What are the elements that define a supply chain leader? Steve Banker takes a unique approach to answering this question. He goes through a series of scenarios where leaders would like to improve service but cannot due to a lack of corporate support.
Reaching for That Brass Ring
Just the manufacturing and logistics costs of adding a stock keeping unit (SKU) can be very costly—over $100,000 at one consumer durables company. SKUs should be removed almost as often as they are added, but this is often not possible because the sales team would have a fit. Multi-echelon inventory optimization via the likes of JDA and Oracle can help cut inventory without affecting service, but the problem here is that its implementation often starts with an inventory write-off. CEOs would rather make the numbers look good for the end of the quarter than shoot for the more-profitable-in-the-long-term alternative.
These two examples, as well as two more in the full article, are intended to illustrate how important it is for supply chain leaders to be “financially literate” and be able to convey their concerns to the CEO and CFO. They also must be patient and diplomatic. These qualities together make for a highly capable supply chain leader. You can read the full article here: http://logisticsviewpoints.com/2015/01/12/the-key-attributes-of-supply-chain-leadership/