Supply Chain Management Education, Part 1

Stephen DeAngelis

December 15, 2011

Some interesting articles and posts have been written recently about supply chain management (SCM) education. Victoria Taylor is even bold enough to ask if supply chain management is “the next big thing.” [“Supply Chain Management: The Next Big Thing? Bloomberg BusinessWeek, 12 September 2011] She reports, “Hiring is strong for supply-chain managers and salaries are rising. No surprise that it’s an increasingly popular MBA option.” Taylor continues:

“Supply chain management—the acquisition of parts and raw materials, from purchasing to delivery—is not one of the classic B-school majors, for either undergraduates or MBAs. But job openings, comfortable salaries, and the prospect for advancement have caused the academic community to take notice, with more students majoring in the subject and more programs offering courses and concentrations in it. With such companies as H.J. Heinz and AnnTaylor Stores creating C-level supply chain positions in the past few years, more students are seeing career possibilities in the major.”

Of course, that comes as no surprise for supply chain professionals; but, it does surprise people who believe that traditional MBAs are the only way to the top. One of the schools that has an active supply chain management program is Arizona State University. In my last post on this subject [Interesting Students in a Career in Supply Chain Management], I mentioned a series of videos explaining supply chain management that was produced by Professor Eddie Davila, a member of the faculty at ASU’s Carey School of Business. For her article, Taylor interviewed William Verdini, an associate professor and chairman of the Supply Chain Management Department at Arizona State University’s Carey School of Business. He told her, “Businesses don’t compete; supply chains compete. Now, supply chain officers are getting in on the strategic decisions that are being made.” Taylor reports that supply chain management courses are getting so popular that students are now being turned away. She continues:

“Lehigh University’s College of Business and Economics is reporting the most undergraduate SCM majors in the program’s 10-year history. One of the major’s required courses, Supply and Cost Management, ended up turning students away when it was capped at 45 students last semester. The course’s previous enrollment high, in 2007, was 27 students. SCM has even piqued the interest of accounting students to the point that North Carolina State University’s Poole College of Management is exploring the possibility of establishing a supply chain concentration within its undergraduate accounting program. The number of freshman supply chain majors at the Carey School has doubled since the 2007-08 academic year. This year, there were 211 senior majors and 18 freshman majors. According to the Association to Advance Collegiate Schools of Business (AACSB), the number of undergraduate SCM programs has increased 25 percent since 2006. Almost half that jump happened during the 2009-10 school year.”

Those numbers are not large; which could be the reason that there are so many opportunities for graduates holding SCM degrees. Those opportunities are generating student interest. Taylor explains:

“Supply chain jobs are available out there. According to a survey by the National Association of Colleges & Employers, only 45.4 percent of business administration majors and 46.9 percent of accounting majors from the Class of 2010 job applicants received at least one offer. At Carey, 64 percent of undergraduate supply chain majors surveyed who graduated in December 2009 and May 2010 reported having a job at graduation. Supply chain management majors and MBAs are in demand. Carey reports a 100 percent placement rate for the supply chain MBAs who graduated in May, compared with 75 percent for marketing students. This year, more than 40 companies recruited Carey MBA grads specifically for supply chain jobs, and the biyearly SCM career fairs at Penn State University’s Smeal College of Business attract more than 60 different employers.”

Not only are jobs available but Taylor reports that are good paying jobs. She writes:

“Salaries are another draw. The Institute for Supply Chain Management’s 2011 survey shows that the average salary for supply chain management professionals is $103,664, up from $98,200 a year earlier. The average entry-level professional supply management salary is about $49,500, but the average salary of those with five or fewer years of experience is $83,689, up from $72,908 in 2010, an increase of nearly 15 percent.”

If you are a student thinking about a career in supply chain management, noted supply chain analyst Lora Cecere has some advice for you. [“Yes, Abby, there is a Santa Claus,” Supply Chain Shaman, 6 December 2011] First, however, she gives “thanks that academic programs are fueling the wave for the third generation of workers.” She notes, however, that “we are unsure what your world will look like” when you graduate. “We think that the forecast entry-level jobs will be rosy, but we are unsure of how SCM practices will evolve.” Below are “five pieces of advice” she thinks will help you on your journey to a career in supply chain management:

  • Get good at Math. SCM is a world where math geeks excel. Be proud of it, but learn how to use data to drive value-based outcomes. Think analytically, and use it to influence cross-functional groups. Data for the sake of data or math for the sake of math does us no good.
  •  It starts with Clarity of Strategy. I cannot count the times that I hear that it is about ‘people, process and technology.’ Yawn, I say. I think that the REAL secret to supply chain excellence is alignment on supply chain strategy. If this is done right, it is the foundational building block to aligning people, building processes and selecting technology. Without the clarity on what is supply chain excellence, the world circles, functional organizations cannot align, and the technologies never work. Help to forge clarity in the organizations where you go on supply chain strategy.
  •  Take what you have learned in School with a Grain of Salt. No two supply chains are the same, and no one company has it all figured out. Leave school with a solid foundation of the concepts, but realize that these practices are evolving. The real world is not as absolute as the writings of textbooks. Embrace the fact that SCM is ever-changing based on market drivers. Learn to think outside-in. Start first with what is happening in outside markets and then map the possibilities outside-in.
  •  Learn to ask the Hard Questions, but nicely. It is not a world for a ‘bull in a China Shop’, but there are a lot of paradigms that need to be broken. Learn to ask the tough questions, but with respect. Ask how processes evolved, and what they could become if we could improve data quality, reduce latency and build stronger cross-functional processes.
  •  Learn to Dance with the World of Gray. In SCM, there are no black and white answers. Success happens when you can take the world of gray and see patterns, build processes and forge bonds cross-functionally.”

Good higher education has always been about teaching students how to think and solve problems rather than providing them with rote answers. I think that is what Cecere is trying to say — learn how to think clearly and solve problems creatively. If you do, you’ll be an asset to any company you join.

You should also put a little thought into which school you should attend. In most fields, the reputation of the school often makes a difference to recruiters. Back in 2009, “AMR Research started a bit of SCM collegiate controversy … when it released a list of the top supply chain university programs.” AMR was acquired by Gartner last year and Gartner has revived the practice. [“Let the Debate Begin Anew! Gartner Ranks Top Supply Chain University Programs,” Supply Chain Digest, 20 July 2011] The article reports:

“An important and worthwhile change in 2011 is that Gartner this year broke the rankings into US undergraduate and graduate programs. There has been a call in many business circles for more emphasis on undergraduate programs to balance the more expensive hires coming out of the top graduate programs with positions for those with just undergraduate degrees who can begin at lower levels in the organization. The 2009 list was really a ranking of just the graduate university programs. Another change for 2011 is that, 25 graduate and undergraduate programs were ranked, versus just 19 graduate programs in 2009. This is likely both to be consistent in style to Gartner’s annual top 25 company supply chain rankings, and also because more universities participated in the program this year than in 2009.”

Like most lists that rate institutions of higher education, “a great deal of subjectivity [is] involved in such a ranking.” The article states that “Gartner did its best to quantify the process.” It explains how they did that for undergraduate programs:

“For undergraduate programs, the ranking used a weighted average of 40% for ‘undergraduate industry value’ (mentions as a top university program or recruiting spot based on a survey, having an internship requirement, and average starting salary of graduates); 20% on sheer program size (number of professors and students); and 40% for ‘program scope’ (how many of 11 key knowledge areas according to a Gartner framework does the program include?).”

I’m always skeptical of rankings based on surveys. It would be interesting, for example, to see if there is any correlation between respondents and their alma maters. Alumni can be myopic when it comes to rating their schools. I might have given a little less weight to the surveys and little more weight to content. Here’s Gartner’s list of the Top 25 Undergraduate Programs:

1. Penn State
2. Georgia Tech
3. Arizona State
4. Rutgers
5. Michigan State
6. University of Texas/Austin
7. Ohio State
8. University of Wisconsin/Madison
9. Texas A&M
10. Tennessee
11. Maryland
12. Western Michigan
13. Stanford
14. Lehigh
15. Marquette
16. Syracuse
17. Indiana
18. South Carolina
19 .Auburn
20. Texas Christian
21. University of Nevada/Reno
22. Kansas
23. North Texas
24. Iowa State
25. Rider

As you might imagine, many universities with highly ranked undergraduate programs are also ranked highly for their graduate degree programs. Here’s Gartner’s list of the Top 25 Graduate Programs:

1. Penn State
2. Michigan
3. Michigan State
3. Rutgers (tied for 3rd)
5. Arizona State
6. Syracuse
7. MIT
8. Ohio State
9. Georgia Tech
10. Tennessee
11. Stanford
12. Lehigh
13. University of Texas/Dallas
14. University of Wisconsin/Madison
15. University of Texas/Austin
16. Texas A&M
17. Indiana
18. South Carolina
19 .San Diego
20. Florida
21. Maryland
22. North Carolina State
23. Oklahoma
24. Kansas
25. Auburn

The Supply Chain Digest editorial staff concludes, “Accurate or not (and of course, the reality is that it is not measurable, though Gartner follows a pretty good methodology), universities will want to be seen as top programs regardless. We’d like to see some weight given to the level of actual productive research (not just academic papers) coming out of the faculty.” In Part 2 of this series, I’ll look at what some other supply chain professionals have to say about SCM education and what should be taught to students entering the field.