Leadership Skills for Improved Supply Chain

Few things are more difficult than leading groups over which you have no authority. Yet that’s where manufacturing executives find themselves in trying to improve supply chains. Contracts may stipulate requirements, but often fail to hold suppliers accountable. Combine confused supply-chain responsibilities with the impacts of pandemic, economic, and geopolitical issues, and you’ve got a recipe for industrial disaster. It doesn’t have to be this way. 

Supply Chain Management Skills

Effective leadership can transform disjointed supply chains into high-performance collaboratives that deliver higher profits for all participants while delivering superior value to customers. How? By combining technical, supply chain, and human resource skills into a seamless improvement machine.

Technical Skills

Supply-chain leadership requires human “hardware” components to map a supply chain— e.g., how to leverage real-time operations and supply-chain data, deploy technology solutions, apply improvement principles, and navigate the effects of economic forces on the supply chain.

Leverage supply chain data
Supply chain information is critical to a leader’s awareness of how well a supply chain is functioning. Even when problems (backorders, delays, poor quality) arise upstream, actions must be taken to minimize damage to operations and customer satisfaction. Regular audits of primary suppliers can ensure that systems are in place to keep information flowing even when goods are stalled.

Deploy technologies
Enterprise resource planning (ERP) and/or supply chain management (SCM) systems are a must for supplier networks that stretch around the globe. These tools digitize the flow of goods and materials, allowing executives to direct procurement processes or order fulfilment; manage the movement of goods, information, and capital; and review traceability for regulatory requirements.

Apply improvement methodologies
Supply chain leaders will apply improvement principles to eliminate constraints to the flow of goods and information (e.g., waste elimination); create a pull-based flow of goods to minimize the loss of capital and resources (e.g., value-stream mapping, kanban); and prevent defects from recurring (e.g., andon, poka yoke). Knowing how and when to use lean tools can deliver benefits — such as reduction to order processing times — that fund ongoing improvements across the supply chain.

Navigate the effects of economic and market forces
Supply chain leaders must remain aware of broader industry dynamics to ensure that cost structures are appropriate while ensuring they have enough products to meet demand. This requires detailed intelligence on end-to-end supply chain costs — shipping, storage, duties, taxes, commissions, etc.

Supply Chain Skills

Technical skills alone can’t engage employees, foster collaboration among supply-chain partners, or transform an organization and its supply chain. The ability to develop strategies and goals and manage complex projects are critical in creating a culture of continuous supply chain improvement.

Develop supply-chain strategies and goals
All the information gathered on the technical side of leadership — performance metrics, market and finance data, goods and services costs — inform a vision for the supply chain, but more is required. Leaders must engage stakeholders (employees, customers, suppliers) for ideas and consider outside-the-box targets and the means to achieve them. Leaders then communicate the visions and goals in ways that others throughout the supply chain can align their individual goals and actions to that of the entire supply chain.

Manage complex projects 
Daily improvements by frontline associates are critical for supply-chain excellence, but the problems they encounter often require a dedicated improvement project with cross-functional representation (procurement, production, customers, suppliers, logistics). Supply chain leaders oversee these initiatives with project management best practices.

Supply Chain Improvement Best Practices

1. Define the problem: Leaders seek agreement among the project team on the precise nature of a problem; solicit ideas to solve it; and then prioritize improvement ideas.
2. Plan and scope: With the leader’s guidance, the team identifies SMART (Specific, Measurable, Achievable, Realistic, and Timely) objectives that define success or failure. The team also assigns team roles (project leader, project sponsor), specifies required processes and technologies, and determines deadlines.
3. Execute the plan: The team applies and standardizes process changes, with leader support to overcome obstacles. (Standards make improvement repeatable and scalable.) The team also incorporates visual management to allow for rapid identification of problems during execution.
4. Review progress: At predetermined milestones, the leader reviews progress with the project team, those working in the process, and other stakeholders: Are the changes working? If not, why? Was the solution flawed or poorly implemented?
5. Sustain improvements: The solution should incorporate metrics and visual management to ensure on a daily basis — without the leader’s intervention — that improvements are sustained.

Human Resource Skills

Leaders must also develop their team’s human resource skills to enhance abilities to communicate, solve problems, manage day-to-day interactions and model appropriate behaviors: e.g., leading meetings, settling disputes, and providing and receiving feedback. 

Coach, mentor, and motivate
All executives, managers, and frontline staff need to know what’s expected of them — and why. Leaders work with staff to define goals and give employees the authority to act on their own while holding them accountable. Leaders meet regularly with key colleagues and intervene as necessary, asking questions to ascertain progress or surface problems, and then offering assistance.

Build a problem-solving culture
Leaders view those working in the supply chain as the chief problem-solvers. To do so, leaders engage managers and frontline associates to identify problems; educate them on how to solve problems; and then empower them to act before problems escalate. Leaders also establish systems to share solutions across the organization, as well as developing a “help chain” in which associates know whom to rely on for assistance. 

Guiding Supply Chain Leaders

Performance Solutions by Milliken (PSbyM) helps clients to develop lean, agile supply chains that withstand disruptions, deliver operational excellence, and increase revenues and profits. PSbyM practitioners have unlocked capacity in supply chains across a range of industries — consumer goods, pharmaceuticals, food and beverage, plastics and rubber — and improved end-to-end supply-chain productivity, inventory management, customer satisfaction, and cash-to-cash cycles. 

Supply chain improvements start with leadership. The technical and human resource skills needed by supply chain leaders aren’t packaged with a college degree or acquired quickly on the job. Like the employees they lead, leaders need to be engaged, educated, and empowered to develop these skills and then given opportunities and support to gain experience in using them. PSbyM has helped develop hundreds of supply chain leaders. Partner with PSbyM today to establish the leadership capabilities needed to improve your supply chain.