The Board-Executive Imperative: Involving Boards and Senior Executives in Supply Chains

The Board-Executive Imperative: Involving Boards and Senior Executives in Supply Chains

Usman A. Ghani (University of Texas – Dallas, USA & ConfluentC, USA)
DOI: 10.4018/978-1-4666-8228-3.ch001

Abstract

This chapter provides a fresh outlook for supply chain optimization by advocating the involvement of boards and top-teams that are uniquely positioned to address a confluence of three strategic responsibilities of a firm: scope and significance; people and culture; and measures and metrics. It provides a holistic corporate context and grapples with tougher issues often deferred or stalled as other initiatives or crises grab corporate attention. This chapter introduces his frameworks and guidelines and selective examples of success and failure in implementation. This chapter assigns primary responsibility for supply chain strategy senior executives. It observes these areas as gradually becoming too operationalized, even commoditized, with local efficiencies emphasized at the cost of gradual overall ineffectiveness. It also dispels six myths that have taken root over time, highlighting their impact and substituting these with today's realities. To make this work more practical, this chapter shares first-hand examples of supply chain practices.
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Introduction

One may wonder: One’s impression from articles and speeches is that boards of directors and senior executives are involved in their firm’s supply chains. So why the lapse?

As you will see in the author’s observations, examples and suggested frameworks that follow, there is a significant chasm between rhetoric v. reality. On the positive side we will cite a few futuristic firms seeking confluence and we will propose approaches that any firm’s board of directors and senior executives can apply with confidence to achieve the next level in their supply chain.

Supply chains are often perceived to be operational activities that tackle repetitive processes that spread out and share routines. Operational managers have outdone themselves to ensure that these activities run efficiently. They have also established supply chain organizations with defined roles and responsibilities to encompass a wider domain. Supply chain managers in turn have kept up with advances in this (relatively new) field and have upheld many best practices. This is laudable, particularly given the limited budgets and intense pressure for performance. However, boards of directors and senior executives – when they involve themselves strategically – can foster more efficient supply chains and advance futuristic organizational growth.

As the supply chain field has matured to its present state, it has engendered an unanticipated effect: A chasm between supply chains and firm’s boards of directors and senior executives. Some of this was natural; specialized supply chain techniques and technologies that emerged assiduously, and rightly, became the domain of the field. However, strategic considerations for supply chains—scope, people and assessment dynamics—also got subsumed in supply chains management. This has resulted in distance and disengagement by boards of directors and senior executives. Thus, the supply chain excitement of yesteryears has also subsided akin to management hype cycles. Such “adopting, then abandoning” of innovations by management is briefed in a recent article by Birkinshaw of LBS (Birkinshaw, 2014).

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