Dive Brief:
- Enterprise strategies, new key performance indicators (KPIs) and the end of silos were the key topics covered during a recently assembled panel of supply chain executives hosted by Ambrosetti, a European think tank and fashion consultancy, Sourcing Journal reported.
- During the first round of talks, the need for supply chain officers to make a greater contribution to the company was discussed. Also, the relationship between business strategy and supply chain strategy was highlighted.
- The necessity for supply chain managers to have a seat at the strategy table has arrived so that a more central role in the company, which will eventually involve quality management, particularly in relation to supply-demand planning.
Dive Insight:
According to a poll created by Ambrosetti regarding the areas most in need of greater supply chain participation, technical product development was considered the most important factor that companies need to embrace, while product costing and demand planning vied for second place in priority. Feasibility analysis, production planning, and negotiation placed third.
None of this should come as any surprise to Chief Procurement Officers, who offer significant value to companies. In fact, a study by the IBM Institute of Business Value (IBV) reveals that a strong procurement department can improve a company's profit margin by more than 7%, while extremely efficient procurement departments can extend that number by 15% or more.
Progressive efficiency, however, will come only with a seat at the management table. Recognition of supply chain and procurement contributions require acknowledgement and authority, which is gained through the force of an executive level position. In other words, to see effective change, empowerment of the personnel able to effect it must occur.
