Responsibility and follow-through are key for supply chain executives in 2004

Frontline Solutions, Feb, 2004

"In a lot of companies there is still no one responsible [for the supply chain]," says Scott Elliff, president of Capital Consulting and Management Inc. in Alexandria, Va. So Elliff has developed his Supply Chain Executive Agenda for 2004.

Executive ownership and responsibility is at the heart of several agenda items. Agenda item number 2, for example, "Accelerate supply chain actions and decision-making," requires executives to understand and eliminate bottlenecks, according to the agenda document. This item clearly requires executive involvement, as does the item concerning incentives and metrics: "Companies must establish incentive programs that drive people to pursue improvements," Capital says.

One weakness that Elliff sees in those companies that have put someone in charge of the supply chain is that the designee becomes "an integrator; a special projects guy," with few if any direct reports. The traditional functional organization of most companies makes the job of a supply chain executive especially challenging because it's an inherently cross-functional role that needs to pull people out of their individual silos and see a bigger picture.

"I don't think anyone's figured out the right balance between function-by-function jobs (in purchasing, manufacturing, distribution and so forth) versus the responsibilities that should be vested in a supply chain organization," says Elliff.

Concerning the much-touted ROI, Elliff says that supply chain systems "have promised tremendous payback. But people haven't challenged the ROI calculations of suppliers, and after a system is adopted they don't follow through to make sure the system is used. There is hardly ever a post-audit of ROI."

Three things have to happen in a successful supply chain technology implementation, according to Elliff:

* Challenge vendor assumptions, particularly ROI assumptions.

* Design and execute a superior implementation program, including a top-down sense of urgency and in-trenches training.

* Do a post-implementation audit.