Supply chain as a path to the top

This week I was in Saginaw, Michigan with the supply chain team at Nexteer Automotive, which makes steering systems for cars and trucks. My opening slide featured three head shots and the question “what do these three people have in common?” The answer, which at least one person got right immediately, was that all had gone from supply chain to CEO.

The first was Tim Cook, successor to Steve Jobs at Apple; the second was Brian Krzanich, who took over from Paul Otelllini at Intel; and the third was Bo Andersson, a former sourcing guy who takes over the reins at Russia’s largest car maker, AvtoVAZ, this month.

About 30 minutes into the conversation, Jim Corbeil, VP of Supply Chain and CPO for Nexteer, stopped me to announce that we had a new member of the SCM-to-CEO club. Mary Barra had just been named to the top job at GM, Nexteer’s biggest customer. The news was big enough to make the front pages of not only the Detroit News, but also the Wall Street Journal and even the New York Times.

It turns out, though, that the news angle was all about Barra being the first woman to take the helm at one of the “big three” US auto makers. Apparently, people find this more exciting than the fact that Barra’s track to the top started in the factory and most recently included global head of product development, purchasing and supply chain.

In praise of Detroit

Having just hosted a live webinar on women in supply chain and committed a full-day conference to the topic, SCM World is certainly aware of gender issues in the workplace. This story, however, has layers below the sensational and important headline that Barra is not a man. Most important of these is that she is an insider with a huge range of job experience, including engineering, human resources and, yes, supply chain.

This distinction is something the Detroit press picked up that most others did not. Among several local articles dedicated to Barra’s ascent, the point that she had managed the vital and complex function of new product development and launch (NPDL) was deemed critical to the decision.

Outgoing CEO Dan Akerson was quoted in one interview on the topic of cultural change saying: “We’ve built so much complexity, and I’ll tell you complexity is the hardest thing for a leadership team to manage.”

The key insight, which respondents to our annual CSCO survey overwhelmingly see, is that NPDL has become vital to success for rising supply chain professionals. Between 2011 and 2013 the share of respondents saying this skill is “essential” to supply chain rose from 18% to 53%.

Why the big jump? My guess is that innovation, which is exploding with new technologies and markets as fuel, breeds complexity and cost. Detroit obviously gets this.

While at Nexteer, for instance, I saw the production from raw steel bars of steering column assemblies with tolerances of plus or minus two microns – less than the thickness of a human hair. Debugging the machining process depends not only on the machines themselves, but also on the air quality, temperature and, of course, operator skill.

The final product, which disappears from a consumer perspective but is carefully scrutinised by GM before going into anyone’s pickup truck, must be perfect. With all that can go wrong on the road to profits, the last thing this process needs is any added complexity, so GM uses the same product in multiple models.

Barra is at the top because she understands this and has shown she can manage it.

Managing a supply chain career

Our data on supply chain talent consistently shows that “offering staff a compelling career progression” is a major problem. Digging into the data we find that concerns here are most pronounced among VPs and directors, who often find themselves hitting a ceiling within their companies and leave for greener pastures.

For senior executives, the challenge is all about developing broad-based leaders who can foster innovation while taming complexity. Rising stars need to know they can get to the C-suite one day. Maybe a stint in product development is what they need.

Please contact me directly with any comments, questions or suggestions. I welcome your feedback.

Kevin O’Marah
Chief Content Officer
SCM World