Supply Chain Management Education, Part 2

Stephen DeAngelis

December 16, 2011

Part 1 of this two-part series discussed the rising interest in Supply Chain Management (SCM) education. In this post, I’ll discuss what a few supply chain professionals believe needs to be done to ensure that graduates of SCM programs are equipped to tackle the jobs they land. Business consultant Ron Stappert put together a few thoughts after reading Victoria Taylor’s article in Bloomberg BusinessWeek (discussed in Part 1 of this series). [“Tomorrow’s Supply Chain Leaders – Do they know the fundamentals?” The 21st Century Supply Chain, 17 November 2011] What concerned Stappert was that Taylor reported, “Many of the current supply chain managers are transplants from other parts of their companies, with no formal schooling in the discipline.” He wonders, if supply chain executives can do their job without formal SCM education, are such programs really needed and what’s their value added?

In answer to the first question — are such programs really needed? — it should be pointed out that senior executives transplanted into supply chain management obviously have some leadership skills and business background. What they don’t have is supply chain knowledge and experience. To succeed, they must rely heavily on supply chain professionals. The answer to the second question — what is the value added of formal SCM programs? — is: If designed correctly, graduates from such programs have a steep learning curve when hired into entry-level positions. This can be a great benefit to employers. Stappert asks, “So what are the potential risks of filling these roles with managers from other parts of the business?” He continues:

“To understand the potential risks, one must understand the key ingredients which make C-Level Supply Chain Executives successful. A good white-paper written by William V. Fello and Peter Everaert for Korn/Ferry International, ‘The New Supply Chain Executive: Using the Integrated Supply Chain as a Competitive Weapon‘ lists five ingredients:

1) A seat at the strategic decision-making table

2) Cross-functional expertise and relationships

3) Strong customer and supplier relationships

4) A global mindset

5) Demonstrated success as a change-agent

“When you examine the list, two items stand out as the greatest potential risks: Cross-functional expertise and relationships and strong customer and supplier relationships. The reason is that it would be extremely difficult for someone who hasn’t spent significant time managing the supply chain to have a deep understanding of the supply chain processes and the internal motivations and politics of various customers and suppliers alike. The risk would be a supply chain strategy that lacked cohesion, recognized critical challenges, and lacked the commitment of sufficient resources. Often this results in a supply chain strategy that is nothing more than a disparate list of key initiatives.”

Although graduates of formal SCM programs don’t come fitted with relationships, they should have an excellent understanding of supply chain processes, best practices, emerging trends, and so on. Stappert realizes that if there were only negatives associated with placing a transplanted executive in charge of supply chains, companies would have stopped doing it long ago. So, he asks, “What are the potential rewards of filling these roles with managers from other parts of the business?” He continues:

“Back to the previous five ingredients, the very last one, demonstrated success as a change-agent combined the first ingredient, a seat at the strategic decision-making table can bring in a fresh approach and, with it, the commitment to see that approach to completion. Typically change-agents are self-described students. They study the problem, they take input, the examine alternatives, they weigh consequences, and then they create a vision. The vision is simple but it focuses the efforts of the team and prioritizes the commitment of resources. When you combine this with executive support, positive change is almost always the result. An excellent example of a change-agent coming from another business (though not a C-Level supply chain one) is Steve Jobs when he took over The Graphics Group which later became known as Pixar. His initial intent was for it to become a high-end graphics hardware company. Not that much of a stretch for a hardware guy. However, here was a smart, creative, driven technology change-agent who pointed his company in a new direction. What he needed to know, he learned. What he didn’t need to know, he appreciated the complexity and how it impacted his success. The people talent he needed, he found. If something didn’t work, he understood why and then went in a different direction. He established a vision and then changed the computer animation world forever. He was a change-agent who was also the head of the strategic decision-making table.”

Stappert sympathizes with the transplanted executive because he admits that he was one. As a trained engineer with military and manufacturing management experience, he said he thought he was “more than prepared for a new challenge when [his] Plant Operations manager asked [him] to take the newly created Inventory Control manager position.” I’ll let him explain, in his words, what happened next.

“The reality … was that I didn’t have a clue as to what I was doing or what I was getting myself into. Even worse, I was trying to establish inventory control in a factory that didn’t understand the meaning of the word ‘control.’ Fortunately for me, my boss had confidence in me and gave me time to learn and fill the void. What followed were countless hours of APICs training, materials management conferences, reading books on materials and supply chain management, trial and error in the real world, and, most importantly, understanding the fundamentals of the processes and how ingredients are needed to effect change.”

He admits he was fortunate to have an understanding and patient boss. Through hard work, Stappert was able to learn his trade. He would have been much better prepared, however, had he had the formal education being offered in today’s best universities. Stappert honestly admits that “fifteen years later, that very same company and plant, could ill afford to have someone so under-qualified in such a key role without jeopardizing their ability to consistently produce and meet financial expectations. A young smart guy with a lot of passion is no substitute for a highly qualified practitioner of supply chain management.” He concludes:

“Personally, I welcome more formally educated practitioners into the profession. My hope is that upon a strong formal educational, with time and additional experiences in the trenches, they will have the foundation needed to be in the next generation of C-Level supply chain positions. They will focus on substance and see through the smoke and mirrors. They will lead and innovate instead of turning the same levers and expecting a different result.”

One concern expressed by the editorial staff at SupplyChainBrain is that formal SCM programs could focus too narrowly on supply chain issues and ignore broader business-related subjects that make for a more well-rounded (and valuable) employee or executive. [“Educational Priorities for Future Supply Chain Leaders,” 12 August 2011] The article states:

“Supply chain MBA programs should give students a broad business education rather than being too narrowly focused on supply chain disciplines, says Thomas Speh, director of MBA programs at Miami University’s Farmer School of Business. ‘I favor a very broad-based program that gives students exposure to a lot more than just supply chain management, because they will be working in global environments and they will be interacting with C-level executives, so they need to be able to talk the language of CEOs and CFOs, which means they need exposure to areas like strategy, finance and leadership,’ says Speh.”

I wish Speh would have said that he favored a broad business education program for supply chain students because some of them would be moving into C-level positions not just “interacting with C-level executives.” Speh’s attitude reflects the fact that few supply chain professionals make it into the boardroom. For more on that subject, read my posts entitled S&OP: Supply Chain’s Foot in the Boardroom Door and C-Level Supply Chain Executives. The article continues:

“He also favors MBA programs with an experiential approach, rather than those that are centered on book learning and lectures. ‘In our MBA program, almost every course is based on case studies, with students analyzing cases, presenting to their peers and arguing with their peers,’ he says. ‘We also engage the students in internships, where they work one day a week throughout their entire course of study. They are out there having to do things, rather than simply reading a book and listening to a lecture.’ Technology is an important part of education today and students certainly come in with strong technology skills, he says. ‘What we want to teach them is how to strategically use technology. The focus is not on how to write code for a particular computer program, but on understanding where an application fits and how it can help them be better managers,’ he says.”

In Part 1 of this series, it was pointed out that companies are showing more interest in undergraduates with SCM majors than in individuals with graduate degrees but no experience. Speh seems to agree that getting an advanced degree makes more sense after you have some experience under your belt.

“The best supply chain MBA candidates are those who spend two to five years in the workplace before going after a post-graduate degree, says Speh. ‘These students come into the program with a much richer background, with questions, with an understanding of how an organization works and how the supply chain works. Students that come in straight from graduate school do not get the same richness from the program because they don’t have that context,’ he says.”

Stappert pointed out in his article that some supply chain managers don’t make an “investment in educating themselves.” Adrian Gonzalez believes that, whether an individual has been foramally educated in SCM or not, lifelong learning is a must. [“Learning and Leadership in Supply Chain Management: Is a New Model of Learning Required?” Logistics Viewpoints, 29 June 2011] He agrees with Ken Blanchard who stated: “When you stop learning, you stop leading.” The supply chain field is rapidly changing and formal educational programs will need to keep pace with those changes. I’m convinced that the best way to top of the corporate ladder is by placing that ladder on a firm educational foundation. I suspect that more and more universities are going to offer SCM programs that prepare students for the jobs that will help companies thrive in the years ahead.