I interviewed Patrick Gilis who discussed Positioning Of The Supply Chain Functions In Large Groups.
It’s nice to speak with you today, Patrick. Today your topic is positioning of the supply chain functions in large groups. Can you start by providing a brief background of yourself?
I would mainly describe myself as a supply chain passionate person. I’ve worked in that area for the past ten years now. I’ve gained experience both from the consulting and the industry area, where I did half of my career in each of these two areas.
Can you explain what you mean by positioning of the supply chain functions in large groups?
This is quite a usual topic that we see both at client sites and also as a question that is raised by students. They often ask how the supply chain function should be positioned within the organization. There are a couple of key challenges there, and I would mainly want to focus on the main areas, which are the vertical and horizontal positioning within the organization. This is important to see supply chain as not just one box to fit in there like it would maybe be for finance or accounting.
The vertical positioning represents how high are people in the hierarchy (responsibility level) and the horizontal positioning represents which core function the Supply Chain professionals talk to within the organization. If we look at the vertical positioning in terms of responsibility, the supply chain function shall not be perceived as someone who’s just sending instructions. This is not the person that must absolutely have the responsibility of the entire operations (those are more director or the COO related). The supply chain professional needs to be perceived as a strong/key influencer within the company; that’s the person seen as someone who’s willing to reach global objective instead of achieving local targets for a specific department. Some threats are that the supply chain leader within the company has to deliver both highly practical, factual resources for every function and still be able to be good, maintain productive relationships across the organization.
The horizontal positioning within the organization is also very important. The Supply Chain leader needs to be positioned as a trustful influencer. That is why, within the organization, we have seen various perceptions of the supply chain function. Some see the supply chain function as a more IT-related function, ERP software, when others see it as a function related more to procurement. My personal understanding is that the supply chain professional understands the key challenges and basics of the entire operations within the company, its related functions, and make them work as one to reach a global optimum. That is what I mean by positioning of supply chain function in large groups.
Why is it important?
That is pretty straightforward. The positioning of that function makes it either possible to achieve the expected result and performance. Not positioning the supply chain manager in a correct way, both vertically and horizontally will lead them to act in act in a limited scope and eventually create frustrations within the organization with the concerned colleagues. Let’s just say the supply chain function would be remitted to a highly procurement-related function. In this case this becomes unclear where the responsibilities are between the procurement function and the supply chain function. This positioning will either make it possible for this function to achieve the expected results one can expect from this function.
How is this done effectively?
Companies’ HR dpts. Must first have an in-depht understanding of their business and how existing positions are being fulfilled. The organization, and the challenges that will be met by the supply chain function are important. Depending on your area of business, the supply chain function will not need to work on all aspects with the same intensity, so this is pretty important to know what you can expect from the supply chain function. Second is that it is important to share the concept of supply chain within the organization, and it is also important to be clear about the objectives of that function. The supply chain person is not a cost-cutter nor an auditor, and neither anyone within the organization should be afraid of. It should more be considered as a helping hand within the organization. Last but not least is that there needs to be a clear commitment from top management for supporting supply chain function.
Thank you, Patrick, for sharing your views today.
Thanks for inviting me.
About Patrick Gilis
Senior Manager Procurement & Supply Chain @ KPMG