For all the talk of the importance of supply chain management in this age of networked organisations, less than a quarter of British companies currently have a supply chain strategy in place. So says a recent study published by the Chartered Institute of Purchasing and Supply (CIPS) and Andersen Consulting. Furthermore, where supply chain strategies do exist, only one in three is actually integrated with the overall business strategy.
Small wonder then that the report recommends giving the company's head of logistics a seat on the board. But is a chair at the boardroom table really the best way to develop supply chain management skills and strategy?
Brian Scholey, principal consultant with KPMG Management Consultants, thinks so. 'Supply chain management is so central to the whole commercial success of a company that, if it is not represented at board level, the company is probably not paying enough attention to the marketplace or customer needs,' he says.
The report's authors also believe that appointing the head of supply chain management to board level is a positive move. 'Supply chain integration linking customers and suppliers to an organisation is a significant change for most companies and the impetus for change and the commitment to it starts at the top.' says Greg Caster of Andersen Consulting. He is backed up by Charles Holden, CIPS chief executive, who says supply chain management has barely developed in the four years since the Institute's last survey. 'Supply chain management is often something that people engage in after strategy has been developed and yet it can be a major influence in forming strategy at the outset - which is why there should be an appointment at board level.'
A number of large organisations have responded. Supermarket giant Tesco is a good example. David Reid is its head of distribution but also deputy chairman. And GKN Westland Helicopters has a director of material, Rob Cook, who also has overall responsibility for integrated logistics support within the company. Many companies still stop one step short of elevating the discipline to the boardroom, however. At tobacco giant BAT, Ian Brown, the head of the UK supply chain, is part of the senior management team but reports to a board director.
For many companies this may be enough, says Professor Michael Brown, Exel chair, logistics, at the University of Westminster. He believes that some seniority is required, since the manager needs access to the chief executive's ear. But a rose by any other name smells just as sweet, he argues. The title is unimportant so long as companies get the logistics process right. 'I am not absolutely certain,' he sums up pragmatically, 'that it matters what you call someone so long as the issue is being dealt with.'.