The strategic supply chain

In many organizations, supply chain management is associated with the primary notion of minimizing costs. While optimizing costs, ensuring a reliable supply of goods and services, contract management and other such aspects are necessary and important ingredients for smooth operations, they are not sufficient to serve the strategic interests of the organization.
Does your organization understand and appreciate the strategic dimensions of supply chain? How much thought and effort does your organization devote at all levels to enhancing the supply chain organization’s strategic role and contribution? Do your supply chain capabilities help you build a strategic and competitive advantage? If not, why?
Strategic execution
In many organizations, support functions are relegated to the background and not part of the strategic equation. Every function in the organization has a strategic contribution to make in addition to its tactical responsibilities. As the organization grows, it succeeds not just on the power of strategic ideas, but on its strength of strategic execution — execution that is in-sync and cohesive with the strategy. The purpose of execution is not just to deliver on operational needs, but to help advance the strategy, which is your main competitive advantage.
Strategic supply chain management
As the CEO, you must ensure your supply chain management capabilities are an integral consideration of your strategy. The supply chain cannot be an operational afterthought once the strategy has been developed. It is part of the substratum, the foundation that helps and enables the organization to execute its strategic imperatives.
The supply chain effort cannot be focused on costs alone if time-to-market is the biggest driver of your strategy. If the complexity and risk exposure of your projects require certain partner suppliers, your supply chain organization must clearly understand those imperatives and use them in your decision-making process.
Operational executives are always under incessant pressure to deliver work. It is difficult for them to take the long view. A part of the supply chain organization must match that intensity and be tactically focused. A part of the supply chain organization must, however, take the strategic view and constantly ask themselves critical questions such as, “How do we increase our corporate competitive advantage through supply chain ideas and initiatives?” and “How do we align closely with the corporate strategy?”
Supply chain organization and strategic role

Organization charts send a strong message to the organization. On the organizational chart, the supply chain organization must have a visible role at strategic levels. Viewing the supply chain in a limited functional role is missing an opportunity. Though the tactical aspects of the supply chain fit well within a functional role, its organization can facilitate a broader, cross-functional perspective. First, it must help connect all the dots along the value-creation map from suppliers through operations to customers. Second, it must stay true to the strategy and core business model of the organization. Then and only then can supply chain fulfill its strategic calling.

Ravi Kathuria is president pf Cohegic Corp. Quoted in The Wall Street Journal, Barron’s and WorldNews, Ravi is a recognized thought leader. Featured on the BusinessMakers show, CBS Radio, TEDx and PBS Nightly Business Report, he is the author of the highly acclaimed book, “How Cohesive is Your Company?: A Leadership Parable.”