We've heard the lament for some time now. Why don't our chief executives understand the real value that our department brings to the organization?

The particular functional area in question could be logistics, warehousing, purchasing, or any one of a number of others involved in bringing goods to market. Or it could be the whole process of supply chain management itself.

The answer, which we probably suspected all along, is forcefully articulated in the opening article by Stephen Timme and Christine Williams-Timme. The founders of FinListics Solutions stress that you need to position the value of what you do in terms that the "C-level" executives—chief executive and financial officers—will understand. That means demonstrating the clear and quantifiable impact of supply chain initiatives on the key financial metrics of growth, profitability, and capital utilization.

Not every chief executive or financial officer, of course, is unaware of the financial-SCM connection. In fact, more and more are beginning to recognize supply chain design and execution as a core business capability. MIT professor and Clockspeed author Charles H. Fine argues that the supply chain is the ultimate core capability. He believes that the companies that know how to put together chains of capabilities for temporary competitive advantage—and then quickly reconfigure those capabilities for the next round of temporary advantage—are emerging as the true business leaders.

There are at least two other components of supply chain success, as other authors in this issue remind us.

One is to have the key enabling processes in place. As Harvey Dershin notes, most companies spend a great deal of time and resources on their information processes and pay at least some attention to their physical processes, such as manufacturing and transportation. Where they fall short, says this advocate of the Juran quality principles, is in designing the business processes. Yet these must be firmly in place, Dershin notes, if supply chain initiatives are to realize their intended benefit.

Innovation is another component of success. As David M. Bovet and Joseph A. Martha underscore in an excerpt from their new book, Value Nets, certain innovators are challenging the wisdom of the conventional linear supply chain. They are instead creating fast and flexible networks of customers and suppliers that capture actual customer choices in real time and then immediately convey that information to the supply chain partners. These innovators are proving that the value-net approach delivers important customer and shareholder benefits.

Collectively, the articles and insights inside make one point abundantly clear: Supply chain success is a multidimensional phenomenon, incorporating a mix of processes, people, and partners. If any one of these elements is missing or if the enthusiasm of any party is less than genuine, the supply chain initiative will be diminished accordingly. Nowhere is the commitment any more important than at the top. And this takes us right back to the beginning—the absolute necessity of making the financial-supply chain management connection.

617-558-4468, fquinn@cahners.com