Companies Need Board Directors With Supply Chain Expertise

Does that mean every company must have some directors with supply chain mastery?

Which Companies Need Board Directors With Supply Chain Expertise?

While writing the book THE 5-STAR BUSINESS NETWORK, our team analysed the annual performance and boards of the top 1200 companies in the world over long term – a period of 5 years. The full details of the study are given here.

One of the facts that was amply proven from this study was that the above question is rarely asked at the board level, or at higher levels. Those who frequently examine the composition of boards to assure diversity and governance rarely try to match the skill sets with the type of business the board is meant to govern. 

Cover-quick-notes-on-supply-chain-Mastery.png

Most Boards Lack Supply Chain Expertise

When we present at APEC Business Advisory Council, or similar intergovernmental bodies that deliberate on corporate governance issues, it is clear that company boards continue to grapple with a number of issues that they are not equipped to deal with. Supply Chain is one of those issues. Sadly, most boards are deficient in one skill that they need more than any other in this post-COVID 19 era. 

Does that mean every company must have some directors with supply chain mastery?

Clearly, there will be some companies that do not. So, let us first answer a simpler and much easier question – which boards do not need directors with supply chain expertise? 

supply chain 4.0

Not All Boards Need Supply Chain Expertise

If the company’s business is primarily in finance, insurance or real estate (FIRE businesses) – the management of supply chains and demand chains in these businesses is such a specialised task that the application of standard supply chain management heuristics and algorithms would require significant adaptation, a task beyond the cognitive capabilities of all but a handful of people on the earth. 

In other words, it would be fruitless to appoint directors with supply chain mastery to the boards of the FIRE businesses.

The only possible exception would be the boards of the logistics related FIRE businesses – such as REIT firms specialising in warehousing, or ship finance companies or insurance brokers focusing on international trade risks.

Fundamental Changes Supply Chain Transformation

Many Business Are Just Giant Supply Chains In Disguise

Now, on the other end of the spectrum, there are companies where the entire business is just a giant supply chain in disguise. I will give many example of these type of businesses later.

Let me start with the obvious observation in that case – any director on the board who does not have at least some supply chain mastery is lacking the requisite governance know-how. 

Question arises at this stage – what is supply chain mastery and how do you measure it. This page will answer that question more than adequately for our purpose.  I encourage you to peruse this material because in the virtualised post COVID-19 world, it is supply chain mastery that separates fake corporations from real winners. 

Now let me give some examples of such companies – where the entire business is just a giant supply chain in disguise.

The Essence Of Business Transformation

Here, I am resisting a temptation to say that – with every business trying to just manage the demand and the supply in a manner that minimises friction, and maximises profits all the time – every business is really just a supply chain business.

While that statement might be factually true, it will broaden the scope far too much for most people to be comfortable with it.

Moreover, in reality, supply managers and demand managers lack the knowledge to manage the demand and supply outside of a limited context that they generally encounter. Fixed bandwidth businesses – such as telecoms, Netflix etc are clear examples of this phenomenon.

Many other businesses, mainly service oriented businesses, do not want ‘traditional’ supply managers or demand managers ‘handling’ their ‘valuable human assets’, treating them like a bunch of widgets. This does not just apply to sensitive egos of prima donnas of Broadway, but also to industries as diverse as lift maintenance businesses, mining drilling businesses, advertising copy writer, strategy consultants, heart surgeons, and airlines pilots.

High Supply Chain Intensity Businesses Must Have Supply Chain Expertise On Their Boards

Almost all other businesses are high supply chain intensity businesses. Retail, manufacturing, distribution, wholesale, trading houses, food production, industrial goods, extraction and mining, and construction are businesses with a high level of physical movement of goods, high level of value derived from matching demand with supply in real-time, and high level of supplier/customer interaction during the conduct of business.  

Almost all those businesses MUST have at least one, perhaps multiple directors on board with real supply chain mastery

markets

Global supply chain Clients feedback

What Do People who matter Say About Us?

image of Garry Baddock Chief Operating Officer Graphite Energy
ALWAYS MEET OR EXCEED EXPECTATIONS
I have experience with many of the well-known top-tier strategy firms but chose Global Supply Chain to support me on my supply chain projects. They always meet and exceed my expectations due to the quality of the work, the ability to work collaboratively with internal teams, and the flexibility to adjust the project approach when required.
GARRY BADDOCK
Chief Operating Officer Graphite Energy
1
ORIGINAL TARGET SURPASSED BY 70% IN HALF THE TIME
When I engaged Vivek’s services for supply chain transformation in one of the companies I was heading, we expected the careful and methodical approach that he was famous for... I was pleased to note that the original target set for 3 years was surpassed by almost 70% in just 18 months.
PHILLIPPE ETTIENNE
CEO - Large Global transnational corporation From: FOREWORD - OUTSOURCING 3.0
Tony-Fedorowicz
VERY POWERFUL IDEAS, IMPLEMENTED VERY DILIGENTLY
I have used their services for several business transformations and workshops in many companies. Each time an outstanding workshop and project result was delivered ensuring the success of the business transformation project. Savings surpassed $25 Million per annum in one case. Very powerful ideas, implemented very diligently.
TONY FEDOROWICZ
Vice-President Supply Chain Asia Pacific
jeremy-barrett
THE BOARD WAS HIGHLY COMPLIMENTARY OF THE PRESENTATION AND THE RESULT
The board were highly complImentary of the presentation and result and commented that they were surprised at the level of detail and quality of analysis contained in the report. This speaks to the fact that Vivek is a very capable practitioner, grasps the key issues early, and uses highly effective methodologies, people and communication skills to identify where and how to gather critical information.
JEREMY BARRETT
President Apache Nitro Inc.

Get In Touch

What type of Help do you want?
Where can I reach you?
What would you like to discuss?