Be a CSCO: Health system supply chain leader’s title matters more than ever

The title of most senior supply chain leader is elevating. Specifically, compared with Gartner’s 2019 (pre-pandemic) study, 33 percent of the leaders are now chief supply chain officers (CSCOs) as opposed to 24 percent just four years ago. At the other end of the spectrum, the top leader with the title of director is almost eliminated at only 3 percent of the role versus 11 percent in 2019. Progress.

But the real message is that having a CSCO leading supply chain brings lot of positives. How organisations get there is a different question.

Does the leader make the case? (Yes, sometimes) Or does the organization recognize the need and elevate the title? (Yes, sometimes).

The path matters less than the outcome. Organisations who elevate the title to CSCO see three powerful correlations: role transition, strategy development and ESG maturity.

One of the biggest challenges in healthcare provider supply chains is retention of the leader. Leader retention is a predictor of next level team member tenure as well. Elevating the lead role to CSCO usually means elevation of the direct reports to vice president from director.

It also creates compensation and career path development that is seen as positive in almost every organisation where it occurs. The above figure shows two big conclusions. One is that nearly half (48 percent) of supply chain leaders at healthcare providers we surveyed have been in their roles for fewer than three years.

The other is that only 29 percent are in their role for seven years. This is a massive issue. From our supply chain benchmarking study, we know that 36 percent of the cost of delivering care is tied to supply chain. We also know that the impact on service and patient outcomes is high as well. Leaving this role to turn over as it does is an industrywide challenge.

Of supply chain leaders surveyed, 56 percent without a CSCO title held their post for less than three years, compared to 32 percent who were CSCOs. Likewise, health systems are almost twice as likely to have kept their supply chain leaders for more than seven years if their title is CSCO. These are significant differences in a high-impact role.

Anecdotally, we also know that succession planning is lacking in many less mature health systems for supply chain leaders and that these roles can be open for six to 18 months when they go vacant.

Also, these CSCOs are more likely to have a long-term strategy in place and less likely to have no strategy or a one-year plan than non-CSCOs. Our Healthcare Supply Chain Top 25 study shows that organisations flourish when they consistently and proficiently build long-term supply chain strategies aligned to the health system strategy. Gartner data shows a strong correlation to expanded horizon strategy development on every measure.

The elevation of the role allows for VPs at the function areas of sourcing, logistics, clinical alignment and analytics that either push CSCOs to develop comprehensive strategies or give them the time to devote to planning. Either way, it is a win for the organisation.

Lastly, the role of ESG for healthcare supply chain is accelerating. Health systems are among the largest employers in many markets and supply chains play integral roles in delivering on ESG goals for organisations.

ESG maturity is positively correlated in every specific use case across supplier diversity, economic opportunity, community development, environmental sustainability and social determinants of health. This area is growing in importance for supply chains. We are reflecting it in our Top 25 ranking and many CEOs are aligning to the ESG Imperative. Supply chains lag here at their detriment and CSCOs are ahead of the pack.

The bottom line is that title matters. If you are a CSCO, awesome. If not, consider making the case to elevate your title in the organisation. 

This article was republished with permission from the Gartner Blog Network.