Sunday 2 July 2017

Drivers of future profitability growth

What’s the driving wind that will keep our corporate ship on course?

Yes, we know it’s skills, but what skills? How can we be sure that we’re training for future success?

What the market says and what academia thinks

Recent wanted ads in the Supply Chain Management field look for very specific skills:
  •      Development of monthly tactical, budget and forecast process;
  •       Manage importation processes;
  •       Manage interfaces between vertical operations (logistics, procurement, quality, plants and suppliers);
  •       Pursue opportunities around storage, transport and stocks in order to optimise for lowest landed cost;
  •       Develop and implement policies, processes and procedures around supply chain strategies
  •       Plan, purchase and distribute up to 2000 inventory items.

When looking at the academic curriculum intended to make those responsible competent to carry out these functions, the terminology shows some scary differences:
  •      Describe the evolution of the current distribution system;
  •      Reason out why organisations hold inventory;
  •       Provide a broader perspective on supply-chain management and logistics management;
  •       Define supplier relationship management;
  •       Illustrate and explain the role of purchasing and supply management in acquiring transportation.

Whilst these differences clearly illustrate why it is that university graduates don’t get jobs, what is perhaps more interesting from both sets of statements is that neither address what a survey such as Barloworld Logistics’ supplychainforesight identifies as key Strategic Supply Chain Objectives over the next 5 – 10 years:
  •      Improving service levels to customers.
  •       Improving visibility in the supply chain.
  •      Integration of technology.
  •      Lowering procurement costs & reducing order lead times.
  •      Improving the flow of business intelligence.
  •      Reducing the environmental impact of supply chain operations.

What is also very concerning is the lack of real future focus in all of these. In today’s disruptive world this is a costly omission.

Famous brands of US made horse drawn carriages were Weber, Columbus, Steel King and Buckeye- you don’t see those names in today’s automobile industry but also seems unlikely that Ford, Fiat or Ferrari will be the leading manufacturers of the autonomous vehicles of the future.

So, what’s to be done?

The future focussed company

It all starts with the company vision: By defining what value it adds to its customers, not what it does, the company vision can carry it into the future.

Living the vision: The current employment environment precludes lifelong tenure or anything like it, so how will people be driven by a future focused vision when there’s no chance that they’ll be around to see it realised? The answer to this lies in the current benefits to be gained from being part of a future focused organisation: after all, who wouldn’t want to work for Apple, Google or Tesla?

Disruption comes from the ability to accelerate speed-of-execution and the agility to seize new opportunities. People who innovate are, by definition, entrepreneurs who thrive in an unstructured environment. However, to sustain innovation, scalability is needed, which in turn requires accountability, reliability, and predictability, which cannot be achieved through an unstructured innovation network.

This leads to the conclusion that, in order to compete in a disruptive world, the company needs both strong entrepreneurial and structured cultures to co-exist.  

The nature of Supply Chain Management in such that, because of rapid developments in technology, success is anchored in the ability to create and embrace innovation whilst at the same time carrying out current day functions in compliance with to highly structured and regulated procedures.

Clearly, completely different skills sets are required to carry a Supply Chain Management into the future. We will be exploring how these can be imparted and acquired in future articles.

What steps does your company need to be able to thrive in the future?

How is your company training for future success?


Is it possible to have a dual culture company – one highly compliant?