The pivotal role of Supply Chain Professionals

Supply Chain 2014-2015

For all that is said and written about invest­ment in IT systems, warehouse automation and the like, the responses of the executives interviewed for this report suggest that the develop­ment of the human resources side of supply chain management is just as significant as the rapid tech­nological advances being seen. The position that supply chain directors now cus­tomarily occupy in companies underlines the pivotal role they and their teams have in modern retailing.

As published in Retail Week & DWF Supply Chain: Trends and Innovations in Retail 2014-15 report

The most tangible illustration of this is the inclu­sion of supply chain directors on executive retail boards. “We have gone from a service partner to be­ing on the board,” says a supply chain director of a major specialist retailer. “The influence of supply chain management has increased dramatically,” adds the distribution director of a department store operator.

The distribution director of a fashion retailer, a board director like many of his peers, puts things rather more bluntly, candidly confessing that “in years gone by nobody took a blind bit of notice of me”, and that sentiment is probably far from unique, particularly among the longer-serving supply chain professions. But, according to the virtually unani­mous view of those interviewed for this report, sup­ply chain directors are no longer the bridesmaids of retail management.

The same distribution director continues: “There is no question that supply chain does influence the course of events more than we ever have in the past. Supply chain is at the heart of business strategy.”

Cross-functional collaboration

When asked whether internal collaboration with other functions had improved during the last year, there was a universally positive response, many go­ing on to stress that such collaboration is critical for their businesses.

For example, having supply chain professionals involved from the outset in discussions regarding how and from where to source new products is “critical”, according to the distribution director of a cosmetics retailer.

If no one from the supply chain team is present when the decision to go ahead with sourcing a new product is taken you could end up with “a serious problem at the end of the chain”, he claims. He con­tinues: “It is important for supply chain function people to be present at the beginning of those sorts of discussions. We need visibility from all the func­tions all the way through the process. Only then will we know that a new product is fit for our sup­ply chain from the outset.”

A supply chain executive at a major retail group also sees a marked increase in collaboration with other functions during the past year. “Internal col­laboration with other functions has definitely im­proved over the last year. This is very much the case between the commercial teams and the traders who are working much more collaboratively with the re­tail and the supply chain teams. Sitting in splendid isolation and planning stuff to compete in the mar­ketplace can no longer be done without the ability to be able to fulfil it through the distribution channels.”

A supply chain director at a department store op­erator urges greater collaboration “because improve­ment depends on intelligence because things are so volatile”, adding that he collaborates with “wider groups of teams than ever before”.

This view is echoed by another supply chain executive at a major national retail group, linking the collaborative trend in particular to the advent of multichannel and omnichannel retailing. “It [in­ternal collaboration] has improved and it had to. If we are talking multichannel and omnichannel there are so many business areas that are touched by it, so many areas where full co-operation is needed and where your best minds need to be applied to ensure you have the best solutions. You have to have sup­ply chain involved, you have to have IT involved and retail. And all the interested parties have to be around the table. You can’t work in silos anymore.”

Attracting talent

Perhaps because of the broader remit supply chain teams have, prospects for greater responsibility and a sense that what they are doing has a direct impact on the company’s fortunes, there is a view among some supply chain directors that working in supply chain has become a more attractive proposition.

A supply chain director at a national specialist retail chain says working in supply chain has even become “a little bit trendy”. He continues: “It is a more interesting job than it used to be. There is a different sort of person coming into supply chain now. A different calibre of person with a different set of skills. And certainly there are more women. In the last four years the number of senior managers I have in my team has increased by 32%. People want to come into this field now.”

That said, the distribution director of a depart­ment store operator points to a lack of qualified personnel to meet the new professional demands in supply chain management, and predicts that this will get worse as the economy strengthens. “There is a shortage of supply chain professionals, particu­larly those with systems experience and automation experience. We are playing catch-up in the profes­sional pool to meet the changes that have happened. I don’t think a lot of retailers have really felt that yet but, as the markets pick up again and people begin to invest again, skilled resource will be in short sup­ply.”

Indeed, the supply chain director of a fashion re­tailer also says it is “a struggle” to retain talent right now because “the market is moving”, rating retain­ing talent as the third most pressing challenge facing the company’s supply chain team. “The key for me is taking a chance and giving people responsibility. Today, young people want to feel good about what they are doing and I find when they are given early responsibility to prove themselves that can be more likely to instil loyalty to the company than a bonus in their pay packet.”

Training and Retention

With experience possibly in short supply, training is more important than ever. As with any branch of retail, ensuring that able people have the chance for career progression is vital. “For me the most impor­tant thing when I spot talent is to make sure there is enough room for them to grow and room for them to grow into,” says a supply chain director at a national specialist chain.

While many of the comments suggest the train­ing environment in supply chain is improving, some believe training for supply chain professionals still requires further development, particularly in light of the more challenging role they in many cases now have to perform. “People working in the sup­ply chain business have got to become more profes­sional,” says the distribution director of a fashion retailer. “The demands on supply chain workers are increasing and they need more training. That is a good thing because as requirements increase we will have better qualified people who will be more motivated and better rewarded.”

This supply chain director goes on to make a distinction between how human capital is being developed to improve the supply chain function and the introduction of new technology. “I would regard it as supply chain evolution rather than sup­ply chain innovation. Innovation suggests we are constantly trying to re-invent the wheel but that is not really true. Things are evolving because of the demands of multi and omnichannel. But it is still very much a bricks and mortar and flesh and blood environment.”

When asked how the retail supply chain in five years’ time will differ from that of today, a depart­ment store distribution director says rather bleakly: “The big change will be that there will be a lot less people in it. They will be replaced by more technol­ogy and more robots. It is technology that is driving supply chain: automation and machines replacing men.”

Watch out for our next blog post which will look at innovation in supply chain development.

If you have any questions or would like more information, please contact Hilary Ross Partner & Head of Retail, Food & Hospitality sector.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Hilary Ross

Executive Partner (London) - Head of Retail, Food & Hospitality

Recognised by The Lawyer as one of the UK’s Top 100 lawyers, I advise clients on compliance and challenges across the EU in relation to products, systems and safety.

Dominic Watkins

Partner - Head of Food Group

I am Head of DWF’s internationally renowned food sector group as well as being Head of Regulatory in London.

Ed Meikle

Partner - Head of Retail Group

I advise on all aspects of intellectual property law, especially advising businesses in retail, food, sport and consumer products on the development, commercialisation and protection of their brands and technology.