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Perspectives on Logistics Leadership

Five critical dimensions for leadership in logistics can be identified to transform the 20 percent of the logistics change initiative directly within the control of a company’s logistics organization. As a catalyst for widespread change, however, logistics leadership must include many other areas of business.

Few logistics executives have been trained in leadership and change management and most have limited experience with successful change. Since there are few university programs in leadership or change management, most managers extend their limited academic background with on-the-job experience to guide them. To effectively lead and provide the direction for change, it is important that executives understand the dimensions of logistics leadership and the dynamics of supply chain change.

The most fundamental point to keep in mind about logistics and supply chain leadership and change is that a business process that provides some level of performance is almost always in place. Rarely does logistics change management commence from ground zero. Management must begin with the existing process, keep it working at a level to maintain adequate performance during the change process, and redesign and implement enhanced supply chain processes. Logistics and supply chain change improves a process or practice that isn’t broken and, in the minds of some, doesn’t need to be fixed.
Logistics leadership and change management requires the ability to identify the vectors of logistics change and then the ability to propose and operationalize initiatives to profit from being the first to respond. Based on the Supply Chain Process Model introduced in 21st Century Logistics: Making Supply Chain Integration a Reality, Exhibit 1 illustrates the major capabilities critical for logistics leaders. The ball illustrated in motion by the dotted lines represents the rapidly changing supply chain environment. Like supply chain requirements, the motion is constant and it is continuously being redirected under the influence of customer and competitive actions. The Supply Chain Change Process Model suggests five critical dimensions for logistics leadership. The dimensions include:

  1. Ability to identify customer and end-customer requirements;
  2. Ability to identify and characterize competitive capabilities;
  3. Ability to understand firm and supply chain competencies;
  4. Ability to envision the dynamics between the requirements, capabilities and competencies and project the trends; and
  5. Ability to develop and lead action plan implementation in a transition environment.

Customer Requirements

The first dimension is the ability to understand both customer and end-customer supply chain requirements. This includes understanding service requirements and performance levels that will be necessary to satisfy intermediate and end-customers today and especially in the future. For example, logistics leaders must be able to identify the changing delivery and service requirements of channel segments or even of individual customers. The true leader must not only understand current requirements, but must also anticipate future supply chain requirements of customers and the end-customer. An understanding of current and future requirements allows the logistics leader to define the ultimate goal. Not only is this dimension critical for leading the executive’s own firm, it is equally as import to be able to lead and educate the firm’s critical customers to ensure their long-term success.

To enhance the current situation, the vision must be shared and adopted by a wide range of individuals and groups who must be involved to achieve meaningful change.

Competitive Capabilities

The second dimension of a logistics leader is the ability to identify and understand competitive capabilities. A logistics leader must anticipate and understand the current and likely strengths and weaknesses of key competitors. Such understanding is critical to allow a firm and its supply chain partners to match competitive threats and target weaknesses. However, information and understanding regarding the supply chain environment are often difficult to obtain. The leader must determine the framework to characterize both competitive and non-competitive firms and then develop the means to assess and benchmark other organizations. While it is not easy to identify the current capabilities of competitors, true logistics leaders must insight regarding future competitive capabilities

Supply Chain Competencie

The third dimension of a logistics leader is the ability to understand and critically evaluate the competencies of their own supply chain. The Supply Chain 2000 Framework and diagnostic methodology introduced at Michigan State University (MSU) determined that high performing supply chains exhibit high degrees of customer integration, internal integration, material/service supplier integration, technology and planning integration, measurement integration and relationship integration (For a more detailed discussion, see 21st Century Logistics: Making Supply Chain Integration a Reality from the Council of Logistics Management). For each of these integration competencies, a logistics leader must be able to assess the firm’s capabilities as well as the complementary capabilities of other supply chain partners. While the MSU research has demonstrated that high performing supply chains must have a high level of ability in all of the integration competencies, it is possible for firms to achieve high performance by using the competencies of supply chain partners.

Vision

Visioning is a process of creativity and innovation. The fourth dimension of logistics leaders is the ability to develop a big picture perspective that conceptualizes the dynamics and influence of complex interrelationships. Leaders see an integrative pattern of connectiveness where others may see only specific events and problems requiring resolution. The connectiveness relates the trends in terms of customer requirements, firm capabilities, competitive capabilities and the responses in the form of firm competitiveness. Leaders are able to create a vision of future market requirements and then identify refinements in operations, processes, or application of external resources to achieve such visions. Such leaders are also able to articulate the reality of the present, thus identifying the comparative gap between vision and reality needed to motivate change.

The role of visioning is to conceptualize the supply chain situation and identify desirable and achievable system modifications consistent with overall enterprise objectives. To enhance the current situation, the vision must be shared and adopted by a wide range of individuals and groups who must be involved if to achieve meaningful change. Thus, visions with a high degree of perceived legitimacy and offering substantial opportunity are more likely to be accepted over those proposing radical change. For some types of supply chain change, reasonable modification of current practices and relationships is sufficient. The truly difficult leadership challenges are those proposing that well-established practices or relationships be discarded or radically modified. As noted earlier, resistance to new practices and relationships that challenge a sense of individual and business security can force a serious, if not terminal, resistance to the change management process.
The difference between the logistics leader’s current assessment and the vision of desired achievement defines the opportunity gap that determines the performance and financial benefits attainable from improved integration. To be meaningful, these performance and financial measures must be quantified to initiate and drive change. In this respect, leadership is essential to help simplify operating complexity by identifying and focusing on relationships and practices that, if modified, have the potential to enhance performance. Change management leadership is the art of creatively identifying, articulating and guiding a shared vision of the opportunity gap and the means to improve. While leaders astute in change management may identify an opportunity and scope its potential, the existence and magnitude of a gap is typically not so obvious to managers who are deeply involved in day-to-day operations. The balance between vision, current reality, and resource opportunities creates the essence of a logistics leader’s action plan.
Successful logistics change leaders must be able to communicate the benefits and risks associated with the vision in a credible manner if widespread support for any initiative is to be generated. Leaders who successfully enable change are masters at creating legitimacy for visions in terms of detailing future directions and conceptualizing the capabilities and resources necessary to get there. Most important, such visions must be aligned with overall enterprise and supply chain goals.

Just as a firm’s supply chain competency is dynamic, so are the associated visions. Since visions are about the future, they frequently change. In fact, visions must undergo constant refinement if they are to remain relevant. Once a vision is widely shared, it immediately impacts current decision-making. In essence, the shared vision becomes part of the present as well as the desired future and the logistics leader can effectively establish that vision as the goal.

Action Plan

In a matter of time, organizational leaders will conclude that sufficient potential exists to justify undertaking change. The fifth dimension of logistics leadership is the ability to develop this conclusion and then develop a plan to operationalize it. The sales and development process is particularly challenging in a transition environment. The environmental dynamics of logistics and supply chain management mean that the guidelines and principles must be constantly transitioned and refined. The principles that were learned or applied yesterday must be refined to work in the current environment. Effective action planning requires the logistics leader to adapt and extend the traditional principles to the current and anticipated environment.

This requires that the logistics leader be able to systematically: 1) identify the change initiatives; 2) characterize the benefits; 3) determine the obstacles to overcome; 4) highlight the organizational implications; 5) determine the resource requirements; and 6) establish accountability and action measurements. While it is not be necessary for the logistics leader to embody the detailed skills for change management, an effective leader must maintain the big-picture perspective and drive the change management initiatives.
Conclusion

Typically, supply chain change also requires the alignment of operations outside the direct control of a specific executive and, in terms of the supply chain, even the firm itself. One executive stressed the fundamental importance of leadership by estimating that only 20 percent of the scope of a typical logistical change initiative is within the direct control of a firm’s logistics organization. The remaining 80 percent typically involve the responsibilities of managers from other business areas. Thus, logistical leaders must sell ideas and serve as cross-functional catalysts. Managing change through others is a difficult task that logistics leaders need to master.
The abilities represented through these dimensions represent a significant challenge and a substantial opportunity for managers to differentiate themselves. Combining logistics and supply chain knowledge with effective change management skills provides an individual an opportunity to establish his or her importance in supply chain and supply chain’s importance for the organization. The increasing role that logistics and supply chain management continue to take in corporate competitiveness shows that there will always be a need for logistics leaders.