportation, such as in this schematic. Not all elements of the supply chain will be the direct responsibility of any one business, but it is important for SCM’s to understand how each of the parts interconnect so that opportunities to improve overall efficiency or effectiveness can be identified. Achieving competitive advantage can rely upon the smallest of details, and these are the areas in which Supply Chain Managers excel in pursuit of the optimum process.
Supply chains face perpetual challenges from both market and supply sides. Supplier reliability issues can be disastrous to any business, and so can demand volatility challenges unless managed carefully. SCM’s are involved in facilitating the creation of agreed plans to recover from shock events. Crucially, SCM’s will engage all parties in the chain to ensure the plan is shared by the supplier, all the company functions and the customer.
The Bullwhip effect is a commonly recognised challenge for all supply chains and describes the incremental effect of a small variation in demand that translates into a much more exaggerated effect throughout the chain. Understanding this dynamic and deploying solutions to overcome the impact that the bullwhip effect has on a supply chain is an important activity for SCM’s to undertake.
Goals for Supply Chain Managers
SCM’s contribute to profit in two ways – enhanced revenue through improved supply chain effectiveness and reduced cost through improved efficiency.
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐶𝑜𝑠𝑡
Supply Chain Manager Skills
- Fosters collaboration
- Analytical and data driven
- Able to challenge others
- Can manage complexity
- Continuous improvement mindset
- Financial awareness
In fulfilling these business goals, SCM’s will monitor chain performance at relevant places to identify areas that require improvement. SCM’s will manage improvement initiatives whilst engaging all stakeholders to ensure total commitment to the improvement plan.
Managing all of these complex dynamics requires an individual that possesses specific skills and experience that is capable of interacting on a broad setting, often with multiple businesses. The nature of SCM work is closely allied to that of other business functions – Quality, Continuous Improvement, Project Management and Sustainability. Establishing shared goals between these functions can be a powerful force for any business.
Andrew Kilkenny, Founder of Simply Succeed.