Developing Supply Chain Talents and Skills

Stephen DeAngelis

April 27, 2012

The folks at SCM-Operations note, “Logistics and Supply Chain Management is a relatively new discipline. It’s the crossroads of diverse subjects, covering various branches of business, management and engineering.” [“History of Logistics and Supply Chain Management [INFOGRAPHIC], March 2012] Because supply chain management involves so many diverse subjects, pundits routinely write about what kind education, talents, and skills current and future supply chain professionals require. The “infographic” below depicts how supply chain management has evolved over the past century and why maintaining a changing portfolio of skills is important to remain at the top of one’s game.

History of Logistics and Supply Chain Management

Bob Ferrari commented on a Wall Street Journal article that reported that the management development strategy for General Electric was changing from one where management personnel were exposed to a broad range of diverse businesses to a strategy that keeps them in one business longer so that they can gain deeper expertise in specific areas. Ferrari writes, “The reasons for this shift are those that many in our community have likely observed. The pace of global business requires a much more intimate knowledge of the aspects of customer needs, product development, supply chain tradeoffs and go-to-market strategies.” [“Supply Chain Management Competencies: Broad vs. Deep?” Supply Chain Matters, 26 March 2012] He continues:

“In our view, this trend is also a reflection on accountability, staying in a leadership position for the time to make longer-term initiatives successful and avoiding the constant ‘parachuting’ into and out of programs without a consistency in leadership and follow-through to initially targeted results. Broad initiatives directed at implementing a company-wide S&OP process, implementing advanced technology or shepherding a multi-year supply chain transformation effort can often lose momentum or perspective from frequent changes in leadership.”

Ferrari believes that it is time for the “supply chain community to reflect on the functional and leadership skills that are required in this new era of dynamic business change, globally extended supply chains and risk exposures.” He goes on to discuss what he believes are “required skills [that] reflect broad functional supply chain skills and deep business and program management skills.” He continues:

“Regarding functional knowledge, not everyone can effectively contribute within this new and faster clock speed of business without broader supply chain functional knowledge. That is why current certification programs offered by either APICS or CSCMP test on broad based functional knowledge in areas such as customer relationship management, procurement, planning, transportation and logistics, among other areas. The goal of certification is to reflect a fundamental baseline knowledge of the processes involved in the supply chain, and we would add, the newest price of admission into the function. Beyond acquiring certification are years of actual experience working within and across many supply chain functional areas in implementing business and functional program needs. Thus, broad supply chain horizontal skills and practical knowledge remain extremely pertinent to success.”

Speaking of certification, a new certification program targeted for non-degreed supply management professionals went into effect last December. The Certified in Supply Management (CSM) credential is offered by the Institute for Supply Management (ISM). [“New ISM Supply Management Certification for Non-Degreed Professionals Goes Live,” Supply Chain Digest, 6 December 2011] I agree with Ferrari that a balance of subject matter knowledge and managerial experience is the ideal. He concludes:

“At the management level, we submit that deep understanding of the business, effective communication to senior management, coupled with demonstrated leadership at implementing needed strategic, tactical and operational change are clearly new stakes for global supply chain leadership. It may be no secret that some current managers within individual functional domains have risen to leadership roles because of their deeper functional and tactical leadership skills vs. broader understanding of either supply chain multi-functional requirements or needs to directly integrate supply chain business process and information technology initiatives with required longer-term business outcomes. This is often where initiatives for ‘taking cost out of the supply chain’ conflict with ‘providing enhanced services’ for innovative new products. Tomorrow’s supply chains require leaders who can articulate how supply chain capabilities impact a required business outcome or desired metric of performance. They are leaders who build their resume on facilitating timely strategic and tactical change vs. multiple assignments implementing short-term objectives.”

Paul Teague insists that we need to worry about the skills of today’s supply chain managers as well as those of tomorrow’s managers. [“Talent development starts with you,” Procurement Leaders, 28 November 2011] Although he is writing specifically about procurement specialists, I think his advice is applicable across the supply chain sector. He writes:

“There has been a lot of talk … about the skills and knowledge that the next generation of procurement professionals will need to succeed, and how CPOs can attract and develop that future talent. But what about the skills and knowledge that current procurement managers need? CPOs need to address that issue too. And they can start by looking in the mirror.”

As an anonymous pundit once wrote, “Your schooling may be over, but remember that your education still continues.” I think that sentiment is at the heart of Teague’s message. His primary focus, however, is on developing people skills (i.e., the ability to make those around you better). He writes:

“As important as negotiation skills and financial knowledge are, pure people-management skills are essential. You need them to build a team and get team members to work together to achieve well-thought-out goals. Your managers do too. But, often, those management/leadership skills are missing at middle-and-top-management levels, sometimes in procurement, sometimes elsewhere. You don’t need to know the history of such infamous managers as Sunbeam’s ‘Chainsaw’ Al Dunlop to recognize the problem. … Even The Harvard Business Review, has said that management is often the least efficient activity in an organization. Don’t believe that? Just think of some of the characters you might have worked for yourself early in your career. Hopefully, most were supportive and role models. No doubt, though, some were idiots. As the Gallup polling organization has reported, people leave managers, not jobs.”

That’s a great quote! There is a reason that so much is written about leadership and management. People matter and yet too many executives seem to forget that truth. Teague concludes:

“In his excellent new book, Next Level Supply Management Excellence, Bob Rudzki, president of Greybeard Advisors and former procurement executive at Bayer Corp. and Bethlehem Steel, says that good managers successfully cope with complexity, but good leaders successfully cope with change. I agree, and add that you can’t be a good manager without being a good leader. In fact, I like to think of the word ‘leadership’ as an acronym for a series of management activities:

Listening to goals, concerns, and ideas of others, staff members and stakeholders alike

Empowering others to think and act creatively

Attacking the right supply chain problems

Defining clear objectives

Engaging in the detail to be sure you understand issues and to set an example

Revising and regrouping when reality collides with theory

Saluting those who perform well

Helping those who don’t so they can improve

Institutionalizing a collaborative mindset

Persuading everyone to believe that their job is the most important one in the company

“Management and leadership go hand in hand. So, besides looking for good future managers/leaders, develop the ones you have now, starting with yourself.”

Tony Pittman, director of global procurement at Hewlett Packard, told the editorial staff at SupplyChainBrain, “From sourcing to delivery, the supply chain is now the most horizontal function in the enterprise. And any role that has such wide-ranging impact, from how money is spent to affecting the customer’s experience, needs highly trained managers and workers.” [“Skills for Supply Chain 2.0,” 3 April 2012] The article continues:

“Most people have at least a general idea of what’s done by folks in finance, accounting, sales and marketing. But supply chain? Not so much, Pittman acknowledges, but that has been changing over the last 10 or more years. Whereas people may have thought of warehousing and transportation to some extent, now there is a better understanding of supply chain, if only because it touches so many areas of the enterprise. ‘The supply chain function has the capability to reach all parts of the enterprise, all customers, and all supply networks. It may be the most horizontal function in the enterprise today.'”

The fact that supply chain management is the most horizontal function in an enterprise affects the debate over the importance of “broad” knowledge versus “deep” knowledge. The scales still tip toward deep knowledge, but the offset over broad knowledge is not very much. The article concludes:

“[The supply chain] ‘function’ and its leaders are better positioned than ever before to have a strategic impact today. Companies that have risen to the forefront have done so, Pittman believes, in large part due to innovation, investment and capabilities in supply chain. How key is technology to supply chain success? ‘I really feel that while technology is important, sometimes the importance can be overdone,’ says Pittman. ‘Supply chain is a function that truly requires you to have good people, processes and technology. The most overlooked part of that equation is the people. Technology is very important and will always be, but is having a world-class supply chain hinging solely on technology? You must have the skills that people bring to the table, and the processes that your company can build on that. You can go with second- or third-tier technology and still rise to the top with the right people and processes.’ At the same time, it’s vitally important to develop skills in those employees.”

One might be surprised that an executive from a technology company would reiterate the importance of processes and people as well as technology; but, he is absolutely on target. Companies that forget that their people are really their most important asset are almost certainly not as good as they could be if they paid more attention to how to improve and use their human capital.