Engineering, Operations & Supply Chain

How Engineering, Operations and Supply Chain Management Became a Strategic Asset

It’s no secret that supply chain shutdowns caused by Covid-19 closures exposed many organizations’ operational deficiencies in 2020. Now, with ongoing geopolitical uncertainty, inflation and demand for sustainability, industrial leaders are in the middle of what’s being called “The Great Supply Chain Reset.”

As organizations grapple with global disruption and increasingly complex operating environments, operations, engineering and supply chain management are no longer viewed as back-office functions. They have become strategic assets.

Additionally, economic turmoil like tariffs and interest rates are creating a lot of “what-if” scenarios in the marketplace. When this happens, companies double down on operational and engineering improvement to drive value creation. As a result, operations, supply chain, engineering and procurement leaders play a greater role in the strategic equation.

Here are a few ways we’ve seen this function change to usher in a new era of operations and supply chain management:

Succession Planning is Becoming More Important

A key development is the growing focus on succession planning in operational leadership. As operations, engineering and supply chain management leaders age out of the workforce, many organizations are turning this deficiency into an opportunity by developing early succession plans that target a more strategic talent profile.

Effective succession planning requires organizations to start recruitment early by investing in young people. If you plan to develop leaders from within, whether veteran team members or recent hires, you can ensure a smooth transition through formalized mentoring. Even if everyone on your leadership team is far from retirement, building these mentor-mentee relationships early will give the organization more options when colleagues eventually phase themselves out.

Internships can get young people interested in your organization. Community outreach in local colleges and high schools is a great way to educate them about your industry and share upcoming internship opportunities. Developing a community ambassador role in your organization that performs this kind of outreach is a solid strategy to recruit interns and keep your community informed about what your company does and who it’s looking for.

You can also take a step back and focus on finding the right talent instead of restricting hires to your industry. If you’re impressed with a candidate’s experience and see them adding value to the organization as a leader, the industry part of the equation can be taught. Bringing these types of people into your organization sooner rather than later will only benefit your succession plan.

The Uncoupling of Procurement and Supply Chain

Another significant transformation we’ve observed is the decoupling of procurement roles from supply chain roles. In response to the disruptions of the early 2020s, many firms find value in designating procurement as its own function. Specialized leaders now drive cost efficiency, risk mitigation and supplier strategy.

These roles often require candidates to have experience managing a budget, sourcing products and understanding the specific materials they’re in charge of procuring. In addition to procurement becoming a standalone function, we’ve seen the rise of specialized procurement positions. Titles like “vice president of soybean procurement” or “director of plastics procurement” are becoming more common.

The average specialized procurement executive has a related MBA degree and 15-20 years of procurement experience. They also have deep knowledge of the products they’re sourcing. In some cases, organizations require these individuals to have spent most of their career focused on a single product category. For engineering-driven procurement roles, this often includes a deep technical understanding of the systems or components being sourced.

Emphasis on Data, Strategy and Communication

While role specialization grows, the demands on leadership capabilities evolve. As artificial intelligence and automated processes sweep the manufacturing and engineering landscape, we’ve seen an increased need for data-driven leaders. Target profiles increasingly include data science skills because of the quick influx of new technologies in the operations, engineering and supply chain sectors.

Strategic thinkers are also an important commodity in these roles. Operations, supply chain, engineering and procurement leaders must now work cross-functionally to ensure efficiency. This requires a holistic mindset and executive presence to develop strong relationships with coworkers.

Looking Ahead

As global supply chains continue to evolve in response to disruption, innovation and new expectations, operations, engineering and supply chain leaders will remain at the forefront of business strategy. Their role is no longer confined to efficiency and execution and now includes talent development, cross-functional leadership and forward-looking strategy. Organizations that recognize this shift and invest accordingly will be better positioned to navigate complexity and create lasting advantage.