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Career Overview
Behold leaf cutter ants. At the command of the queen, theants march in lock step, cut leaves from rainforest trees, and, in a perfectlyordered line, carry the right number of tasty leaves in their mandibles to adiscerning queen back in the colony. As a species, humans have no such innatesense of how to move products from their source to end users. Supply chainmanagers seek to create what ants do naturally: They attempt to integrate andoptimize all the steps required to produce the right amount of the rightproduct 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 productsto customers, from raw materials to consumption.
What You'll Do
As an insider defines it, “Supply chain management is interested in everythingthat happens to a product from cradle to grave.” Whereas the field of logisticswas born in World War II as part of the effort to get the right amount ofsupplies to the troops at the right time, supply chain management took thenovel approach of looking further back into the life of a product to itsmanufacture and even product design while integrating what were once thought ofas unrelated disciplines, marketing and customer service.
The focus of this profile is on those industries for which supply chainmanagement is essential to remain competitive in the marketplace:manufacturing, retailing, and logistics and distribution. Manufacturingcompanies typically emphasize materials management and sourcing functions.Roles within the retail and merchandising industries tend to emphasizelogistics, warehousing, and inventory management. Like retailers, the roles oflogistics firms emphasize, what else, logistics, inventory management, andwarehousing. Most larger firms offer the entire range of logistics servicesfrom transportation and carrier services to warehousing and inventorymanagement.
Job descriptions in supply chain management suffer from a blurring ofresponsibilities over titles, a lack of standard nomenclature for positions,and, often, a lack of distinction between rank. In the first case, as perhapsis fitting for a discipline that is nothing if not interdisciplinary, the jobdescription of a role may encompass a number of disciplines. For instance, in amanufacturing firm, a procurement or purchasing role might include inventorymanagement responsibilities; in a distribution or logistics firm, atransportation role might include those inventory management responsibilities.
Unlike the field of consulting, where the differences between analyst andassociate/consultant are nearly universally understood, a single role in supplychain management might be called analyst, specialist, or coordinator, dependingon the caprices of the company that set out the requisition for that position.
Who Does Well
Firms have a Six Sigma mentality and are looking for candidates with built-inquality. You should be meticulous in every part of your self-presentation. Youalso need to be able to communicate. “That’s really what we’re looking for. Ifyou can’t communicate your solution to anyone, how is it a solution?” aninsider says. Moreover, people skills are paramount and political savvy iskey—as a supply chain manager, you’re very likely to be working with people whohave been on the job 30 years longer than you and possibly with little advancededucation. This means you need to be able to deal with people unlike yourself.
Requirements
In general SCM recruiters are not looking forgeneralists, even at the undergraduate level. Most firms and organizations havea select group of programs from which they recruit, and those programs, such asArizona State and the University of Wisconsin at Madison, tend to offer degreesin supply chain management. If you aren’t in a school at which the firmrecruits, an internship might get you in the back door. Because the market issoft now, firms are demanding industry and functional experience even forentry-level positions. In the MBA world, firms look for supply chain courseworkor dedicated supply chain programs.
Certifications aren’t required, but they do help in a slack market. Commoncertificates are Certified Purchasing Manager (CPM) and CPIM (Certification inProduction and Inventory Management). Nearly one quarter of purchasingprofessionals hold a CPM certification, and nearly 10 percent hold a CPIMcertificate.
Clearly, proficiency in an enterprise resource planning (ERP) software packagesuch as SAP, Oracle, or i2 greatly enhances your marketability. Detailorientation is always a prerequisite for supply chain jobs—you can’t overdoattention to detail when communicating with prospective employers, either ininformal conversations or during the interview process. Finally, because of thecross-functional nature of the field, communication and people skills areparamount.
Job Outlook
After the economy picked up and real salaries increasedin 2003 and 2004, the outlook for supply chain management in 2005 lookshealthy. However, in the case of midcareer job seekers, most companies look forcandidates with coursework in supply chain management or prior industry andfunctional experience. These prerequisites limit the number of qualifiedcandidates in the field.
While no role clearly outshines the others in terms of employer demand, moreand more companies are reorganizing around supply chain management (as opposedto logistics or materials) and so supply chain manager roles are becoming moreprevalent.
Look for opportunities in burgeoning subsectors such as specialtypharmaceuticals and medical device manufacturing.
Career Tracks
While there is no single career trajectory in supplychain management, most insiders we spoke with agree that the apex of the supplychain cosmos is vice president of supply chain management. The path has yet tobe blazed for supply chain managers who attain the ranks of COO, let alone CEO.In the past this has been due to the fact that logistics positions have beenvery specialized roles. More recently, supply chain has been a cross-functionalrole and has yet to gain traction as a set career path in most corporations.
The good and bad news is that supply chain roles are highly specialized. Notonly is it somewhat difficult to cross over mildly different functional roles,but functional knowledge doesn’t transfer completely across industries. Thismeans that one can’t easily hop from one industry to the next—for instance, asa supply chain manager for Wal-Mart to one for BMW. While this means it isdifficult to easily transfer across functions, it also means that there arefewer candidates nipping at your heels ready to take your job.
Having said that, here are a few of the general career tracks one can follow insupply chain management:
Supply Chain Manager
The supply chain manager role is the holy grail of supply chain management andlogistics, both sought after and somewhat rare. The scarcity of pure supplychain manager roles comes from the fact that the role is interdisciplinary—arole that spans logistics and distribution, purchasing, manufacturing,inventory management, and even marketing and product development.
The supply chain manager reviews existing procedures and examines opportunitiesto streamline production, purchasing, warehousing, distribution, and financialforecasting to meet a company’s needs. A supply chain manager typically developsstrategies to cut costs, improve quality, and improve customer satisfaction.
Vice President, Supply Chain Management
At the top of the supply chain management food chain, the vice president ispart of the senior management team and usually reports to the chief operatingofficer of a company. The vice president’s purview often includes all supplychain functions, including logistics, facilities, and purchasing. The vicepresident translates executive strategies into supply chain functions.Reporting to the vice president, often, are directors of the various functionalareas in supply chain.
Production Analyst/Manager
Production managers serve as mini-plant managers in a manufacturing company.Their responsibilities include coordinating production schedules, forecastinglabor requirements, maintaining quality, determining material requirements, andmanaging finished goods inventory/output.
The position often leads to roles as plant manager and often to executiveoperational roles, such as COO. As with most manufacturing positions, manycompanies seek people with Six Sigma and lean manufacturing experience. Thecareer path in production management might be 2 to 4 years as an analyst,another 2 to 4 years as a production manager, then on to director-level roles.
Logistics Analyst/Manager
Analysts and managers work on a wide range of logistics functions, includingwarehouse and distribution operations, forecasting, planning, logisticsinformation systems, customer service, and purchasing. Analyst roles might dealwith an area within the logistics function, while senior roles such as manageror director roles involve overseeing a team of analysts. Managers negotiate andcontract with suppliers and carriers, develop supply chain metrics andstrategy, and oversee day-to-day management of logistics functions. Analystsdevote much of their days to problem solving, forecasting, and ensuring thatoperations are running within determined metrics.
The ladder to a manager level position might take 5 to 7 years to climb, adirector level or higher position 10 to 15 years.
Process Engineer
Process engineers typically analyze processes within any number ofindustries—manufacturing, distribution and transportation, or retail—anddevelop improved processes that make better, safer use of labor, materials,energy, and other resources. For instance, a process engineer in a distributioncenter might work to improve outbound and inbound traffic processes or invoicehandling. In a manufacturing environment he might develop a better method forhandling raw materials. Additionally, he might develop the metrics used tomanage the processes once improved.
Account Specialist/Customer Service
The account specialist/customer service role is typically an entry-levelposition for newly minted supply chain management majors. A specialisttypically works at a logistics or transportation firm and is assigned acustomer for whom he serves as primary contact. Typical duties includeresolving customer service issues for a client, building relationships withclients and carriers, and coordinating shipments for the client.
Supply Chain Consultant
The consultant is a senior role, usually post-MBA, that, along with the analystand project manager, makes up the team on a consulting engagement. The supplychain consultant is a rare and desirable role in the field of supply chainmanagement. The SCM consultant reviews existing procedures and examinesopportunities to streamline production, purchasing, warehousing, distribution,and financial forecasting to meet a company’s needs. An SCM consultanttypically develops strategies to cut costs, improve quality, and improvecustomer satisfaction.
Compensation
One of the best things going for supply chain jobs isthat they are often in low-cost-of-living locations. While graduates flock topublishing and media and other “sexy” jobs that don’t cover bar tabs in citieswhose costs of living edge up with that Tokyo, the manufacturing industry payssolid salaries in areas that don’t require a platinum card to buy groceries.Starting salaries for undergraduates for most positions tend to pay between$35,000 and $55,000. MBA salaries tend to start at $70,000 to $85,000, but it’snot unheard of for MBA salaries to dip below $50,000, especially for people withlittle prior experience.
The industry does pay bonuses based on individual performance, but thelackluster economy has eroded a large chunk of incentive compensation. Even ingood times, bonuses would be closer to 10 percent of base salary.
Salaries for manager-level positions reach approximately $95,000, directorsapproximately $150,000. Salaries for vice presidents top out at approximately$200,000.
The supply chain function isn’t one for people trying to strike it rich. Aninsider adds, “I wouldn’t trade this life for one of 80-hour weeks and doublethe pay.”
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