Customer experience and omnichannel commerce have been the hot business topics over the past couple of years, and for good reason. Emerging technologies such as mobile and social platforms have changed customer behaviors. They’ve also provided companies with new ways to engage customers.
But mobile and social are only part of the picture, and they take you only so far in becoming truly customer-centric and differentiating yourself in the marketplace. To compete in the digital economy, companies are discovering they must embrace more fundamental change. And to achieve that, they’re renewing their focus on the extended supply chain.
That new scrutiny has raised the profile of supply chain executives. In fact, several prominent companies have tapped people with supply chain experience to lead the enterprise – Apple’s Tim Cook and GM’s Mary Barra being just two examples.
But more organizations are creating a new role: chief supply chain officer (CSCO). The CEO runs the company. The CFO holds the purse strings. But today, the CSCO may be the most important role in the executive suite.
CSCOs for customer-centricity
Consumer products companies were among the first to establish the CSCO role. In part this is because the consumer products industry took the lead in pursuing omnichannel strategies. Retail changed dramatically as consumers embraced online shopping and direct delivery. Consumer products companies needed to retool their supply chains with the speed, visibility, and flexibility necessary to serve multiple channels consistently and effectively.
But the CSCO is strategic to any organization that intends to be customer focused. And increasingly, that’s every manufacturer. In manufacturing and asset-intensive industries, the CSCO is sometimes called the chief operations officer (COO). But whatever you call it, manufacturers need someone in the executive suite who’s responsible for all extended supply chain processes, from product innovation to product delivery.
That level of leadership is necessary as manufacturers grapple with the new drivers of the extended supply chain. Omnichannel strategies make the supply chain more complex. The need to deliver individualized products and become more customer-centric means the supply chain must be faster, smarter, and more flexible.
It’s no longer enough to make incremental improvements. CSCOs must lead the charge to actually transform the supply chain. For example, they need to continuously predict demand and automatically adjust product allocations across every channel. They must integrate warehouse and transportation processes to enable same-day or even one-hour shipments.
Extending the enterprise
But CSCOs aren’t only revolutionizing the supply chain. They’re also transforming the organization and its competitive posture. One key way they’re doing that is by bringing new talent into the enterprise.
First, the new business processes and business models of the digital economy are placing a premium on data analytics. Companies need data scientists who know how to analyze massive amounts of data and interpret the results accurately.
Second, the new emphasis on speed and flexibility creates a need for a larger contingent workforce. Especially in manufacturing and warehousing, organizations will rely on contingent labor to respond to demand fluctuation.
Third, manufacturing and warehousing will rely more and more on automation, especially robotics and the Internet of Things (IoT). While these technologies replace some skills, they call for new capabilities to manage digitized processes.
All these workforce changes begin in manufacturing and logistics, the purview of the CSCO. But they extend throughout the enterprise, placing the CSCO in a position to influence the skillset of the organization overall.
Fundamental drivers such as individualized products and customer-centricity are upending the traditional supply chains. They’re doing the same to the executive suite. A CSCO who knows how to respond can transform not just your supply and demand networks, but your entire company and its competitive position in the marketplace.
For more insight on how digitalization will affect your organization’s business strategies, read the research report by SAP “Digitizing the Extended Supply Chain: How to Survive and Thrive in Today’s Digital Economy” to learn how to be a leader in this digital economy.