Why Organizational Alignment is Critical to the Supply Chain Response

May 15, 2023
6:02 pm

Typing away on a beautiful May morning, with the flowers blooming and the birds nesting in the garden, engages my mind. Mondays are my day to post my Shaman blog and compose a podcast. The Shaman blog is now over eleven years old.

I remember my first post like it was yesterday. New then to WordPress, it took me a week to finish the post. (It was a struggle!) Now the writing follows the research. I mix the quantitative research with my observations and interviews, and the posts seem to roll from my fingers. I appreciate you as a reader and enjoy your comments. Over 28,000 readers read this blog. I give thanks.

My goal is for me to give to you and for you to give to the community. Let me explain, if you fill out one of my surveys on LinkedIn, I share the research results in front of the paywall (I believe that supply chain research should be readily available and not locked behind a paywall.) (If you would like to participate in a current research study, we would love your help and participation in the contract manufacturing study. We are trying to assess the value of a network in managing contract manufacturing.) When I use the research, I keep the information on the respondent–name, company, title, and individual comments–confidential. I only share the results in aggregate.

A Closer Look at Organizational Alignment

In a recent survey on organizational alignment, I asked the respondents to rate their supply chain based on counter-opposing adjectives. Note that the respondents in Figure 1, 50% see their supply chain as working well, 42% view it as resilient, and 45% see it as proactive, but only 31% feel that their supply chain is aligned. Most see their supply chain as fixed and insular.

Figure 1. Use of Supply Chain Descriptors

Most organizations are locked into functional silos driven by functional metrics. Stuck in a rut, supply chain leaders try to punch their way through a set of conflicting metrics and priorities each day. Functional excellence throws the supply chain out of balance decreasing results on a balanced scorecard of growth, margin, inventory turns, customer service and ROIC (Return on Invested Capital).

One of the alignment gaps that is growing and is unfortunate is the gap between procurement and manufacturing. This gap of 48% between manufacturing and procurement is the highest seen in studies across the decade. The metrics defining success in manufacturing and procurement do not align.

Figure 2. Current Organizational Alignment

Let’s take the example of supplier development. I feel that supplier development– the practice of an organization to work with the supplier base to help drive improvements– is as important as an effective Sales and Operations Planning (S&OP) process. In the research, an effective supplier development program significantly improved resilience and agility. 56% of the respondents reported an active supplier development program.

Figure 3. Impact of Supplier Development Programs on Organizational Descriptors

One in two manufacturing organizations report outside the supply chain leader: supply chain organizations typically have the functions of planning, transportation, distribution and procurement as direct reports. When manufacturing and procurement report through the same leader, they are better aligned.

Reporting relationships to the supply chain leader typically include distribution and transportation roles and are less likely to include manufacturing. Note that the respondents rate the manufacturing organization as mature but the areas of transportation, distribution, and procurement significantly lower. Sadly, the area of customer service–the lifeblood of the organization–rates the lowest.

So, you might say, so what Lora? I believe that the traditional functional metrics of lowest manufacturing cost and OEE (Overall Equipment Effectiveness) throw the supply chain out of balance. A company cannot perform well if manufacturing is focused on the lowest manufacturing cost, transportation is focused on the lowest transportation cost and procurement is seeking the lowest procurement cost and customer service is an immature capability.

A Need for A Supply Chain Reset

Most groups do not realize that they are out of balance. They operate daily within their ruts, not realizing that their views of excellence sub-optimize performance. Planners and customer service are caught between the alignment cracks trying to improve reliability in a dysfunctional organization.

Reset: An act or instance of setting again. an act or instance of setting, adjusting, or fixing something in a new or different way.
Merriam-Webster

If you have not checked it out, here is my latest report. In this report, I call for a supply chain reset: a need to redefine supply chain thinking. The goal is to improve the resilience of metrics performance in times of high demand and supply variability. For most, this requires the unlearning of traditional supply-centric concepts. The most critical element for organizations that rated themselves as “working well” during the pandemic phases was organizational alignment—hopefully a call to action for all.

Warning: Sidestep the Narrative of the Misguided Goldiggers

August 10, 2026 4:58 pm

Ten years ago, I started writing a book titled Stories of the Misguided Gold Diggers. The book was a collection of stories from two decades of stories of technology leaders perpetuating the myth of integrated end-to-end supply chain planning.

I dusted off the manuscript on Saturday. I think that we have a new chapter. Companies focused on putting Artificial Intelligence (AI) on top of existing architectures are putting AI Stupid on steroids.

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.

Supply Chain Shaman