Supply Chain Management
Behold leaf-cutter ants! The leaf-cutters themselves cut leaves from
rainforest trees into manageable pieces. The forager ants carry the
pieces—each hauling up to 30 times its own body weight—in a perfectly
ordered line back to the gardener ants, who continue the work of the
colony. As a species, humans have no such innate sense of how to move
products from their source to end users. Supply chain managers create
processes for businesses to do what ants do naturally: They attempt to
integrate and optimize all the steps required to produce the right amount
of the right product and deliver it to the end user at the right time. In
other words, supply chain management (SCM) is involved in every aspect of
getting products to customers, from raw materials to consumption. As an
insider puts it, "Supply chain management is interested in everything
that happens to a product from cradle to grave."
The focus of this profile is on those industries for which supply chain
management is essential to remain competitive in the marketplace:
manufacturing, retail, and logistics and distribution. Manufacturing
companies typically emphasize materials management and sourcing functions.
Retail and logistics companies emphasize logistics, warehousing, and
inventory management.
What You'll Do
Job descriptions in supply chain management suffer from blurred
responsibilities associated with specific titles, a lack of standard
nomenclature for positions, and, often, a lack of distinction between
ranks. As perhaps is fitting for a discipline that is nothing if not
interdisciplinary, the job description of a role may encompass a number of
disciplines. For instance, in a manufacturing firm, inventory management
responsibilities might be handled by a procurement or purchasing role; in a
logistics firm, a transportation role might oversee those same duties.
Unlike in the field of consulting, where the differences between analyst
and associate/consultant are nearly universally understood, a single role
in supply chain management might be called analyst, specialist, or
coordinator, depending on the caprices of the company that set out the
requisition for that position.
Who Does Well
Firms with major SCM components typically have a Six Sigma mentality and
are looking for candidates with a built-in understanding of quality. You
should be meticulous in every part of your self-presentation. You also need
to be able to communicate. "That's really what we're looking
for. If you can't communicate your solution to anyone, how is it a
solution?" an insider says. Moreover, people skills are paramount and
political savvy is key—as a supply chain manager, you're very likely to
be working with people who have been on the job 30 years longer than you
and possibly with little advanced education. This means you'll need the
ability to deal with people from a wide range of backgrounds.
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In general, SCM recruiters are not looking for generalists, even at the
entry level. Most firms and organizations have a select group of SCM
programs from which they recruit, such as Arizona State and the University
of Wisconsin at Madison. If you aren't in a school at which the firm
recruits, an internship might get you in the back door. Because the market
is soft now, firms are demanding industry and functional experience even
for entry-level positions. In the MBA world, firms look for supply chain
coursework or dedicated supply chain programs.
Certifications aren't required, but they do help in a slack market.
Common certificates are Certified Purchasing Manager (CPM) and CPIM
(Certification in Production and Inventory Management). More than one
quarter of all purchasing professionals hold a CPM certification, and
nearly 10 percent hold a CPIM certificate.
Clearly, proficiency in an enterprise resource planning (ERP) software
package such as SAP, Oracle, or i2 greatly enhances your marketability.
Detail orientation is always a prerequisite for supply chain jobs—you
can't overdo attention to detail when communicating with prospective
employers, either in informal conversations or during the interview
process. Finally, because of the cross-functional nature of the field,
communication and people skills are paramount.
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According to the 2006-07 Occupational Outlook Handbook from the U.S. Bureau
of Labor Statistics (BLS), supply chain management jobs are expected to
grow more slowly than average through 2014. Not surprisingly, significant
declines in the manufacturing sector should greatly affect the amount of
supply chain management positions available in the United States in the
near future.
While no role clearly outshines others in terms of employer demand, more
and more companies are reorganizing around supply chain management (as
opposed to logistics or materials), so supply chain manager roles are
becoming more prevalent.
Candidates should find many opportunities in the health-care sector, the
country’s largest industry that's experiencing explosive growth. Look
for opportunities in burgeoning subsectors such as specialty
pharmaceuticals, biotechnology, and medical device manufacturing.
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While there is no single career trajectory in supply chain management, most
insiders we spoke with agree that the apex of the supply chain cosmos is
vice president of supply chain management. The path has yet to be blazed
from supply chain manager to COO, let alone CEO. In the past this has been
due to the fact that logistics positions have been very specialized roles.
More recently, roles in supply chain management have become more
cross-functional, but the field has yet to gain traction as a set career
path in most corporations.
Having said that, here are a few of the general career tracks one can
follow in supply chain management:
Supply Chain Manager
The supply chain manager role is the holy grail of supply chain management
and logistics, both sought after and somewhat rare. The scarcity of pure
supply chain manager roles comes from the fact that the role is
interdisciplinary—a role that spans logistics and distribution, purchasing,
manufacturing, inventory management, and even marketing and product
development.
The supply chain manager reviews existing procedures and examines
opportunities to streamline production, purchasing, warehousing,
distribution, and financial forecasting to meet a company's needs. A
supply chain manager typically develops strategies to cut costs, improve
quality, and increase customer satisfaction.
Vice President, Supply Chain Management
At the top of the SCM food chain, the vice president is part of the senior
management team and usually reports to the COO of a company. The vice
president's purview often includes all supply chain functions,
including logistics, facilities, and purchasing. The vice president
translates executive strategies into supply chain functions. Directors of
the various functional areas in the supply chain typically report to the
vice president.
Production Analyst/Manager
Production managers serve as mini-plant managers in a manufacturing
company. Their responsibilities include coordinating production schedules,
forecasting labor requirements, maintaining quality, determining material
requirements, and managing finished goods inventory/output.
As with most manufacturing positions, many companies seek people with Six
Sigma and lean manufacturing experience. The career path in production
management might be two to four years as an analyst, another two to four
years as a production or plant manager, then possibly on to director-level
roles.
Logistics Analyst/Manager
Analysts and managers work on a wide range of logistics functions,
including warehouse and distribution operations, forecasting, planning,
logistics information systems, customer service, and purchasing. Analyst
roles might deal with an area within the logistics function, while senior
roles such as manager or director involve overseeing a team of analysts.
Managers negotiate and contract with suppliers and carriers, develop supply
chain metrics and strategy, and oversee day-to-day management of logistics
functions. Analysts devote much of their time to problem solving,
forecasting, and ensuring that operations are running within determined
metrics.
The ladder to a manager-level position might take five to seven years to
climb, and to a director level or higher, ten to fifteen years.
Process Engineer
Process engineers typically analyze processes within any number of
industries—manufacturing, distribution and transportation, or retail—and
develop improved processes that make better, safer use of labor, materials,
energy, and other resources. For instance, a process engineer in a
distribution center might work to improve outbound and inbound traffic
processes or invoice handling. In a manufacturing environment he might
develop a better method for handling raw materials. Additionally, he might
develop the metrics used to manage the processes once they've been
improved.
Account Specialist/Customer Service
The account specialist/customer service role is typically an entry-level
position for newly minted SCM majors. A specialist typically works at a
logistics or transportation firm and is assigned a customer for whom she
serves as primary contact. Typical duties include resolving customer
service issues for a client, building relationships with clients and
carriers, and coordinating shipments for the client.
Supply Chain Consultant
The consultant is a senior role, usually post-MBA, which, along with the
analyst and project manager, makes up the team on a consulting engagement.
The supply chain consultant is a rare and desirable role in the field,
whose function is to review existing procedures and examine opportunities
to streamline production, purchasing, warehousing, distribution, and
financial forecasting to meet a company's needs. An SCM consultant
typically develops strategies to cut costs, improve quality, and improve
customer satisfaction.
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One of the best things going for supply chain jobs is that they are often
in low cost-of-living locations. While graduates flock to publishing and
media and other "sexy" jobs that don't cover bar tabs in
cities whose costs of living edge up toward that of Tokyo, the
manufacturing industry pays solid salaries in areas that don't require
a platinum card to buy groceries.
Starting salaries for recent college grads for most positions tend to pay
between $35,000 and $55,000. MBA salaries tend to start at $75,000 to
$90,000, but it's not unheard of for these to dip below $65,000,
especially for people with little prior experience.
The industry does pay bonuses based on individual performance, but the
lackluster economy has eroded a large chunk of incentive compensation. Even
in good times, bonuses would be closer to 10 percent of base salary.
Salaries for manager-level positions reach approximately $100,000,
directors approximately $165,000. Salaries for vice presidents top out at
approximately $265,000.