Internal consultants

standstill in S&OP

Which strategic choices does a company face? This question was covered in depth during a recent – and extremely interesting – workshop for supply chain managers and directors at Nyenrode. Just a couple of the 40 participating executives had a say in their corporate strategy. The rest viewed the supply chain strategy and its execution as being derived from the strategy decided at the top.

The workshop strengthened my belief that many companies and their managers/directors confuse the company mission and vision with the strategy. To use a military analogy, the vision is an appealing hill that a company wants to conquer (the mission). The company’s method for conquering the hill, either in an outflanking manoeuvre or a frontal attack, is the strategy.

Supply chain directors who have a say in the corporate strategy are often employed by companies with relatively mature supply chains, where the walls between the departments (silos) of Purchasing, Production and Logistics have been demolished, where the monthly Sales & Operations Planning (S&OP) decision-making process provides the framework for internal alignment with sales/marketing, and where periodic portfolio optimization ensures external alignment with strategic customers. In the two most advanced stages of supply chain maturity, the company collaborates with strategic customers and suppliers or even orchestrates the complete end-to-end supply chain of raw materials, right through to the purchase and use of the end products.

In each of the various states of maturity, the supply chain manager or director has to act as an internal consultant. This role can actually be described as a technical business manager, because he or she is the only person with operational responsibility for the business processes to have extensive contact with the other departments: Marketing, Sales, Finance, R&D, IT and HR.

Unsolicited advice

When I heard this discussion at Nyenrode, it made me think of something Erik Brouwer, former supply chain director for West-Europe at Perfetti Van Melle and winner of our Supply Chain Professional Award, once said. When he was asked how to develop strategic collaboration with customers, he replied “By regularly giving unsolicited advice”. Supply chain managers should make more frequent use of simple management models to provide their board of directors with unsolicited advice.

Martijn Lofvers, Chief Trendwatcher Supply Chain Media
martijn.lofvers@supplychainmedia.nl