The Chief Supply Chain Officer is the New C-Suite Star

When Nordstrom created its first C-suite role focused squarely on the supply chain earlier this year, it signalled the “increasingly critical role” the unglamorous topic of logistics had come to play in the department store group’s business.

For the newly created post, it tapped former Amazon VP Alexis DePree. The appointment followed a series of ambitious moves by the retailer to accelerate its shift to digital, which now accounts for the majority of its sales. Among other efforts, the company significantly increased the number of products available for two-day delivery and next-day pickup in key markets, adding substantial complexity to its operations.

Nordstrom isn’t the only company taking such steps. Big brands and retailers have dramatically increased their recruitment of professionals focused on supply chain and logistics in the last year-and-a-half, a reaction to the major disruptions caused by the pandemic and wider industry shifts.

This month, luggage brand Away named Charles Liu its first-ever chief operating officer, tasked with focusing on the company’s supply chain and business technology teams. In August, Revlon tapped former PPI Beauty chief operating officer Thomas Cho to become its first chief supply chain officer, or CSCO. Between October 2020 and this November, job postings for supply chain managers skyrocketed 47 percent across industries in the United States, according to careers site Indeed. Roles for supply chain specialists jumped 79 percent, Indeed said.

An Evolving Need

Even before the pandemic, the fashion industry was grappling with increasingly complex supply chains that demanded new expertise to manage.

Now, port snarls, soaring shipping costs and product shortages have turbocharged that need. On top of that, the rise of e-commerce and new expectations around corporate social responsibility mean that more companies require a supply chain executive in the C-suite who can create a comprehensive strategy connecting merchandising, product design and human resources with product procurement.

There’s just not enough time for inefficiencies anymore or to have a silo mentality.

“At first it was all about ‘how do I move product most effectively and get it where I need it in time?’” said Craig Rowley, a senior client partner at business consulting firm Korn Ferry. “Today, it requires an individual to think strategically about the business.”

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For instance, Revlon’s new chief supply chain officer Cho acts as a “centralised command and control centre” for departments including manufacturing, procurement and sales, operations and planning, helping the company coordinate quickly to respond to crises, he said.

“There’s just not enough time for inefficiencies anymore or to have a silo mentality,” Cho said. “In the past, supply chain and manufacturing used to be fragmented but to compete in the world now they have to be seamless.”

Historically, fashion’s supply chain managers have served in middle management functions, often sitting several levels down from the C-suite. The industry’s recent hiring spree points to the role’s growing importance and the challenges associated with attracting people with the right know-how for the position.

“Sometimes these title shifts — or evolutions in titles — are created by what you need in order to get that calibre person into the organisation,” said Paula Reid, president of executive search firm Paula Reid & Co. “Where do you find room for them and how do you carve out the differences in what you want them to concentrate on?”

Hiring the right CSCO can play a critical role in setting up an organisation’s talent development strategy and beefing up expertise for years to come. An effective CSCO could create a plan to cross-train early career professionals in areas like distribution, logistics and finance that could put them on track for supply chain management, Lisa Butkus, partner and head of the retail and luxury goods practice at executive search firm Hanold Associates.

Sometimes these title shifts — or evolutions in titles — are created by what you need in order to get that caliber person into the organization

“Having a chief supply chain officer close to your CEO can help educate them on the pressures and demands and where they need to [deploy] resources,” she said. “A CSCO would work in partnership with HR leaders to [determine] how to recruit and engage talent and make the strategy sustainable.”

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What to Look for in a CSCO

For companies ready to make the investment in a supply chain chief, they will want to enlist candidates with a mix of both technical and strategic leadership skills.

“Companies have to look at the profile of this leader broadly because you need someone that has experience in supply chain operations, been responsible for [profit and loss] at some point or led a business unit,” said Butkus. “They need to have that entrepreneurial mindset that allows them to tap into a lot of different skill sets and help develop people.”

But it’s a talent profile that’s tough to find.

“I would [estimate] that a third to a half of supply chain leaders in America are really great at delivery and execution but not so great at strategic thinking — because not everybody can do that,” said Rowley.

Retailers could recruit from the consumer goods sector where companies like Procter & Gamble and Kimberly-Clarke have a longer history of hiring for the role. But, many will need to groom their CSCO internally, said Rowley and Butkus.

Things are not going to get easier … it’s going to be tougher.

Nordstrom’s DePree came from Amazon where she oversaw the tech giant’s sorting centres and was also vice president of global supply chain operations. Her resumé includes nearly a decade in various distribution leadership roles at Target.

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Macy’s CSCO Dennis Mullahy, who joined the company from the arts and crafts chain Michael’s Stores in 2019, is a retail vet with more than 30 years of experience, including a stint at beauty purveyor Ulta. Tory Burch recruited Chris Callieri from Adidas in 2018 to head up supply chain management. Before joining the sportswear giant, he led the supply chain and operations practice at retail consulting firm HRC Advisory. Revlon’s Cho served as CSCO at beauty company Mary Kay Cosmetics and was twice a COO.

While the recent stream of crises have meant that supply chain leaders are “constantly fighting fires,” when the macroeconomic picture stabilises, fashion firms will need CSCOs who can identify new innovations and plan everything from where to place distribution centres to how a company can cut costs and minimise climate impact when manufacturing and moving product, Rowley said.

“We’re moving away from decentralised to more centralised [management] models because things are not going to get easier … it’s going to be tougher,” said Cho.

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