What the Strait of Hormuz crisis shows executives about supply chains
The crisis has exposed weaknesses that many companies still share. From chokepoints to sourcing strategies, here are takeaways for executives.   ...
Supply chain
Supply chain leadership in an age of upheaval
Volatility, technology, and talent are reshaping supply chain management.
Rapid read:
- Supply chain leadership has shifted from operational execution to strategic business leadership as disruption, geopolitical risk, technological change, and talent shortages expose the fragility of global supply networks. Companies such as Barilla and Unilever showed that resilience depends on rapid coordination and cross-functional decision-making rather than efficiency alone.
- The article identifies three leadership capabilities that are becoming essential and increasingly difficult to develop: mastering operational fundamentals, working across teams, and driving change under pressure. Outsourcing, matrixed organizations, and overreliance on digital tools risk weakening hands-on operational experience, just as companies need stronger leadership judgment and adaptability.
- Organizations can close this leadership gap through deliberate talent development. The article argues for experiential learning, job rotation, benchmarking, scenario planning, and broader career paths that combine operational depth with cross-functional exposure. It concludes that supply chain leaders also need greater influence at the executive level to help organizations navigate continuous disruption.
Supply chain management requires a new leadership playbook. Over the past decade, it has evolved from a back-office operation to a pillar of business continuity and growth.
As supply chains have become more complex and interconnected, the demands on leaders have increased dramatically. Volatility, cross-functional dependencies, rapid technological evolution, and mounting talent pressure are redefining what effective leadership requires.
Aside from these structural changes, recent disruption has also played its part. The COVID-19 pandemic, logistics bottlenecks, semiconductor shortages, the Ever Given blockage of the Suez Canal, armed conflict, sanctions, and tariffs have turned supply chains into a strategic business priority rather than a back-end operation. They have also exposed the weaknesses and vulnerabilities of hyper-efficient but inflexible global supply networks.
Some companies adapted quickly and gained ground, while others struggled to keep up. Barilla and Unilever simplified product portfolios during the pandemic to protect service, respond faster to demand, and demonstrate how cross-functional alignment has become critical for resilience, rapid decision making, and customer value delivery.
The leadership qualities demonstrated rest on three core skill areas in supply chain organizations: strong basics, the ability to work across teams, and the persistence to drive long-term change despite recurring short-term pressures. Unfortunately, these skills are becoming harder to build just when organizations need them most.
Master the fundamentals
The fundamentals of supply chain management remain critical. Quality control, lean processes, supplier management, cost efficiency, and compliance form the bedrock of operational excellence. These are prerequisites for resilience, agility, and sustained performance.
However, the rise of outsourcing and the proliferation of third-party logistics providers (3PLs) are depriving companies of traditional sources of operational experience. As they outsource production, logistics, and even planning, future leaders risk losing hands-on exposure to factories, product launches, and the daily realities of manufacturing. Without deep operational grounding, future leaders may lack the practical insight needed to diagnose problems, sharpen intuition, drive improvement, and respond effectively to crises.
Organizations must therefore prioritize the preservation and development of these capabilities, ensuring that future leaders gain direct experience across the value chain. This means investing in job rotation, field assignments, and exposure to core operational processes, especially as supply chain roles become more matrixed and distributed.
Take Henkel Consumer Brands. They have created an integrated, multi-category organization encompassing procurement, manufacturing, supply and demand planning, logistics, and customer service, all unified to drive operational excellence and sustainable value. In companies where these functions are more distributed, job rotation and internal alignment become more difficult.
At the same time, the current wave of digital transformation has triggered significant investment in agentic AI, machine learning, automation, and increasingly touchless processes. However, they do not reduce the importance of fundamentals. Without strong processes, reliable data, and a close connection to operational realities, new technologies can automate dysfunction rather than solve it. Digital tools are most valuable when they improve visibility and support faster managerial decision-making, not when they are treated as substitutes for judgment and integration.
Supply chain leaders must be able to “speak the language” of sales, marketing, finance, IT, and operations, and work across functions to create shared plans and drive coordinated action.
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Work across teams
A second essential capability is the ability to work across teams. Supply chain leaders must be able to “speak the language” of sales, marketing, finance, IT, and operations, and work across functions to create shared plans and drive coordinated action. This is especially important in Sales and Operations Planning (S&OP), where progress remains slow.
Long-term success depends on a seamless two-way exchange between these functions and external partners. Physical flows and data flows are intrinsically connected, so supply chain heads must be able to align with multiple functions, anticipate external shocks, and build trust-based partnerships across the ecosystem. Our supply chain survey results show that implementing S&OP remains a top priority precisely because it requires deep cross-functional collaboration and places supply chain more squarely in the boardroom.
Our research also shows that the companies that adapted best during disruption were those whose managers collaborated across business silos to remove complexity and focus on the right priorities. Future leaders must give the supply chain a voice in these discussions grounded in the realities and constraints of their industry. Earning this voice requires planning agility and a shared focus on actual customer outcomes. As Magdi Batato, former Executive Vice President, Head of Operations at Nestlé, expressed: “Agility can’t be achieved in silos. It depends on aligned goals and shared information – across internal functions and with external partners.”
Agentic artificial intelligence (AI), machine learning, digital twins, and control towers, while transforming supply chains, have at times raised unrealistic hopes of how quickly change can be achieved.
Drive change under pressure
The third critical skill is the ability to drive change under pressure. Companies need to make change happen in times of rolling crises: they need supply chain leaders who can quickly diagnose issues, align stakeholders, and drive coordinated action.
Compounding this is the relentless advance of technology. Agentic artificial intelligence (AI), machine learning, digital twins, and control towers, while transforming supply chains, have at times raised unrealistic hopes of how quickly change can be achieved. Leaders are under pressure to understand these forces and drive adoption to support business strategy and deliver results. Tesla has shown this is possible by responding to semiconductor shortages by rewriting its code to work on other chips.
Furthermore, talent shortages are making the problem worse. Fewer young professionals are attracted to factory and logistics roles, and there is an overemphasis on data and planning at the expense of hands-on experience. As centers of excellence shrink and innovation drivers are cut, organizations risk losing the very capabilities that made them agile and resilient. The challenge is not only to attract and retain talent, but to ensure that future leaders are equipped with the breadth and depth of experience needed to navigate a complex, interconnected supply chain landscape.
Continuous learning from external sources helps organizations avoid stagnation and adopt proven strategies.
How organizations can build these skills
Addressing the evolving needs of supply chain leadership requires a deliberate, proactive approach to talent development and organizational design. The following strategies are essential:
- Experiential learning and job rotation: Provide future leaders with hands-on experience in factories, distribution centers, planning, sourcing, and product launches. Rotate high-potential employees through diverse roles to build operational fluency and cross-functional understanding. Rachel Sheehan, Global SVP Supply Chain Talent at Coty, has warned that factory experience remains essential even as functions are ever more centralized and matrixed. She notes that leaders who have never worked in a factory may not understand operational realities.
- Benchmarking and best practice sharing: Encourage leaders to benchmark against industry peers and learn from both leaders and laggards. Continuous learning from external sources helps organizations avoid stagnation and adopt proven strategies. Unilever used simplification and cross-functional focus to respond faster to pressure when it limited Marmite production to one jar size to preserve supply continuity.
- Field visits and collaborative scenario planning: Organize regular field visits to factories, suppliers, and logistics hubs. Engage in joint scenario-planning exercises with internal and external partners to build shared understanding and prepare for disruptions.
- Exposure and career path development: Organizations must design career paths that balance technical depth with broad business exposure. Leaders need experience not only in planning and analytics, but also in sourcing, manufacturing, and cross-functional coordination. Our research suggests that broader roles, such as demand planning and new product introduction coordination, are becoming increasingly important, while certifications and structured development programs can help professionals build credibility and support career transitions.
Conclusion: A call to action
The demands of supply chain leadership have changed fundamentally. In a world defined by volatility, complexity, and rapid technological change, organizations can no longer rely on legacy leadership models or static career paths. Preserving core capabilities, strengthening the link between management and execution, and investing in the next generation of leaders are now essential for resilience and growth. By embracing experiential learning, fostering cross-functional collaboration, and aligning technology adoption with business needs, organizations can build more resilient and adaptive supply chains. Perhaps most importantly, supply chain leaders need greater agency and stronger representation in the C-suite to drive the required changes.
Authors
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