Only About 25 Percent of the Fortune 125 have a Single, Integrated Global Supply Chain Structure under a Chief Supply Chain Officer

CSCO Insights Editorial Staff

While there is clearly a significant move towards greater integration of the supply chain organization, and a growing number of executives with the title of “Chief Supply Chain Officer” (CSCO), we are still very early in the game, especially for large companies.

To assess the state of the Integrated Supply Chain Organization, CSCO Insights Research recently performed a study of the top 125 “product” companies from the Fortune 500 list – meaning manufacturers, retailers and wholesalers (service-heavy companies were excluded).The research was performed by reviewing each company’s investor or related web sites, where substantial information about company executives and related matters can be found. This web research was supplemented by conversations with two leading executive research firms in the supply chain space with additional knowledge about specific companies and their supply chain organizations.

The research was conducted in conjunction with the premier issue of CSCO Insights, a new hardcopy newsletter specifically written for current or aspiring supply chain and logistics executives. (To apply for a CSCO Insights subscription, click here; to download an electronic copy of the premier edition, click here).

An integrated supply chain was defined as one that included logistics, distribution, procurement/sourcing, and – where applicable – manufacturing, under one organizational umbrella and leader.

The research found:

• 25% of these Fortune 25 companies had a single executive in change of an integrated global supply chain.
• 26% of the companies had a supply chain related executive/title among corporate officers, but that executive did not have responsibility for the entire supply chain. Often, purchasing/procurement was the missing function; in other cases, it was manufacturing.
• A few companies (2%) have an integrated supply chain/executive, but for North America only.
• 9% identified a manufacturing executive as the top supply chain-related officer.
• 4% identified a chief procurement/purchasing officer as the only supply chain related corporate officer.
• 34% had no supply chain related executive listed among corporate officers/executives in the web site. While this does not conclusively demonstrate the lack of an integrated supply chain organization, logic says that such an organization/executive would be listed among the company’s senior executives. In some cases (for example, GE and several other companies), having a single, integrated supply chain organization (and hence executive) across a multi-divisional company, often in vary different lines of business, probably does not make much sense.

See the graphic summarizing this data below.

Source: CSCO Insights Research

Retail companies were the most likely to have integrated supply chain structures, but this could be due in part to the fact that they do not have manufacturing, which for many companies has historically had a direct line reporting relationship to the CEO/COO/President.

This research is supported by anecdotal evidence from the recruiting world.

“The number of fully integrated supply chain organizations is still surprisingly low but increasing,” says Dave MacEachern, head of the supply chain practice at Spencer Stuart, one of the leading executive recruiters in this space. “If I were to guess, it is 25% of the time that we see true end-to-end supply chain requirements when companies are searching for a supply chain executive.”

CSCO Insights will repeat this research on an annual basis. More detail on this topic isavailable in the premier issue of the newsletter.