Supply Chains By the Numbers

December 30, 2014
8:59 pm

Tomorrow starts a new year.
It will take me a while to adjust. Intellectually, while I will know the year has changed, I will screw up, time and time again, by writing 2014 on documents for many, many months. For me tonight, sitting facing the city skyline in the dark, 2015 sounds so far in the future; but, I know that it is on the horizon.
I take the years that end in the numbers five and zero a bit more seriously than other years. These are a mark in time, a rite of passage, and a good time to reflect. When 2015 rolls in, for me, it will mark a decade of quantitative research focused on understanding the evolution of supply chain management. So, in this blog, I would like to reflect on what I have learned in this process.
Insights on Supply Chain Organizations
In the early years, there were no supply chain organizations. I like many other gray-haired supply chain professionals reported through a functional organization like manufacturing or transportation. For me, it was manufacturing. I proudly wore my red hard hat, yellow jumpsuit and tan safety shoes in a world of rhythmic machinery and constant manual scheduling. I loved to open the doors of the factory floor and hear the hum of production. I liked belonging to an organization that made things. It was a special club. This all changed.
In the mid-1980s, leaders like Colgate, Intel, and Procter & Gamble defined supply chain organizations where source, make and deliver functions reported through the same organization, and had a common leader. Today, we know that when these organizations defined with a focus on end-to-end processes there was better alignment, agility and resiliency in balance sheet results. They were pioneers: the exception, not the rule.
For the majority of companies, the supply chain organization is now 15-years old. It has seven functions reporting through the supply chain leader. The reporting of manufacturing and procurement organizations through the supply chain leader has the probability of the flip of a coin. There is only a 50% chance that manufacturing or procurement are one of these functions reporting through the supply chain organizations. Even today, most organizations are still very functionally defined. We are still very early in the definition of end-to-end supply chain excellence.
However, ever so slowly, things are changing. Today, roughly one in three companies have a Chief Supply Chain Officer (CSCO). While these positions look very different—varying by culture and structural definition—we can clearly see supply chain is rising in importance. There was no CSCO in the 1980s or 1990s. They first appeared on the scene in 2005. Today, the role is growing in stature and acceptance.

To drive progress, one in three companies also has a supply chain center of excellence. Organizational success is not guaranteed. Today, only slightly more than 50% rate these organizations as effective. Why? At first these numbers surprised me. I thought that they would be higher. So, we started digging into the research to gain an understanding. In our studies, we found that it comes down to the tug of war between functional excellence and the definition of end-to-end processes. They are quite different, and many companies have not defined supply chain excellence sufficiently to enable success. In addition, we find that the center of excellence will fail if:

There is not the right balance between push and pull. The highest rated supply chain centers of excellence let themselves be pulled into the business based on business demand. They do not make the mistake of forcing themselves on business leaders.
It does not serve the business. Many supply chain centers of excellence become academic and irrelevant. To be successful, the center needs to serve the business and help to align tactics to achieve business strategies.
Cannot stay relevant. The center of excellence must have a stake in the game and carry a portion of the business goals. It cannot be relevant if it is a part-time, or understaffed, superfluous organization.

Are you interested in understanding more? Help us to help you better understand supply chain centers of excellence by participating in our research study on what makes a center of excellence successful. We hope to hear from you!
… this is the last blog of 2014. It is my 300th blog post on the Supply Chain Shaman. Check back in 2015 to read the 301st blog. Tomorrow night, I will raise a toast to my readers. All the best to you in the New Year!

The Myth of End-to-End Planning

July 31, 2026 9:14 pm

Supply chain planning, supply management, supply chain execution, network design, and transportation/logistics management operate in silos. Not much has changed over four decades. The connections flow back through transactional systems: order-to-cash and procure-to-pay. There is a myth that companies can buy an end-to-end supply chain management solution. This is largely a myth. Here we explain.

Lead Time: A Broken Gossamer

July 16, 2026 6:38 pm

If you are struggling with supply chain planning, dancing in the light of shiny objects, and scratching your head, please read on. My goal is to help you.

Please do not AI Stupid. What do I mean? AI Stupid is putting agents and agentics on top of existing architectures believing that making them faster and hands free add value. To me, this is fools play.

I love AI. I am excited about new technologies. To this end, I want to shine a light on how new technologies can help address the black holes and inconsistencies in today’s supply chain, which largely stem from the limitations of the first generation of supply chain planning and execution technologies. In this blog, I give you three places to start.

Do You Need a Supply Chain Coach?

July 9, 2026 5:27 pm

Supply chain is where the rubber hits the road. For a public company, over 40% of market capitalization is tied to the trade-offs between growth, operating margin, inventory management, and Return on Capital Employed.

The road for supply chain improvement is fraught with issues. Here we share some and offer some advice.

Is your Supply Chain AI Ready?

June 11, 2026 2:39 pm

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Case Study: A Scrappy Demand Management Approach

June 9, 2026 5:37 pm

This study of Franklin Sports shines a light on the work that needs to be done at the sales account level to challenge a retail forecast, and also highlights the importance of a new technique for a forecast engine — reinforcement learning.

Artificial intelligence comes in many forms — large language models, generative AI, machine learning, unstructured text mining, deep learning, neural networks, reinforcement learning, agents, and agentics. While the industry is wigging out about agentics, I think reinforcement learning is a great step forward in the journey of Artificial Intelligence.

Can We Side-Step the AI Spin Cycle?

June 7, 2026 3:44 pm

When it comes to combining tech, 1+1+1 should equal more than 1. The impact should be exponential. Unfortunately, today, the answer is 0.

What do I mean? Let me explain.

I find that the supply chain technology market moves slowly along traditional technology lines. Conferences are usually focused on the use of technology, not on redefining work. This bothers me. I want it to bother you as well.

Here I share some insights to drive change.