CSCO – an important C-Suite to the Executive Committees
Blog: Ulla Keino, Chairman of the Board, SeaFocus and Prof. Dr Eyden Samunderu, PhD, Program Director, International School of Management, Dortmund, Germany
Published November 4th, 2017
Published first: Baltic RIM Economies Issue # 3 November 2nd, 2017 Expert Article 2254
Baltic Sea Region is known for its intelligence and boasts a well-established education system at both foundation and advanced university level. The higher education sector has in particular been able to produce top level practitioners in multiple industry sectors such as engineering, economics and legal profession. The vast amount of these expert personnel are imbedded as in-house experts, advisors and have subsequently achieved the prominence of COOs; CFOs and CEOs of some of the leading global firms. These experts have achieved phenomenal results by posting consistent record high quarterly corporate results.
Discussion topics are centred on the increasing prominence of e-commerce, the utilisation of unmanned vessels and cars, Internet of Things (IoT), Artificial Intelligence and the rapid pace of technology improvements in all fields of business.
Companies are facing the complexities and challenges of recruiting adequately equipped CDO (Chief Digital Officer), CTO (Chief Transformation Officer), CSO (Chief Security Officer) etc. who have the robust skills sets required to make that quantum leap into the digital arena and have the business acumen to face the technology transformation.
It seems, there is generally a “skills knowledge vacuum” designed to ensure that today´s companies can build sustainable corporate compliance by embracing the environmental regulatory policies that have immensely impact the supply chain network. In retrospect, companies may now need to assign a functional role of a CGO (Chief Green Officer) to deal with such emerging environment challenges.
While digitalisation and new commercial structures are gathering technological momentum, at accelerating speed, the consumer hardly realises what this all can mean in the consumer prices, if transparency and cost efficiency and the benefits of digitalisation would really be rolled out to the end price of a product. Do the COOs, and the Sales Directors understand all this and align the pricing strategies to meet consumer expectations per se? Traditional Retail chains are competing against e-commerce business models that are willing to invest a large proportion of their budgetary expenditure on building tighter bonds with their customer base in order to achieve a higher customer retention ratio. This in particular has been achieved by paying more of the deliveries they ever budgeted in the product sales price.
A person articulating this strategically essential part of the business, must understand the financial impact of the mentioned compliance of environmental regulations, changes in the oil price, currency risks, insurance coverages and premiums, cyber security throughout the whole chain, blockchain and what will this mean in the future, impact of autonomous vessels in manning costs, and thus an opportunity to capture cost savings, legal thorough understanding of international contract laws and national bribery acts and much more.
If the supply chain network is not steered as it should be, it can result to non-budgeted costs and ultimately even loss of a critical key account.
In retrospect efficiently and robust designed and well-integrated supply chain, including sufficient continuity management strategy, provides a viable vehicle of achieving corporate level performance. Guaranteeing the deliveries and eliminating additional surcharges for customers, and at the same time securing own profitability could lead to sustainable competitive advantage, resulting in sound profitability and increase in share price earnings. Surprisingly, in this world of digital disruption era, we still are struggling in many companies with the basics. We think Supply Chain Management means logistics.
In order to lift supply chain management to the strategic importance it deserves, a new role of a Chief Supply Chain Officer (CSCO) as a right hand of the CEO should be adopted.
Not any one single person can have such a multitude of skills-set required for such a demanding corporate role. Building such a position the future CSCOs should have expert advisors as right hands covering all the above mentioned areas, and only one of those experts should be a logistics director. The only definitive skill such a CSCO should possess self is leadership and understanding of sourcing, i.e. what skills do I lack or need, and how can I mobilise support in order to successfully accomplish the prescribed goals.
There is a C-suite position existing already called CSCO, but it has not so far been widely adopted in the BSR, and not given the corporate status this position deserves.
The CSCOs should embrace social capital, i.e. trust and have power and mandate, they should be the advisors of the whole Executive Committee and providing key impetus to support the CEO. Eventually, Supply Chain Management will be understood as the core strategic competence of the digital era.