ft csco dinner forum evolving... · ft csco dinner forum were john willman, former uk business...

FT CSCO Dinner ForumSUMMARY REPORTThe Evolving Role of theChief Supply Chain Officer

23 April 2009 | London

In association with

FINANCIAL TIMES CSCO DINNER FORUM

S P E A K E R S

John WillmanFormer UK Business Editor,Financial Times

Andrew JacksonSupply Chain Management Executive,IBM Global Business Services

Beverley TewChief Procurement Officer,BBC

David ThomasCommercial Director,HM Revenue and Customs

The Evolving Role of the CSCO l 23 April 2009 l London

F T D I N N E R FO RU M D I G EST

The Evolving Role of the Chief Supply Chain Officer

Like economies and financial markets, supply chains have grown more global andinterconnected. With the global marketplace increasingly volatile, the supply chainis exposed to shocks and disruptions, meaning that minor missteps andmiscalculations can have major consequences as impacts quickly spread likeviruses throughout complex networks.

The chief supply chain officer (CSCO) has a critical role to play in all of this. Fromprocurement and personnel through to manufacturing and logistics, they areinvolved in all parts of the business. They are charged with delivering better valueto the enterprise while, at the same time, mitigating risk. But how to meet thedemands of an ever-changing and competitive marketplace?

IBM spoke with nearly 400 senior executives responsible for their organisations’supply chain strategies and operations in a Global Chief Supply Chain OfficerStudy. The discussions revealed five key findings about how these executives viewtheir roles:

1. Cost containment: rapid, constant change is rocking this traditional area ofstrength and outstripping supply chain executives’ ability to adapt.

2. Visibility: flooded with more information than ever, supply chain executives stillstruggle to ‘see’ and act on the right information.

3. Risk: CFOs are not the only senior executives urgently concerned about risk –risk management ranks remarkably high on the supply chain agenda as well.


4. Customer intimacy: Despite demand-driven mantras, companies are betterconnected to their suppliers than their customers.

5. Globalisation: Contrary to initial rationale, globalisation has proven to be moreabout revenue growth than cost savings.

So as the supply chain becomes more complex, costly and vulnerable, shouldconventional strategies and designs be thrown away? On April 23 2009, agathering of experts convened at the Pearson Building in London to debate thisquestion and the evolving role of the chief supply chain officer. Speaking at the FT CSCO Dinner Forum were John Willman, former UK Business Editor at theFinancial Times; Andrew Jackson, Supply Chain Management Executive at IBMGlobal Business Services; Beverley Tew, Chief Procurement Officer, BBC; and David Thomas, Commercial Director at HM Revenue & Customs.

The forum began with a discussion of the findings from the IBM survey. Havingrecognised the key drivers in the supply chain, IBM identified two major challengesfor the CSCO going forward, namely sustainability and talent. Trying to cut costsbut also think about how to minimise risk while having social considerations posesa new and complex challenge. At the same time, CSCOs are struggling in acquiring,developing and retaining top global talent. A career in supply chain management isnot always the first choice for a graduate eyeing up their options for the future.

The question was raised of whether, as the pace of globalisation slows in light ofthe economic situation, another challenge for the CSCO is to claw back control ofelements within the supply chain, rather than risk expanding it ever further.Certainly, when oil went through the $100 ceiling last year, there was a case forsupply chains to contract and source closer to home in a bid to save money.However, the fact that prices for oil have see-sawed shows that the role of theCSCO is not to make knee jerk decisions about procurement but to rather makestrategic projections that look to long term quality and supply reliability.


The need to go beyond simple efficiency gains in the supply chain was a recurringtheme throughout the forum. Taking money out of the supply base or makingredundancies will not, of itself, deliver all that a modern CSCO has to offer. Thereare many areas of the business that have been traditionally seen as out of theremit of the CSCO because these business functions are seen as having uniquerequirements that cannot be structured around commercial contracts, controlsand processes. This needs to change if the CSCO is to become a facilitator andagent of change.

One speaker spoke of the challenge they had in convincing the creative side of thebusiness that the CSCO could add value. ‘We did it very simply in the early daysthrough simple category stuff, but as we started cutting our teeth, we were allowed into the heartland of the creative process,’ said the speaker. ‘The way I did that was to bring people from the creative process into procurement, ratherthan going into the market to get procurement specialists and teach them aboutthe creative process.’

The evolving role of CSCO is about getting additional value from existing contractsand challenging the way the business does things. Recession proofing is a criticalrole for the CSCO and they should track how the organisation’s portfolio ofsuppliers is performing. Should a critical supplier be struggling, the CSCO needs to play the part of risk manager and have an alternative plan in place. Similarly,the CSCO should keep a watchful eye on the contracts with suppliers and be ready to renegotiate when payment plans come to an end. ‘The finance teambreath a sigh of relief that somebody else is there to help support them,’ said one of the speakers.

Picking up on the CSCO challenges raised by IBM’s survey, the point was raisedduring the forum that having the right supply chain team in place is crucial.Procurement skills are one thing, but the CSCO also needs supply chain executivesaround them who are practical and use their common sense.


‘They want to look for opportunities and don’t want to do the same job day in dayout. They can manage suppliers but can also win over customers and get them todo things the way we want,’ said one speaker. ‘These are the people who arepassionate about simplifying processes.’

As the evening progressed, the forum moved onto the role of the CSCO insupporting the chief executive and chief finance officer. In any businesstransformation, the CSCO needs to create visibility in an enterprise over the keyareas of spend, supply base and contract schedules. ‘If you have that in place atpoint, you’re likely to survive,’ said one speaker, ‘you can walk into the boardroomand your CEO and CFO are suddenly your friends because you have all the power –you know what’s going on in the organisation better than they do.’

For the CSCO, creating visibility within the enterprise will often require externalhelp, as there will not be the necessary in-house expertise in areas such as dataanalysis. Having brought in external help, however, it is vital that the internal teamunderstand how the visibility has been achieved otherwise the experts will have toreturn every time something needs to be changed.

Wrapped up in the push for visibility is standardisation, be it common codingsystems for products and services, or in the ecommerce systems runningprocurement. As a CSCO, it can be hard to get people to understand the need for industry standard e-commerce systems rather than bespoke solutions. ‘Butthis is vital if we are to ever get shared services,’ said one speaker. ‘If you use thestandard middleware, we can communicate between different ERP systems – isn’tthat sensible?’


So how close is the CSCO to becoming an orchestrator? There are few other roleswhere someone has insights into the customer, the supplier, the finance function,the inventory and the market. With information that was previously created bypeople now machine generated, the entire supply chain is interconnected meaningthat strategic decisions, rather than day-to-day procurement choices, can bemade. Admittedly, supply chain executives may be prevented from fulfilling thisrole at the moment. However, their focus should be in trying to overcome thebarriers that are keeping them from driving change across all of the business sothat they can create the smarter supply chain of the future.


B I O G R A P H I ES

John WillmanFormer UK Business EditorFinancial Times

John Willman was appointed UK Business Editor of the Financial Times in April 2006,with responsibility for a 15-strong team of specialist industrial reporters and the FT’sunique network of British regional correspondents.

Joining the FT in 1991, he has held several positions, including chief leader-writer,banking editor, consumer industries editor, features editor and public policy editor. Hisfirst jobs in journalism were on Which? magazine and Assessment. Before that, he wasan economics teacher.

In the Business Journalist of the Year awards in March 2002, John was named thewinner in the banking category. He was Financial Journalist of the Year at the 2001British Press Awards and winner of the Norwich Union Healthcare/Medical Journalists’Association Awards in 1998.

John has written and contributed to several books, including the annual Lloyds TSB TaxGuide, The Which? Guide to Planning and Conservation, The Major Effect and A BetterState of Health. He has extensive broadcast experience and has appeared frequently onBBC TV and radio, Sky and CNN.

Andrew JacksonSupply Chain Management Executive,IBM Global Business Services

Andrew is the former leader of IBM's Supply Chain Management services business inthe UK and Ireland. The SCM team provides advisory and implementation services inareas such as strategy development, procurement, product lifecycle management,logistics, inventory optimisation, asset management. Recognised by analysts as theleaders in this field, the IBM team has deep business process and technology expertise,across many industries.

In addition, Andrew heads up the IBM Global Business Services’ Sustainable SupplyChain initiative globally, working with IBM’s research facilities and other supply chainleaders around the world.

As a member of both the Carbon Council of the European Supply Chain Institute, and IBM’sown Climate Change Centre of Expertise, Andrew is working with clients looking at thechallenges of reducing greenhouse gas emissions across complex global supply chains.

Andrew joined IBM in 2002 from PriceWaterhouseCoopers where he was a partner.Before this time, his career included line management roles in logistics and distributionmanagement.


B I O G R A P H I ES

Beverley TewChief Procurement OfficerBBC

Beverley is responsible for the design and delivery of the BBC’s procurement strategy for£1.3 billion of external spend. Her remit covers the sourcing for programme making andthe BBC’s overall outsourcing strategy; this includes, amongst other things, the criticalservices of transmission and licence fee collection as well as the back office functions ofFinance, HR and Facilities Management.

In addition to her Procurement role Beverley runs TV Licensing, which is the publicauthority that collects the £3.5 billion of licence fee income each year. This is a large andcomplex operation which is managed through an out-sourced model of 5 key suppliers atan overall cost of £130m per annum.

She has been at the BBC for eleven years and has held a number of senior financial rolesin Finance and Procurement. Before joining the BBC she qualified as a charteredaccountant with Ernst & Young and worked in the commercial and consulting sectors.

She is also the treasurer Trustee on the board of BBC Children in Need.

David ThomasCommercial DirectorHM Revenue and Customs

David was born in Hampshire, educated at Farnborough Grammar School and is aGeography graduate of Manchester University.

He spent 25 years in various parts of the UK and in a variety of roles in the gas industry.Though by training he is a Procurement and Supply Chain professional who has been a fullmember of CIPS for more than 20 years, he has also undertaken a number of operationalroles in the industry and was at the very heart of the gas industry liberalisation process.

David was Director of Procurement and Logistics at Transco at the time of the merger withthe National Grid and became the first Director of Procurement and Logistics in NGT whenthe merger was completed.

Three years after the merger he left NGT at the point they were disposing of much of theirgas distribution assets and joined the Macquarie European Investment Fund organisationas part of an acquisition team. He remained with the acquired business as its CPO until itgot to steady state.

In January 2006 he joined HM Revenue and Customs as its first Commercial Director – a position he still holds.

David spent 22 years as an infantry officer in the Territorial Army and now lives in Warwickshire.

I N AS S O C I AT I O N W I T H

Why IBM?

Every day, the world becomes exponentially more interconnected, digitised and data-aware.

The world is getting smarter, triggering unprecedented change. Yesterday’s models no longer equip organisations to capitalise on this change.

At IBM, we partner with you to deliver real business value by:

• Enriching business consulting with advanced research, analytics and technology.

• Teaming with you on all phases of engagement to plan, build, invent and implementbusiness solutions.

• Establishing new, flexible and iterative approaches that only IBM can offer throughour unique combination of skills, experience and capabilities.

• Bringing together the world’s largest consulting practice with industry-leadingresearch capability.

• Leveraging the proven roadmaps and frameworks we have developed with our clients in 17 industries.

• Applying IBM's global expertise and local capabilities through our unique global delivery network combined with our teams in over 170 countries. This provides our clients with an integrated approach to business design and execution, turning strategies into actions.

IBM's Supply Chain Management Services can help your enterprise with the marginpressures, logistics disruptions, changing market boundaries and global manufacturingchallenges that are part of the daily supply chain process. We help organisationsbecome more intelligent, interconnected and instrumented for a smarter supply chain to increase responsiveness and reduce risk.

To find out more please visit; ibm.com/gbs/uk or email [email protected]

Andrew JacksonSupply Chain Management ExecutiveIBM Global Business [email protected]+44 (0)207 021 8090


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