Introducing the Role of the COO in the Supply Chain

February 14, 2020

As a C-suite executive, the chief operations officer (COO) needs to demonstrate leadership and help develop long-term strategy. As manager of operations, the COO role includes responsibilities for day-to-day business processes like supply chain management and human resources management. Overseeing operations for an entire company is a big job. The COO role works closely with the CFO, supports the CEO, and reports to the board of directors.

A background in supply chain management is a great foundation for those who pursue the COO role. Supply chains are at the heart of operations for many companies. Supply chain management professionals are called upon to exhibit many of the same qualities expected from COOs: leadership, personnel management, financial planning, and strategic thinking.

If you want a career path that leads to the COO role in supply chain management, the first step is to educate yourself about the responsibilities and qualifications you need in order to be considered for this position. Here’s an overview of the chief operations officer job, educational background of successful applicants for the COO role in supply chain management, and how you can move from supply chain management leadership into a supply chain executive leadership position.

What are the responsibilities of the COO role in supply chain management?

The chief operations officer may be involved in many aspects of the business including marketing initiatives, planning and strategy, and financial reporting. But, of course, the heart of the COO role in supply chain management is operations.

As head of operations, the COO is tasked with making the supply chain as efficient as possible to reduce overhead and operating costs and to increase the speed with which the business can bring new products to market. In addition, the COO role in supply chain management uses data from current and past performance to map out the future of the supply chain. A skilled COO is always marshalling resources to prepare the supply chain for future challenges.

Operations management can include coordination of both internal staff and the work of external vendors, involving many elements of the supply chain. The COO supply chain role brings current best practices to the attention of the board of directors and CEO, then shows how these can be implemented, both internally and in relation to external partners.

When the company adds elements to its supply chain or brings new processes online, the COO must make sure the transition is as smooth as possible. The COO is tasked with keeping operations uninterrupted even as all elements of the supply chain are constantly evaluated for areas of improvement. The COO role is never a static one because the operations of the supply chain are in constant flux. That makes the COO job both exciting and demanding.

The COO works on strategy with the chief executive officer, the board of directors, and other top leadership to address each issue that confronts the supply chain. Responsibilities of the chief operations officer also include working with human resources on management and mentorship of staff, as well as staff evaluations.

Leadership in operations means more than focusing on internal processes, cost savings, and supply chain management. The responsibilities of the COO extend to the end consumer. The ultimate goal of the COO role is to maintain the health of the business and facilitate its growth. This can’t be done without factoring in consumer satisfaction, so management decisions need to be based on data about, and feedback from, the company’s customers. Any new operations strategy implemented by the chief executive needs to use customer experience/satisfaction and adoption as metrics of success.

Skills a chief operations officer should have

Like every other executive officer, the chief operations officer must have a range of skills. In addition to the ability to develop corporate strategy in coordination with other chief executives of the company, the COO has to exhibit leadership. The COO needs to be able to make decisions and follow them through to implementation and completion.

Communication skills are important for every chief executive, including those filling the COO role. You have to be able to communicate your operations strategy in a way that speaks not only to your management counterparts, but also inspires employees at all levels to work together in pursuit of business goals. This also means communicating successes, celebrating staff contributions, and sharing the credit for completed projects that enhance operations and the supply chain. The COO is an executive with a leadership role, but the objectives of the business don’t get executed without buy-in from staff at all levels. The savvy COO knows how to bring others along and build enthusiasm for the team enterprise.

As part of the human resources portfolio of the COO, skills at fostering capacity in staff members and delegating responsibility are important. As a member of the executive team, the COO role oversees and manages the big picture in operations. It is not realistic for an executive officer to take on too many responsibilities. Being able to trust others to take charge and to accept that they may make mistakes and use those as learning opportunities is one of the traits that will make you a great COO.

The CFO is the financial officer in management, but the COO in supply chain management has a role in finance as well. The supply chain and other aspects of operations are closely tied to the financial health of the enterprise. The person who fills the COO role has to be able to understand and create financial reports and be able to communicate both the effects of changes in the supply chain and the impact on the financial health of the business. One of the responsibilities of a leadership position in operations is to monitor the supply chain for potential cost savings and to foresee looming changes that could add to manufacturing and logistics expenses. Changes to the price of raw materials, transportation, labor, or manufacturing operations can be catastrophic if the COO and other executive officers are caught off guard. A successful COO will anticipate these changes and create a forward-thinking strategy to mitigate the impact on the supply chain and the business as a whole.

The COO role in the modern corporation

Research has shown that chief operations officers come from a variety of backgrounds. This makes it hard to generalize about the COO role. COOs have risen from the ranks of the sales teams, human resources, finance, marketing, and, of course, supply chain management. Because of this diversity, the responsibilities of the COO role at one company may be very different from those at another. Some companies neglect the COO role entirely and don’t include this position among their top management.

The COO can be a mentor, ally, or sparring partner for the CEO – and sometimes all of the above – at different times. The main role of the COO in some organizations is to foster capacity in the workforce by providing staff with the resources, training, and motivation to improve their productivity. In some organizations, the board of directors may hire a COO who will shake things up and bring a change of strategy and perspective to leadership that has grown stagnant.

In some companies, the COO role is an audition for the chief executive position. The move from COO to CEO is a natural transition. So, supply chain management is a career path that can lead not only to executive roles such as chief operations officer but all the way to the top of the organization.

On the way up to the executive level, supply chain management professionals are tremendous resources for businesses at all levels. In a role such as vice president of operations or vice president of finance, a supply chain manager can bring a perspective that has incredible value to the business.

Every chief executive needs to think on their feet. Supply chain managers have years of experience doing just that. That aptitude makes a supply chain management background the perfect preparation for the COO role.

Modern businesses recognize the importance of supply chain management. That’s why the route to chief operations officer-and even chief executive officer-increasingly runs through supply chain management.

The convergence of chief operating officer and chief supply chain officer

The chief executive officers and chief operations officers of today’s companies often rise through the ranks from supply chain management. This is not only because supply chain managers have the skills and experience it takes to fill the COO role. It’s also because the supply chain has taken a position of central importance in driving profitability and market share. This has led some companies to supplement the COO role with the management position of chief supply chain officer or CSCO or to replace the COO with a CSCO. In the wake of a trend to place the COO responsibilities in the hands of the chief executive officer due to regulatory changes in the early 2000s, some companies got rid of the COO role. That left room at the top which has, in some cases, been filled by the CSCO position.

Whether the title is COO or CSCO, supply chain management experience is a great qualification for an executive position in operations. A supply chain professional in the COO role can help companies save money on operations, negotiate better contracts with vendors and suppliers, and find better sources for raw materials. Supply chain managers are experienced at leadership and can motivate their teams to work hard toward shared goals.

The modern COO needs to be able to optimize supply chain operations. The increasing need for speed can put pressure on supply chains and make the supply chain management role vital to the management of many businesses.

The pressure to speed up the delivery of new products to both drive and meet consumer demand is exemplified by industries such as fashion. McKinsey found that the most profitable fashion companies relied on data analytics to drive their strategy. These companies also found ways to speed up their supply chain, reducing the time to market for a new product or fashion line from 40 weeks to as little as six weeks. In a world driven by online trends that can come and go in a matter of weeks or even days, the need for speed in the supply chain is obvious.

Product development, prototyping, and manufacturing aren’t the only aspects of the supply chain that the modern executive officer needs to put on the fast track to keep their company a step ahead of the competition. Amazon has made fast delivery a bellwether for success in ecommerce. Since almost every business-even those with a large brick-and-mortar presence-relies on online sales for at least a portion of its revenue, the consumer delivery segment of the supply chain has taken on new urgency.

Initially, Amazon Prime offered members two-day delivery on many products. That seemed lightning-fast and drove much of the industry to match Amazon’s two-day delivery. Now, Amazon Prime aims for next-day delivery on many items, with same-day delivery available for selected items in certain cities.

The need for speedy delivery of customer orders challenges the operations executive to rise to meet the competition. There are several possible strategies to meet this supply chain management challenge. In the COO role, you could transition to faster delivery services and find a way to absorb the additional shipping cost. Alternatively, you could outsource your fulfillment to a company with multiple warehouses distributed across the US that would allow next-day delivery to your customer base without rush shipping charges. The multiple warehouse solution will require careful execution of a distribution strategy that places the right products in the right warehouse locations at the right time to meet demand.

These are only two among many supply chain issues that require visionary leadership and savvy management from the executive officer in charge of operations. As the speed of innovation increases, new demands for innovations in operations crop up more quickly than ever. A chief operations officer with supply chain management expertise is exactly the right person to provide the leadership that today’s companies need to meet these challenges. The responsibilities of the COO role are well placed with a supply chain management professional.

Compensation and employment prospects for the operations management executive

The COO role comes with many responsibilities. It’s not surprising, therefore, that it also comes with a paycheck that reflects the importance of this executive position to the organization. A recent search on Payscale found that the average salary for a COO with strategic planning skills was $147,791. The Balance Careers reported a median salary of $183,270 for people in chief executive jobs. The top earners in this field make more than $208,000 a year.

The Bureau of Labor Statistics (BLS) projects steady job growth for top executive positions in the decade ahead. BLS data show a total of 2.6 million top executives in the US in 2018. A recent search on Glassdoor for chief operations officer positions found around 4,000 job openings across the country. In addition to the title of COO, job titles included Director of Operations; Director, Strategy Operations; and Head of Customer Operations.

In a competitive field, you need every advantage to move forward on your COO career path. An advanced degree combined with a strong background in supply chain management is a great résumé to bring to a job search for operations positions at the management or executive level. A master’s in supply chain management can make you stand out from the crowd.

Why choose Haslam for becoming a chief operating officer?

A common time frame for promotion to the management level is 15 years, often at the same firm. To rise to the executive level in the COO role, your prospects are greatly enhanced if you have a master’s degree. You will gain unique qualifications to take on operations challenges and the responsibilities of the COO role in today’s business environment.

The Haslam College of Business at the University of Tennessee, Knoxville offers an online Master of Science in Supply Chain Management (MSSCM) that provides comprehensive training for supply chain professionals.

Haslam’s MSSCM delves into the day-to-day issues that supply chain management professionals face on the job. As an online program, the coursework is flexible enough to accommodate working professionals. You can take classes full- or part-time and finish your course of study in 18 months to five years.

For management skills designed specifically for the C-suite, Haslam also offers an Executive MBA program for Global Supply Chain (EMBA GSC) that can be completed in less than a year. Minimal time away from work and immediate application of the concepts are core features that allow organizations to manage workstreams while expanding their supply chain discipline. You’ll meet leaders from some of the biggest and most influential corporations, and case studies provide the opportunity to hone advanced management practices for managing supply chain.

Our programs are taught by the same expert faculty members that are recognized through the Global Supply Chain Institute (GSCI) as industry experts. At Haslam, you’ll join a cohort of students from a range of industries and backgrounds. The support doesn’t end when you graduate. Haslam has an extensive alumni community, so the network you build during your studies will travel with you into your career.

You can become an influencer and a driver of your company’s achievements in the COO role. Haslam could be the next step toward your exciting future. Learn more about the online MSSCM and EMBA GSC today.