Supply Chain Matters highlights a World Economic Forum sponsored white paper addressing strategies for rewiring global value chains, We additionally provide some added observations in a specific area.

World Economic Forum White Paper

The World Economic Forum in collaboration with global management consulting services firm Kearney, conducted a survey of over 300 global operations executives on topics related to “the rewiring of global value chains.”

This report intent was to status the five outlined transformation trends and was augmented by a qualitative 30 consultations “to understand what actions manufacturing and supply chain actors are taking to redesign their value chains.

This report’s summary observations indicate in part that: “The journey to bridge the gap between strategic intent and operational redesign of value chains takes time. The implementation curve on value chain optimization is steep, and the journey towards matching ambition with the robust and prosperous outcomes outlined in this paper does not happen overnight.”

The report can be accessed at this World Economic Forum web link.

Five Key Areas of Transformation

This paper builds on a 2023 outlined model of five key transformative areas that are stated as:

Global to globally connected , multi-local value chains

From “doing” digital to “being” digital across end-to-end operations

From cost-driven to customer-value driven operations

From regulatory compliance to innovative sustainability

From economies of scale to economies of skill

 

Addressing Supply Chain Management Functional Siloes

In this commentary, Supply Chain Matters adds our observations relative to the latter objective, which being economies of skill.

This report cites survey data indicating that “respondents cited an extensive shortage of key skills,” namely that the knowledge base of workers needed to leverage technology can maximize organizational wide potential.

Report authors point out a unique opportunity to rethink organizational models: “shifting to a ratio in which 80% of the workforce can work across functions, while the remaining 20% focuses on specific capabilities.”

We applaud such cited strategies because they are long overdue. It implies that transformation involves the ability of supply chain professionals to serve in roles that span multiple functions that include procurement, planning, operations and product management in functional or technology support dimensions. The goal is an end-to-end experience foundation, and the benefits can readily lead to “economies of skills.”

Yet, how long have goals for removing supply chain siloes existed without significant progress?

Our readers can more than likely attest to the many reasons.

Thay can include supply chain functions with separate leadership and performance bonus goals that can involve procurement, planning, operations, product management or customer service centric requirements.

Existing functional siloes involve separate islands of data, information and decision-making, predicated on different performance indicators. Legacy software applications reinforce the challenge, along with the continued need for spreadsheets to bridge cross functional or even cross-business decision making capabilities needs including more predictive capabilities. Context is limited to functional hand-offs of decision-making as contrasted with the need for end-to-end decision making.

Span of Control

The notions of the span of control for Chief Procurement Officer, Chief Supply Chain Officer or Director of Supply Chain or Operations are part of the challenge. In a Supply Chain Matters commentary published a year ago, we highlighted a rather insightful global supply chain talent survey study authored by human resources and recruitment management consulting firm Korn Ferry. This study polled CEO’s, Chief Supply Chain or Operations Officers, Vice Presidents and Managers. Key takeaways of this study indicated that:organizations must prioritize supply chain talent initiatives and investments” especially as “organization’s work to address changing needs of today’s dynamic and rapidly evolving supply chains.” This study’s executive summary addressed challenges in recruiting supply chain leaders, and indicated in part:

Supply chain leaders need a wide range of skills to be successful, but the skill most cited by respondents is an agile mindset. They also need effective communication and respondents report looking for new hires with end-to-end supply chain experience, effective communication, and experience building a team or with organizational design.”

Skills Based Job Requirements

A further aspect is the hiring of added people or the training of existing workers with job requirements that continue to take on a functional specific job description perspective.

We continue to advocate for skills based job requirements, namely what are the specific skills that will be required to not only successfully accomplish a specific role, but future cross-functional focused roles that involve more advanced technology skills that encompass an end-to-end supply chain business and decision-making need.

Compensation levels are a further area to be addressed in the notions of being willing to pay for advanced and most desirable skills that span both technical, analytical, interpersonal and creative skill needs.

Added Thoughts

As this World Economic Forum white paper concludes that manufacturing companies need to consciously decide where to invest time and resources.

Of the five defined transformation areas, our view is that a plan to address existing supply chain functionally driven siloes should have a strong weighting by the very nature of being fundamental toward achieving a desired state of change.

We encourage the sharing of reader thoughts on this specific area of value-change transformation.

 

Bob Ferrari

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