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A New Value Towards CEO Operational Leadership Experience for Retail Industry

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In a May 2014 Supply Chain Matters commentary, Recruiting the New Era of Retail and Online Fulfillment Leaders, this Editor made the following statement:

“In this era of online retailing and Omni-commerce, there are two leadership competencies that will differentiate tomorrow’s executive leaders in retail.  They are a deep understanding of social-media fueled marketing and Internet focused retailing, and a deep awareness, understanding and appreciation of end-to-end supply chain inventory deployment and fulfillment capabilities.  From our lens, recruiting for retail C-level executives has been too focused on classic merchandising, finance or traditional brand marketing.”

Our commentary at that time reflected on business media reports indicating that major retailers such as JC Penny, Target and others were finding it difficult to recruit a qualified CEO. 

Now, more than seven months later, it is important to reflect on what is occurring, namely that some retail industry CEO selection teams now weigh operations leadership experience over that of pure merchandizing.

In late- July, Target, for the first-time in its history, brought in former PepsiCo executive Brian Cornell as its CEO.  Before accepting the Penny CEO role, Cornell had prior experience in leading PepsiCo’s Americas Food business unit and the Sam’s Club warehouse business for Wal-Mart stores.  Cornell is now in the process of re-evaluating all of Target’s operations and supporting processes.

Also in late July, Tesco recruited Dave Lewis, a 28 year executive veteran of Unilever as its new CEO after first-half profit trailed the grocer’s expectations. Lewis previously led the expansion of one of Unilever’s fastest-growing businesses, and was the first outsider CEO hired by the UK retailer. Lewis’s leadership experience included the chairmanship of U.K. and Ireland business and president of the Americas operating units at Unilever. When the Chairmen of Tesco was asked why that retailer sought with Lewis, he stated:

If you look at what Dave Lewis brings, David is absolutely the leader in brand management and brand identity, communication, customer development, customer management. Tesco is not short of retail skills.”

Last week, JC Penny finally selected its new CEO designate. In its reporting, The Wall Street Journal lead-in to the announcement noted that Penny elected to go with strength in nuts and bolts retailing rather than flashy merchandising. Former Home Depot and Target operations executive Marvin Ellison will ramp into the CEO position by August of 2015 after a several month transitional period as President. After the disastrous episode when former Apple retail executive Ron Johnson brought the retailer to near financial disaster with a $4 billion hit in revenues, Penny’s directors are opting for a longer ramp-in for its new CEO designee. Ellison will serve under the stewardship of Myron Ullman, who was brought back to save Penny in April of 2013.

Ellison’s accomplishments include 15 years at Target before joining Home Depot, where he held roles in global logistics and vice president of U.S. stores.  Ellison was reported to have helped to integrate Home Depot’s e-commerce operations with brick-and-mortar stores, namely implementing the buy online and pick-up in store initiative.

Regarding the JC Penny CEO selection, the WSJ provided the following commentary:

The appointment also reflects a broader shift in retail in which some big companies have favored detail-oriented operators over executives mainly lauded for brilliance in merchandising, as the industry faces giant new challenges in managing its supply chains and keeping customers from defecting to the web.”

Certainly, each retailer requires different leadership skills at a point in time, and operations experience may or may not be favored.  However, the evidence from above indicates that for those retailers who have especially struggled with the impacts and ramifications of today’s Omni-channel retail environment and permanent structural shifts in retailing are opting for proven operations leadership.

Sales and operations, supply chain and customer fulfillment professionals in retail industry environments should take note that this now building evidence of value in operations leadership will hopefully continue for selecting next generation retail leaders. 

Keep that in-mind as the next several weeks bring the usual doses of operational realities.

Bob Ferrari


Praise for the APICS International Student Competition in Supply Chain Management

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Supply Chain Matters extends an enthusiastic Tip-of-the-Hat to supply chain and operations Supply Chain Matters Tip of the Hat Awardprofessional association APICS Supply Chain Council for its efforts in sponsoring, what we believe to be as the first international student case study competition in supply chain management.  This  competition has involved 166 university teams from around the world, consisting of 4-5 students per team, competing on their knowledge and enthusiasm in the broad topics related to supply chain management.

Six international team finalists will join a United States contingent of 6 finalists to compete before a panel of judges in the final competition being held at the upcoming annual APICS conference on October 19-21 in New Orleans. The final awards ceremony is scheduled for October 21 with the top ranked teams awarded scholarships.

This is a great activity and deserves praise. It not only helps to foster the development of our next generation leaders for our broad supply chain community but it will encourage added interest and enthusiasm for students to consider a career in our field.  Once more, the listings of teams representing their schools and universities that are participating in this competition are names that perhaps many of our global readers and supply chain organizational leaders may not be all that familiar with. Universities from China, Egypt, Pakistan, Peru and Vietnam, to name but a few, elected to participate in this team competition. Some of the academic names certainly surprised this author. A representative listing can be viewed within an APICS Supply Chain Council news release.

Supply Chain Matters extends our added shout-out best wishes to all of the teams that have competed thus far and to those teams who have made the final list of team competition in New Orleans. Good luck and best wishes to each of you.

We plan to publish the final results for this team competition, to be categorized under our Distinguished Supply Chain Management Professionals search category, after they are announced.

Bob Ferrari

Founder and Executive Editor


Another Evidence Point on the White Hot Demand for Senior Supply Chain Executives

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Supply Chain Matters has previously alerted our readers among multiple previous postings to the red hot demand for both experienced supply chain professionals and executive leaders. (Search on the term: ‘talent management’ in our Categories section in the right-hand panel). While such demand for supply chain talent extends across multiple industry settings, the needs for highly experienced supply chain leadership within the pharmaceutical and medical device sector are especially growing.

Premier executive search firm Heidrick & Struggles today acknowledged the “white hot demand for supply chain executives.” The executive search firm appointed Carlos Garcia an added Partner within the firm’s Supply Chain and Operations Practice.  Mr. Garcia’s concentration will be on building a practice in the pharmaceutical, biologic and medical device industry sector. The appointment is described as a new strategic talent initiative for this executive search firm.

It is gratifying to again observe the continued demand for experienced supply chain executives. Let us hope that C-Suite and specialty executive search firms targeting pharma and medical supply chain executive needs understand that the best leaders for taking this industry forward may well come from leaders with proven experience from other industries that have overcome complexity, cost burdens and partner dysfunction across the extended supply chain network. Such successful leaders believe in building a cross-functional talent base with multiple industry experience, perspectives and learnings that can be successfully applied to healthcare delivery.

Amid the growing evidence of needs in supply chain and customer fulfillment management, students about to enter their new university academic studies may want to seriously consider a concentration in this area.

Bob Ferrari

 


The Most Important Considerations in Your Organization’s Supply Chain Technology Investment Plans

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Tomorrow, this author will be joining a distinguished compliment of speakers at the 7th Annual Supply Chain Management Summit sponsored by Bryant University and Benneker Industries. This event is turning out to be one of few premiere New England regional conferences focused on current issues and learning in supply chain management. Last year’s event drew upwards of 250 attendees among many industry settings.

Since many of our readers are located across the globe, the purpose of this Supply Chain Matters commentary is to summarize the key messages and takeaways of my talk.

My presentation is titled: New Developments in Supply Chain Technology- What to Consider in Your Supply Chain Investment Plans. The key takeaway messages I’ll be delivering is that three converging mega-forces:

  • Constantly shifting customer and business needs requiring sense and response, as well as  more predictive business processes and decision-making capabilities.
  • Supply chain process and IT technology convergence providing more cost affordable opportunities for integrating both physical as well as digital information and decision-making capabilities.
  • Digitally enabled manufacturing enabled by the Internet of Things.

are aligning toward extraordinary opportunities for what has long been the Holy Grail of our community, namely, integrating information and decision making across physical and digital supply chain spectrums. The alignments of the above mega-forces are providing significant opportunities in management alignment and top management sponsorship which can be leveraged. New and emerging technologies, especially engineered systems, cloud computing, predictive and prescriptive analytics are becoming the technology catalysts. Besides touching upon the latest advances and significantly changed IT market dynamics surrounding supply chain technology, my primary goal in this talk will be to advise supply chain teams on the most important investments to focus upon in the coming months and years.

First and foremost, and without question, the most important initiative for any supply chain organization today is a concerted set of initiatives directed at Talent Management. The business benefits of advanced technology are marginal without people who have the necessary and required skills to be able to leverage and harness these technologies. Recruitment, retention and increased skill needs are constantly identified as the single biggest challenge across C-level, business, IT supply chain and manufacturing teams, and the challenge will continue as newer technologies make their presence among industry supply chains.

More than ever in the past, supply chain, procurement, customer fulfillment, product lifecycle management and service management teams must have active technology awareness and planning strategies.  The umbrella and accountability of the supply chain now involves far broader dimensions of common information and related decision-making needs. The notion of the goal for pursuing Integrated Business Planning is not just IT vendor hype, but a necessary and required capability. An organization’s Sales and Operations Planning capability is thus the most critical to focus and improve upon. That stated, an important reminder for cross-functional and cross-business remains that final objective is not technology alone, but rather required business objectives and outcomes.

I’m also urging technology selection teams to broaden their context of their technology planning to include leveraging information and decision-making capabilities across an end-to-end, value-chain and B2B business network. With today’s pace of business change, supply chain planning or forecasting can no longer stand-alone as a capability, and must be augmented and synchronized with the sensing of actual events occurring across the supply chain network.  The good news here is that the supply chain technology market has shifted its emphasis toward broader support capabilities in this area.

For those who plan on attending tomorrow’s Summit, I look forward to meeting and chatting with all of you regarding your organizational and personal objectives. For those unable to attend, be advised that next week we will post a PDF copy of the presentation in our Supply Chain Matters Research Center for complimentary reader downloading.  Minimal registration information is all that is required.

As always, give as a call or contact us via email if you require further assistance or if this type of presentation can assist your organization or forum in setting its supply chain management objectives for the coming year. Our home page can be accessed at this web link.

Bob Ferrari


What is the Hottest Job in Supply Chain Tech?

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There is probably little surprise to those of us in the supply chain management and B2B network community as to what is the most in-demand job in our technology focused community. This weekend, the Wall Street Journal validated the most in-demand job, that being the data scientist.

In its article, Big Data’s High-Priests of Algorithms (paid subscription or free metered view), the WSJ reports “Retailers, banks, heavy-equipment makers and matchmakers all want specialists to extract and interpret the explosion of data from Internet clicks, machines and smartphones, setting off a scramble to find and train them.” Once more, what companies seek is more than just data analysis and interpretation skills but knowledge of customers, markets and business processes. 

And, in the classic high demand, short supply, scenario, employers need to be ready to attract these skills with competitive compensation. “While a six-figure starting salary might be common for someone coming straight out of a doctoral program, data scientists with just two years’ experience can earn between $200,000 and $300,000 a year, according to recruiters.

Not that long ago, when data scientists aspired to join academia or a Wall Street firm now have much broader opportunities and roles for career selection. Once more, employers will have to do their homework in personal communications and outreach in attracting such people and must be prepared to act quickly with an offer when they locate such talent.

There is a twofold message for both aspiring students who have hopefully chosen supply chain management as their career choice and those already working among supply chain teams.

For the professional already within supply chain management, augmenting one’s skills with formal certificate or degree programs in data science may well be a good investment.  Having several years of broad supply chain management experience and understanding and augmenting with data science skills provides a rather attractive background.

For aspiring students, the message is clearly to balance your studies and awareness of broad supply chain and business management with data analysis and interpretation skills. Probably one of the best investments in intern assignments would be on a big-data analysis or analytics projects. Besides a solid background in data-analysis, you also need good communications skills with the proven ability to collaborate with various functional and business teams on projects and initiatives. The messages for colleges and universities who currently specialize in supply chain management is to broaden the curriculum to include deeper data analysis training and skills development.

Some organizations may be prohibited in taking on highly specialized and expensive data analysis talent on a full-time basis.  That will open up broader business development opportunities among those professional services firms that cater to specialized supply chain management data analysis services and support programs.

The other obvious takeaway message is ongoing retention of such talent.  Challenging assignments, broadened opportunities to learn other aspects of the business and ongoing training support will all be important tenets of a retention strategy.

As this author reviews the current and upcoming wave of advanced information technology, I have no doubt that such technology will enable further breakthroughs in supply chain capabilities. However, organizations that are not actively investing in identifying talent needs and nurturing the skills needed to harness such technology will not be able to take advantage of such capabilities.

Bob Ferrari


Upcoming- Join Us at 7th Annual Supply Chain Management Summit

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Supply Chain Matters readers residing in the New England region are invited to join me at the 7th Annual Supply Chain Management Summit being held on Thursday, August 21 on the campus of Bryant University in Smithfield Rhode Island.

Over the years, this Summit has grown and matured into a northeast regional event focusing on a new burgeoning supply chain challenges and solutions. I was a featured speaker in the 2013 event which was very well attended and I’m pleased to be invited back to speak at this year’s Summit.

I’ll be joining a distinguished compliment of speakers for this year’s event including a dear former colleague, Dr. Larry Lapide who will be delivering the morning keynote, and Dr. Jim Tompkins who will deliver a very timely luncheon keynote.

My presentation is titled: New Developments in Supply Chain Technology- What to Consider in Your Supply Chain Investment Plans. This presentation will address:

- How senior industry executives view needs in business-wide decision-making, and what expectations they have for supply chain capabilities.

- The new requirements of Plan-Sense-Adapt- Synchronize and the new levers of information velocity-context- clarity

- A new thinking required to overcome current organizational and supply chain collaboration barriers

- What you should know as operations, planning, procurement or supply chain management professionals in terms of skills readiness and tool adoption

Individual registration for this upcoming conference is $150 with discounts available for organizational table sponsorships. Registration is available at this web link but act quickly since the event is a sure sellout.

If your organization has needs for a dynamic speaker, panelist or roundtable facilitator on compelling topics impacting supply chain management and B2B business networks, you are welcomed to review our Speaking Services page.

Bob Ferrari


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