A supply-chain executive walked the long hallway to his CEO’s office one afternoon, quickly marshalling the arguments he would use to advocate for a global sales and operations planning, or S&OP, process. The goal: Convince the CEO that S&OP is indispensable to creating a world-class global supply chain, which in turn would become a major competitive advantage for the company. It seemed a straightforward exercise and the supply-chain executive was prepared for any questions or challenges the CEO might throw at him. But as he neared the boss’s office, questions of his own leaped to mind: “Why do I have to sell this plan? Why is the CEO not demanding it from me? I ought to be explaining why we’re not moving faster, rather than justifying S&OP in the first place!”
The answer to the supply-chain executive’s question is a surprisingly common one: He was not being pushed to move faster because his CEO didn’t appreciate the business-critical nature of the supply-chain operation. This lack of awareness was almost incomprehensible to the executive — yet there it was. (Perhaps, he thought, it was a failing of his own skills as a leader and advocate.) He knew, of course, that many worthy priorities compete for the CEO’s attention and that not all of them manage to gain it. Still, in an industry where supply-chain excellence is decisively important for operational efficiency, working-capital management, and ultimately the bottom line, a CEO ought to be fully engaged in this part of the business. Naturally, in some industries, supply-chain excellence doesn’t matter nearly as much. “But this isn’t one of them,” the executive thought.