Purchasing And Logistics Alignment Challenge

Apply the “Seven Actions a Supply Chain Leader Can Take Today” as outlined in Ch. 5 (page 119) to better align purchasing and logistics as a strategic advantage.

Explain each step and how they will make a difference in closing the gap between purchasing and logistics.

Champion an end-to-end and integrated supply chain organization.


Seven Actions a Supply Chain Leader Can Take Today

The value of the research, best practices, and examples is determined by how they can change your supply chain leadership. Following is a list of potential actions you could take today to make a difference in your organization and business results.

1. Get it on business leader scorecards. Work with your general managers/business leaders to ensure holistic measures are on the business/general manager scorecards. Profit and cost are consistently on these high-level scorecards, but quality, cash, and customer service may not be. Including supply chain excellence measures on the business scorecard enables you to lead based on business priorities.

2. Champion TVO. It is not enough to talk about the use of total value of ownership with your direct reports. Talk the importance of total value with supplier selection and development as part of your communications (meetings, calls, printed documents, supply chain goals/action plans), participate in supplier selection and development reviews for the most strategic suppliers/materials, and ensure that the rewards for supply chain people are consistent with TVO.

3. Make R&D your best friend. Create a strong partnership with the research and development leader. Consider co-locating your office with the R&D leader to facilitate teamwork and symbolize a seamless technical community. The SC leader and the R&D leader should have common expectations, including active, up-front involvement in new initiative supplier decisions and product design to optimize innovation that delivers consumer, customer, supplier, community, and shareholder needs.

4. Be clear. Set clear expectations for use of multidiscipline teams on supplier selection. Ensure people know what process is expected for what type of suppliers. Do this publicly and in written communications. Enable your multidiscipline teams to do the work. Help your global virtual teams get the tools they need to succeed.

5. Champion an end-to-end and integrated supply chain organization. If your supply chain team is not end-to-end and fully integrated, create a plan to make this happen. This is not easy or straightforward leadership work in many companies. Barriers to creating your supply chain organizational vision include commercial business leaders who have other ideas, existing acquisition agreements (including personal contacts), and historical systems. Stay committed to achieving the vision, and make progress with every organizational opportunity.

Align on a common direction. If the purchasing and logistics teams have different leadership, partner with these leaders to ensure both organizations have a common supplier direction, scorecards, and rewards. This alignment can precede more complex organizational structure changes and deliver immediate business improvement. This type of clear organizational direction creates more leadership work, because the two leaders must speak with a common voice. But the investment with your partner to create this common voice will reward both of you with better decision making (until the structural change is made).

6. Build talent focused on the end-to-end supply chain. Create a principle for strong end-to-end supply chain skill requirements for leadership positions in each supply chain discipline. Today’s business challenges require supply chain leaders who can build strong “links” in the supply systems and resolve integration problems. Disciplined leaders who have demonstrated successful results in multiple disciplines will strengthen the capability of the total supply chain leadership team.

7. Partner with finance. Work with finance leadership to align on how your multidiscipline teams quantify quality, customer service, environmental, sustainability, delivery, inventory, and the like. A primary leadership role is enabling the organization with clear expectations and aligned measures. Delegation of this leadership work “freezes” most teams. Create a starting point on how to value, learn, and adjust.