I interviewed Kees Van Der Vleuten who discussed Leadership and Governance Impacting Supply Chain.
Can you first provide a brief background of yourself?
Yes. I've been working more than 25 years in supply chain and procurement in a variety of industries, mostly related to complex industries. I have an educational background which was also in logistics and procurement, and I've been working with and for some of the most valuable companies around the world. And I have a pretty good understanding of where we're heading in supply chain management in the world.
Can you talk about what is leadership and governance pertaining to supply chain?
The last 3-4 years, I have been active in supply chain management and procurement as Chief Procurement and Supply Chain Officer . And I've also followed a study on corporate governance at Insead Business School. It's striking to me... There's a big connection between the internal governance and the external governance of a company. Did some investigation for an aerospace and defense company, and I found that the way you lead a company is directly influenced on the way you lead supply chain and vice-versa.
To my knowledge and understanding, I think supply chain is definitely a board topic. And the impact on bringing added value, not only to your customers but also to your suppliers, or from suppliers to yourself and managing the value chains within your company is quite a stringent topic.
And I believe organizing your supply chain organization and your structures in the company is part of the total governance of an organization.
How is it done effectively?
It differs a bit on the size and type of company and the industry you're in. I've seen great examples. For example, Vodafone or Unilever or even Apple, who have taken supply chain to board level and making sure that added value comes from the supply chain function to the changing business models and the structures these companies are working on, especially when innovation and new product introduction as well as engineering is part of the game. A good example, of course, is Apple, who launches new iPhones and iPads. It has all the impact on having the right governance, the right structure in your company and making sure you fulfill the demand of the customer eventually.
Where have you seen some success?
It's pretty much depending on the company you're looking for. It's small pockets. Sometimes it's big. I've seen good examples at Inditex where Zara, the supply chain in fashion, is well organized at making sure collections are renewed every moment in time with a strong supply chain backup behind it.
You can also seen good examples in Philips, where I work myself, where now innovation and engineering is part of the game. But even in the past, Lucent, I remember in the electronics industry, has made a significant diversion in its supply chain by having a strict central governance and control of the supply chain management.
So, it's pretty much spread around. If you follow, for example, Gartner's Top 25, you will find the top companies moving on in supply chain management. I have also seen in another example in aerospace and defense, where I also have worked myself, great examples of value sourcing, including suppliers in the development and innovation of your components, and making sure you deliver on time, and making sure you add value to an aerospace customer.
If you look around the world, you will find them. If you dig in deeper, then the question is of course, how is the governance, the structure, the reporting lines, the mandates, how it is organized. And that can differ per company.
Do you have any final recommendations regarding leadership and governance impacting the supply chain?
In 2015, I wrote a nice article on leadership and procurement, which can also be applied to leadership in supply chain management. I myself have personally gone not a straightforward route. And I don't believe careers are straightforward. My first indication is to look beyond the boundaries of supply chain. Although being 25 years in supply chain, my interest always goes into other domains like finance, sales and marketing, engineering and innovation. I myself worked also in these environments through my 25 years.
So, look beyond the boundaries. That broadens your scope to actually set a better governance in the company on supply chain management. But also work in a diversity of industries. So, move around once in a while, because you get new insights. After my 20 years at Philips, I've seen other great examples in oil and gas, in the paper industry, in the fulfillment industry, where I said if I had known that at the time I was within the company, you could have contributed to maybe much better in supply chain and procurement.
And of course, personal development and curiosity by understanding how the dynamics within the company, but also between stakeholders outside the company works is, of course, one of the most important characteristics of a supply chain leader nowadays.
So, I believe if you want to build a good governance, then take away one of a few of these learning points and make sure you interact with the board, with the shareholders, with the board of directors, and even with your outside stakeholders like customers and supplies. And I think it's vital for companies to look at what I would call the value chain, which is a combination of procurement, supply chain, and all other stuff around it. Because eventually, when you launch new products or you want to bring in new innovations, it's not thinking in silos anymore. It's understanding the other side of the fence as well.
Eventually, you want to create value to the company from our supply chain perspective, as well as create a strong brand reputation. And I think supply chain can contribute to that.
Thank you for sharing today.
About Kees Van Der Vleuten
Kees Van Der Vleuten
Managing Director-VP Procurement & Supply Chain/ICT