A few weeks into the first lockdown my phone was ringing regularly with reporters wanting to understand supply chains. While that has quietened down now, I am cautiously optimistic that Covid-19 has helped businesses recognise Supply Chain as a critically important function within their organisation and to have helped them realise the importance of having a supply chain strategy and an explicit recognition of the need to carefully think through supply chain risks and mitigation, recovery, or avoidance strategies for those risks.
Supply chains don’t run themselves, yet there is often a perception that supply chain management is a technical discipline left to technical specialists who should be left alone to just get on with it. Worse, some companies seem to think that the right IT system will take care of all supply chain decisions. This is not the case. This is where the discipline of supply chain management can help. There is a large body of knowledge that can help firm make the right strategic decisions for their supply chains.
The Chief Supply Chain Officer (CSCO) is rare as hens’ teeth here in NZ, yet not an uncommon position overseas. A recent international Indago survey showed that 21% of members reported that their organisation has a CSCO and an additional 38% of respondents said that they have a C-suite executive with comparable responsibilities, meaning that Supply Chain has a seat at the executive table in a majority of surveyed organisations. It would be interesting to see this survey replicated in NZ, but I suspect the numbers would be grim.
There is also a dearth of operations and supply chain expertise on NZ boards. Recent reports and news articles have highlighted the need for a much greater diversity of expertise on NZ boards and I would encourage boards to think about supply chain expertise as some of that diversity. Covid-19 will have helped many boards recognise gaps in their own expertise.
Many NZ companies have the supply chain function reporting through to the CFO, which often sets up the wrong dynamics. A supply chain is not a cost centre. It is a strategic asset, which a successful firm will be able to leverage to create value. Covid-19 has made many firms recognise the lack of visibility they have into their supply chains and work to alter this. Supply chain theory emphasises that diversification (in both supply and demand) is an important risk mitigation strategy. This virus has illustrated that concept in spades.
Am I being overly optimistic that Covid-19 has made a permanent change in our supply chain thinking? Perhaps. But as supply chains continue to get more complex, as customers get more demanding of the right product at the right price at the right time, and as global risks continue to rise, sensible firms will recognise that a change in their supply chain thinking is just what the virus ordered.
From 2022, the University of Auckland Business School will offer a Master of Supply Chain Management (MSCM) degree to educate those interested in the latest supply chain thinking. MSCM graduates will be ready, willing, and able to take on a CSCO role or other senior SCM roles in New Zealand and global organisations. We also offer a shorter non-degree strategic supply chain management executive programme through our Executive Education ‘C-suite’ programmes for those who do not have time to undertake a full degree. And of course our Bachelor of Commerce Operations and Supply Chain Management graduates are very much in demand. Overall, we seek to elevate the practice of, and expertise in supply chain management in New Zealand and beyond.
Find out more:
Master of Supply Chain Management (available from 2022)
Strategic Supply Chain Management Programme (apply now for May 2021 start)