Gartner: CSCOs Must Increase Value to Retain Influence

Chief Supply Chain Officers (CSCOs) must expand their focus beyond cost management or accept a relegated role within the enterprise.

That’s according to the opening keynote that was delivered by Tom Enright at Gartner Supply Chain Symposium/Xpo, taking place in Orlando, Florida this week. 

The VP Analyst in Gartner’s Supply Chain practice said that, in order to retain influence and control of their strategic objectives, CSCOs must focus on initiatives that deliver multiple sources of value and align with their CEOs’ growth agendas.

“Stakeholders perceive that the worst of the supply chain crisis has receded and CSCOs now face the prospect of being allocated fewer resources with the expectation of returning to a role more confined within the enterprise,” explained Tom. 

“CSCOs’ own priorities centred on cost management may be contributing to a loss of influence, as their CEOs remain steadfastly focused this year on driving growth.”

Pressure on CSCOs to deliver multi-value contributions

For the supply chain function to retain influence in a ‘post-crisis’ state, Gartner says CSCOs must deliver multi-value contributions where investments create maximum impact across key priorities that include growth, resilience, sustainability, risk reduction and more, while also addressing cost.

To accomplish this, Enright outlined a three-part framework for CSCOs to follow:

Define focus areas and limits

CSCOs must chart a course between a narrow focus on cost reduction and a “do-it-all” approach that is doomed to fail as resources dwindle and employee fatigue mounts from years of disruptions. 

Expectations should be set for each commercial segment, product group and physical network on where the team will focus on adding value and areas that will be intentionally de-emphasised.

“Being able to confidently define what a CSCO will say ‘no’ to is equally as important as stating their priorities for each team,” said Enright. 

“This can only be done confidently after clarifying the risks and gaining internal and external buy-in. Once accomplished, this provides a clear basis for allocating resources in line with carefully considered principles.”

Build a multi-role supply chain organisation

A focus on delivering multiple sources of value requires a rethink of organisational roles to support this objective. Previously, organisational design revolved around the concepts of centralisation or decentralisation, a framework that lacked nuance. 

Instead, Gartner recommends organisations consider which activities need to be integrated at the enterprise level and which should be differentiated at the business unit or segment level – both for operational and design activities.

“Expanding the number of organisational approaches allows a greater level of flexibility in delivering multiple sources of value simultaneously,” added Enright. “It also allows the agility to change over time as business needs evolve.”

Identify and deliver multi-value plays

Rather than focusing solely on cost reductions, CSCOs should instead identify the investments that allow them to achieve multiple objectives within one initiative. 

Enright noted that many organisations are finding synergies with initiatives that combine sustainability and cost objectives, while others are investing in new technologies to improve customer experience, enhance their employee value proposition and drive growth.

“While the supply chain function is most often delegated cost management responsibilities, it is indispensable for delivering other important forms of value,” said Enright. 

“It’s up to supply chain leaders to identify and prioritise those investments that will deliver simultaneous sources of value, in line with their team’s strengths and stated priorities.”

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