Gleneagles 2013: Learning from leaders

A memorable quote that I’ll attribute to Bruce Richardson, a former colleague at AMR Research, goes: “Live as if you would die tomorrow; learn as if you would live forever.”

I heard it as we were climbing out of a recession back in 2003 and thought it appropriate to recall now. Having just left the SCM World Leaders Forum event at Gleneagles, Scotland, where the most impressive array of supply chain leaders I have ever seen in one place met to learn from each other, I feel suddenly on the cusp of a great time.

Since 2008 we’ve known our share of doubt and fear in a global economy that lurches from one existential threat to the next. This week, at what was our third annual gathering, however, I saw reason for confidence that a historic corner may soon be turned.

Collaboration accelerates learning

The opening presentation delivered by Tom Johnstone, CEO of Swedish industrial giant SKF, spoke fluent supply chain while hammering home a message of agility as the vital enabler for business success in today’s multi-speed world. At one level, this speech nailed the linkage between brilliance in supply chain and value for shareholders. But at another more actionable level it reinforced the importance of deep, trusting and collaborative relationships with suppliers.

Johnstone’s presentation struck a chord with me because I have seen first-hand that SKF really means it. One of SKF’s key suppliers, Ovako, was also at Gleneagles and the dialogue between the two was genuinely focused on how the two businesses, working together, can create more value for the chain as whole. The theory has always made sense, of course, but far too often such relationships regress to the less evolved purchasing-selling dynamic I have hated for years (see my previous blog, Knuckle draggers beware…).

This openness to joint value creation was typical of the event, with hundreds of one-to-one meetings between board-level supply chain executives across multi-billion dollar trading partner relationships. In aggregate, our 100 or so attendees accounted for $2.1 trillion in annual sales. If half of that represents cost of goods sold and capital equipment, then we’re talking a trillion dollars in supply chain spend flowing into 5,429 production facilities directly controlled by the people in that ballroom. What if they can find an extra 50 basis points of margin?

Supply chain leaders learn from each other

We did a piece of field research last year on “collaborative execution”, by which we meant operating together across trading partner relationships with shared goals and metrics. In addition to finding that most people feel benefits are shared fairly across such relationships, we also found that problems were solved twice as quickly while innovation sped up. The key takeaway was that learning curves are about 50% steeper than in traditional arm’s length buy-sell relationships.

At Gleneagles I saw John Church, SVP of Supply Chain for General Mills, stand up and ask our closing presenter, Reuben Slone, SVP of Supply Chain for Walgreens, how he could help in meeting the new challenges posed by digitally empowered consumers. The macroeconomic data won’t catch this inflection point until it’s too late, but collaborative touch points like those between Walgreens and General Mills at one end of the supply chain, or Ovako and SKF at the other, have obvious potential to ride that steeper learning curve to dramatically better results. Agility in supply chain will have its biggest impact where leaders work together to design operations that position investment in flexibility according to payback, not balance of power.

The best have a lot to share

I’ve kept most of the badges given to me at conferences I’ve addressed and the count is exactly 315. I’ve seen some good presentations, but never have I learned as much in one 48-hour period. Our Executive Advisory Board got us off on the right foot on Saturday with a six-hour meeting that pointed to ways to bring these lessons to the “rising stars” in their organisations. Plus, we enjoyed the rare pleasure of a two-day conference ending on a high note.

Between the golf, shooting, bagpipes and falconry (not to mention a few wee drams!), many seemed to be living as if there were no tomorrow. With all I learned at Leaders Forum 2013, I wish I could live forever, because there’s so much left to do.

Kevin O’Marah
Chief Content Officer
SCM World

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