The July 15th edition of CIO Magazine had a career strategy article entitled: Is Supply Chain Leadership a Good Move for CIO’s? The article points out that many Chief Information Officers (CIO’s) view their career path toward Chief Operations Officer (COO), and that would involve a dual role of managing the supply chain as well as all of IT. The article additionally points to CIO’s having transferable management skills in managing complex projects, globally dispersed groups, a slew of vendors, and negotiating a complex set of contracts. Also, with more and more IT services being outsourced to third parties, a move toward management of supply chain operations insures the CIO’s connection to the P&L and managing mission critical operations.
My observations of supply chain management structure for the past decade indicate to me that in certain organizational situations, the combination of the CIO and supply chain management role can produce effective results, but opportunities are driven more by a specific or opportunistic business need, and not a broad organizational trend. So, to eliminate more needless turf battles, I will provide some specific examples.
One successful example of this was Hewlett Packard. Giles Bouchard, a former CIO, was appointed Executive Vice President for global operations in 2005, including a $50 billion supply chain, and all customer-facing operations. During that time, Giles was appointed to be a member of HP’s Executive Committee, a direct report to newly appointed CEO, Mark Hurd. Mr. Bouchard’s previous history in HP management included GM of HP’s Pavilion Home PC Business in 1989, VP of Business Customer Operations, and Sr. VP of Operations for the Imaging and Printing Group. During the merger of Compaq with HP, Bouchard was responsible for merging the two supply chains together, and Giles was more than able to successfully accomplish this task, saving HP a slew of money. In this particular situation, the primary business need called for elimination of redundancies in operations and multiple supporting applications. I had the opportunity to speak with Giles on several occasions, and we touched upon the fact that a model where one senior manager could be accountable for synchronizing supply chain operations changes with required IT changes helped immensely in cutting through organizational silos and foot dragging. Giles departed HP, when the global supply chain organization was decentralized in early 2007, the newest phase of HP supply chain management structure.
Other examples include manufacturers such as Honeywell International, Owens Corning, RPM International and Sara Lee, where a combination of IT and supply chain leadership can prove to be successful. An implementation of a major ERP or SCM system, high activity in mergers and acquisitions or when the bulk of supply chain services are outsourced to third party service companies such as 3PL’s or 4PL’s also lend themselves to this organizational model.
Manufacturing and retail firms should be open to innovative senior organizational management models, including the combining of CIO and supply chain, when the business strategy needs warrant such a move. These models are opportunistic and based on matching organizational need with available senior management skill sets.