Becoming an End-to-End Integrated Supply Chain

Leading supply chains is a complex interconnected business as supply chain culture has always been highly focused on efficiency, cost reduction, inventory management, and metrics such as on-time-in-full. Many organizations have even dictated certain percentages of annual cost reduction for operations as a central strategy but finding ways to cut costs without sending product quality into a noticeable decline takes vigilance and creativity. Efficiencies, when found, are often claimed and repurposed for other organizational initiatives, rather than remaining within the supply chain for investment and experimentation. The ability to collaborate with the leaders of other organizational functions to explore ways of integrating is limited. Problems occur and fires have to be put out within your own immediate operations. A head of supply chain for a global pharmaceutical firm was asked in a research interview, “If you could change one thing about your supply chain associates’ mindsets, so that if they came in tomorrow and thought about their operations differently, what would it be?” Upon reflection to this seemingly simple question, similar to “Who are your customers?”, the Pharmaceutical supply chain executive’s answer was that his firm’s associates would understand the end-to-end upstream and downstream impacts of their own actions. He went on to elaborate that the current mindset was very focused on “firefighting” problems within the associate’s immediate function, even when the problems they were solving were created by upstream actions from other parts of the organization. What the executive described is the leadership behavior of taking a step back to consider why the current issue was created, irrespective of where in the supply chain it may originate, and to take the courageous step of crossing a functional threshold to address problems at their source. Other firms have described the challenge as a business growth issue. For example, a global beverage manufacturer had set the ambitious goal of doubling the size of its business in 10 years. Supply chain leaders were tasked with supporting this level of business growth without a corresponding doubling of supply chain cost. In both examples, better end-to-end integration and collaboration were critical in meeting the business goals of the firm. The key to unlocking this more integrated and enterprise way of working might be called a supply chain leadership mindset, a set of new organizational behaviors that make digital supply chain transformation possible.

The Need for Organizational Learning of Integrator Behaviors

There are critical behaviors needed to facilitate the scaling of digital and supply chain performance transformations. Firms must approach developing the behaviors as an organizational learning challenge requiring intervention (Argyris & Schon, 1978). In our beverage manufacturer example, the firm identified a key set of behavioral enablers allowing for a faster and more impactful deployment of the new systems. The underlying driver of this is that employees should feel empowered and encouraged to act on behalf of the end-to-end organization, rather than acting narrowly within self-interest-driven individual metrics. To realize this goal associates need to develop trust in the alignment of segment plans with the holistic goals of the firm; a belief in the benefits of collaboration and a mindset that allows for functional boundary-spanning behavior.

People Are the Key to Navigating Supply Chain Digital Disruption

Key Dimensions of Digital Supply Chain People Performance

High-performing firms recognize that leadership behaviors are critical to unlocking more integrated supply chain performance. Employee attitudes, beliefs, and actions are magnified under a more digitally integrated supply chain. This next section will outline the key digital supply chain leadership attributes that drive performance.

The Digital Supply Chain Leader

The leadership development profession is not light on theories, concepts, and methods. Collaboration as a strategic objective, for instance, may feel to many as a tired act. The question digital supply chain leaders need to ask is how they can promote meaningful, disciplined collaboration amongst employees. Productive, focused, and disciplined collaboration is a key behavior that allows for more integrated performance improvements across functions and disciplines (Hansen, 2009).

Organizational-Level Strategies and Measures

Supply Chain leaders should look closely ar the following areas and evaluate where new demands have surfaced due to digital transformation (Kurz, 2018).

1. Ensure that performance and compensation metrics are aligned or shared within the supply chain (Plan Source, Make, Deliver), as well as cross-functionally with marketing, sales, product development, and finance.

a. The digital supply chain is highly integrated. Therefore, the talent management practices of the leading firms must reflect this by minimizing information and practice silos.

b. Recognize that associates in the supply chain cannot visualize all possible benefits of integration and collaboration by themselves. Interventions must be developed to overcome this limitation and the barriers to transparency (Ramanathan et al., 2011).

2. Ensure that supply chain leadership promotes alignment of its own digital strategies with overall corporate strategies.

a. In the digital supply chain, strategies must align with and serve organizational strategy. New, digitally enhanced business models must surface and be developed in concert with supply chain leaders.

b. Supply chain leaders must be able to interact in peer-to-peer relationships with a range of senior organizational leaders from all functions.

Individual Attitudes, Beliefs, and Behaviors

In addition to organizational-level leadership characteristics, developing an integrated digital supply chain places demands on a higher level of individual and networked performance. Networked performance is the ability of individuals to raise the performance levels of those around them in the organization. To achieve the objective of greater integration, leaders should be concerned with developing: leadership mindset as an attitude, integrator behaviors, mutual gains approach capabilities, and data-driven problem-solving capabilities.

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