What defines Supply Chain leadership?

June 26, 2017

Back in January, Healthcare Purchasing News published a summary of a Supply Chain Leadership and Succession survey my firm conducted, along with my observations on the trends that the results represented.

Survey respondents, while recognizing title variation, all represented the top Supply Chain position in their respective organizations. The industry would likely consider all of them to be leaders. Much depends, of course, on how anyone defines the term “leader.”

The survey used the term “leader” repeatedly and pointed to the expected high turnover at the top Supply Chain Management positions in the provider sector of the industry. By recognizing and highlighting this phenomenon, the survey called for the soon-to-be-retired leaders to develop and execute a succession plan and for the industry to develop a pool of qualified candidates to fill these challenging positions.

Pause for a moment and consider just what a leader is. What are the skill sets needed? What are the characteristics that will likely lead to success? What is the best source of “would-be” Supply Chain leader candidates? And, finally, what is the best source that the would-be candidates could pursue that would help them qualify for these positons?

Consider also what a leader does. There are scores of books written about this topic, but the following summation is offered for consideration. Simply, a leader is someone that others willingly follow. Why? Because they are the boss? Not really. How about because of what they do and how they act?

Leaders have a plan that is based on asking questions, learning by observing what is going on and thoughtfully considering how to make or do things better. Leaders commit to the plan without reservation. They follow it with confidence, optimism and energy. Leaders communicate the plan up, down and across the organization. They educate those who need to understand enough about the plan, the reasons, the expected outcomes, and even enough of Supply Chain Management principles and concepts everyone needs to understand in order to do what they need to do for the plan to succeed. Of course, leaders also track — quantitatively and qualitatively — progress and results, to make sure the plan is working. If there are issues, they make adjustments and/or remove the obstacles that those working the plan might encounter. And they take responsibility, by actions, not just words.

What makes a leader?

Survey respondents stated overwhelmingly, that Leader Skills were more important than Supply Chain Technical Skills, 96.6 percent to 3.4 percent! Okay, but is that what they really meant? So additional questions were asked to make sure the message and meanings were clear.

When asked to rank the top five skills that are most important for a Supply Chain Leader to likely be successful, they responded: Visioning, Strategic Planning, Change Management, Team Leading and Communicating. Note, there are no Supply Chain-related technical skills in the top five. In fact, supply chain technical skills don’t show up on the list until No. 7, followed by three more leader skills to round out the top 10. Starting to see the direction this is going?

Next, survey respondents listed their top five characteristics that a Supply Chain Leader requires. They are:

1. Big picture view

2. Results orientation

3. Passion/enthusiasm for what is the best for the Supply Chain and the people working in it, can do — the best possible level of performance

4. Ethics and integrity

5. Personal accountability.

The following seems to be the clincher. When asked to list the top 10 supply chain management components that the leader must excel in, they responded as follows:

1. Strategic planning

2. Contracting

3. Value analysis

4. Negotiating

5. Applying technology tools

6. Sourcing

7. Utilization analysis

8. Cost analysis

9. Lean Six Sigma

10. Productivity analysis

The message is consistent and clear. The top-ranked component of Supply Chain Management is not even a supply chain technical or tactical component. It is a leadership skill set element.

So how do the striving candidates for the top leader positions obtain or enhance their skills and develop the critical leadership characteristics? What sources are out there and what might be considered the best sources?

Survey respondents stated that the sources for developing the Supply Chain Management skills and tools include:

1. Universities with Supply Chain Management programs at the under graduate and graduate level (Note, in previous surveys, the respondent stated that top leader position candidates must have a graduate degree in Management (MBA) or Supply Chain Management)

2. Internal education and training at your place of employment

3. Association of Healthcare Resource and Material Management — AHRMM

The source considered the best is university programs, of which there are many and growing as Supply Chain Management continues to emerge as a critical part of the success of any enterprise — not just a hospital.

When considering sources of obtaining or honing Leadership skills, the top source was universities. This seems to be consistent with other survey findings as well as solid advice.

Finally, for those looking for the opportunity to advance to a top position/leader role, go for it! The numbers are critical. Too many of those in the top Supply Chain positions are retiring in a short period of time. Admittedly, most (60 percent-plus) of the retiring veterans have not prepared their organization for their departure with a Succession Plan or a candidate (internal or external) ready to step up and step in. The Supply Chain impact on healthcare provider enterprises is being recognized, and relied on for helping providers achieve and maintain financial sustainability in the era of falling reimbursement. They need talent and those who can deliver results as well as products. They need leaders.