Logistics Quarterly Magazine - Volume 16, Issue 3, 2011

THE PROCESS VIEW OF SUPPLY CHAIN MANAGEMENT

David J. Closs
Michigan State University

From the perspective of the University Career and Placement Centers, demand for entry level supply chain professionals has definitely increased over the past year. There are an increasing number of firms making corporate presentations and signing up for interviews. They are also seeking to enhance their brands on campus through classroom involvement, classroom case presentations, and competitive judging. Some students are even seeing multiple offers, which is an experience that has not been common recently.

Over the past year, I have also observed another less obvious trend. This observation has resulted from discussions with recruiters as well as fellow academics from other universities. This trend reflects increased interest for supply chain talent that has been trained with a process rather than functional perspective of supply chain management (SCM). Traditional academic programs that have trained SCM professionals have evolved from strong academic programs that have focused on purchasing, operations management, production, logistics, or transportation. In other cases, universities have shifted the focus from decision analysis or operations research faculty toward supply chain management. The result of this tradition has been programs that are labeled as SCM but are really quite narrow in their perspective. Figure 1 illustrates how this structure can meet company objectives but it may not be the best approach for firms when they need to meet increasingly demanding customer requirements.

FIGURE 1

 

In my discussions with human resource managers who recruit at Michigan State University (MSU) and other universities, it is apparent that they are looking for both deep and broad talent. The deep talent can be from the traditional academic programs that focus on one of the traditional disciplines, including purchasing, manufacturing, and logistics. However, just as many firms are restructuring their supply chain organizations to execute the critical processes identified in Table 1, these firms also need talent that have the breadth of knowledge to efficiently and effectively manage these integrated processes. These processes enable the integrated supply chain, involving both the firm and its supply chain partners, to meet unique customer requirements through: 1) balancing supply and demand (demand planning responsiveness); 2) customer service (customer relationship collaboration); 3) order fulfillment (order fulfillment/service delivery); 4) new product development (product/service development launch); 5) manufacturing (manufacturing customization); 6) supply management (supplier relationship collaboration); 7) life cycle (life cycle support); and 8) reverse logistics (reverse logistics).

TABLE 1

 
Source: Donald J. Bowersox, David J. Closs, M. Bixby Cooper. (Supply Chain Logistics Management, 3rd Edition. (McGraw-Hill Publishing, 2010).

Universities are beginning to recognize that their programs need to be refined to meet the needs of recruiters for broader SCM skills. These changes include: 1) academic curricula that includes a more comprehensive perspective of the activities required to execute SCM processes; 2) experience in evaluating cross-functional trade-offs employing multiple service and cost dimensions; and 3) an understanding regarding how SCM processes can enhance a firm’s competitive advantage.

While there is still a need for supply chain professionals to understand critical operational functions, the educational experience needs to include case studies and executive presentations that illustrate the trade-offs associated with SCM competitiveness and strategies. Over the past year at MSU, we have had many executives who have come to classes with live cross-functional cases with a request that student teams spend time prior to the class discussing the trade-offs involved in the decisions. In effect, the students are asked to replicate the decision breadth that the executives face for their firms. Just as the executives are challenged when they address the problem for their firms, the student teams consider decisions involving all the processes identified in Table 1. During the discussions, the student teams begin to understand how firms have to integrate processes both internally and with their supply chain partners and how they can use SCM as a strategic weapon. One student demonstrated the benefit of such an approach when he made the observation, “Now I understand why it was so important that all the processes be coordinated.” Just as industry has refined their organization to facilitate process integration, it will become increasingly important that university programs shift as well.