Supply Chain Graduates: Now What?
Top-performing supply chains focus on attracting and retaining talent—both technical ability and leadership. Here's how to find and nurture true supply chain competency.
We can all easily describe the attributes of top-performing supply chains. But can we as easily identify the skill sets and leadership qualities of the people who drive those operations?
The skill sets of supply chain managers typically follow two tracks. One track relates to technical skills; the other to leadership, which may include deep knowledge in one or more supply chain disciplines, and enough expertise in the others to lead a major portion of the business.
In the case of both skill sets, universities and businesses need to work farther upstream to reach younger talent and demonstrate the career opportunities available in supply chain management, says Lamar Johnson, executive director, University of Texas-Austin. High schools also need help in recognizing the career's potential and developing programs to train students in the technical skills employers crave.
Universities must have the ability to teach technical skills, but graduates won't come out with full mastery in any one area, Johnson suggests. To supplement formal education, companies need to develop training and education programs that build skills. These efforts will help them identify and develop supply chain management leaders.
Companies often fall short in this regard, according to doctoral student Trish Gibson, whose research shows that companies don't have good "induction programs" and ongoing professional learning. "Employers who complain of a skill gap among new graduates are suffering from amnesia," she says. "They are falsely remembering their own newly graduated selves as fully formed, and able to solve every problem in any business that would hire them."
Most new graduates lack life experience and confidence (though they may very well exhibit over-confidence in some of their own abilities). "Businesses can't expect 45-year-old heads on 23-year-old shoulders," Gibson says.
Johnson agrees. "Students who earn an undergraduate degree are 22 years old," he says. "There are things they don't know. They haven't hired or fired anyone. They haven't had enough life experience."
Universities can only go so far because they offer merely a classroom environment. "The only way to learn how to lead an organization is to get out and lead one," Johnson says. "You have to start by leading a small operation, then larger ones." Internships can help students gain some real-world experience, but the opportunities are still limited.
"Universities can assemble the ingredients, and may even stir them a bit, but employers have to finish baking the cake," Johnson says. Universities need to offer programs that develop promising leaders' deep-discipline technical skills, then move them to another supply chain discipline to develop a similar deep technical skill. After that, future leaders would move through various supply chain disciplines, gaining sufficient advanced-level skills.
Corporations play an ongoing role for individuals following the technical track. An individual who chooses to become a technical expert in one area, such as procurement or logistics, would remain in that field but develop some deeper knowledge and supplemental skills that will prove valuable in a supply chain environment.
First Job Skills: A Tall Order
Ideally, the supply chain career progression starts early, in high school, and continues through university education, and into the corporate setting. After all that training, what should new supply chain management graduates bring to their first corporate jobs?
"Statistical math skills, forecasting education, operations management education, an understanding of accounting, negotiation research ability, Excel skills beyond the basics, process mapping skills, inventory/materials management comprehension, logistics understanding, and procurement know-how," says Steven R. Killmer, purchasing consultant for global petroleum company Saudi Aramco.
That's a tall order, and it only includes hard skills. Soft skills such as public speaking and PowerPoint presentation experience, emotional intelligence, and strong writing ability are also necessary.
Soft skills, especially interpersonal communications, are a growing part of the debate about skill gaps in supply chain management. Those soft skills, and others, are part of Johnson's leadership track, but he adds them to the technical career track as well.
"Leaders need to be able to interface with the CEO, the CFO, and other disciplines," he says. "A technical procurement expert should also have that ability."
Many of the soft skills companies value, which fall under the banner "emotional intelligence," are illusive and difficult to define or measure. But that doesn't mean it's impossible. Michigan State University, for example, uses a mixture of psychometric tests, one-on-one interviews, and group discussions/problem-solving exercises as part of its graduate selection process, according to Nicholas Little, assistant director of executive development programs at Michigan State University's Broad College of Business.
Soft skills can be taught in the classroom as part of a larger course, but in some ways it may be too early in "work life" for a supply chain student to appreciate, understand, and implement the nuances of emotional intelligence. "We do, however, teach emotional intelligence in our undergraduate Hospitality Business program because it can have a huge impact on customer service," Little notes.
Companies tend to want both hard and soft skills in full measure. They scour manufacturing and other functions looking for talent who can manage across disciplines, but "it's the wrong time to do it," Johnson says. They need someone with overarching experience who can be trained in the vertical disciplines.
Finding the Perfect Fit
Most companies will face a training gap between what they need and what recruits are capable of; this gap will vary by company and job.
"Some companies realize they will never find the perfect fit, and know that new-graduate recruits should receive broad training instead of focusing on just one job," says Little. "Those companies have developed rotational development programs for new-graduate hires to prepare them for future leadership. The programs expose them to many different parts of the supply chain during a long-term induction to the company."
The ideal program is for a supply chain graduate to spend a few years developing deep skills and expertise in a core area, then work toward an advanced skill level in other disciplines. At the same time, the individual needs to learn leadership skills. It's a long process, and, Johnson admits, there's a risk that an individual will be hired away before completing the full development process.
"Any company trying to develop leaders takes a risk," says Johnson. "But despite the chance of losing employees, companies still need to train."
Some companies may decide to buy talent instead—probably from a company that has a training and development program, he adds.
People who want to advance may decide to return to school and get the skills they need. "But I don't know of a single company that guarantees a promotion after earning an MBA," Johnson notes. "Instead, they say, 'Earn the degree, show us what you can do with these new skills, then we'll see.'"
Small Companies, large challenges
The training and development process sounds good for large companies with plenty of resources who are willing to reap the benefits while risking losing talented individuals before they realize their full potential. But what about small and medium-sized enterprises (SMEs)?
SMEs don't always have the in-house expertise or the money to search for, select, and hire skills and competencies the way larger global companies can, says Freek Brilleman of Netherlands-based BeSCOPE Consultancy.
But SMEs do have the resources to provide the right training. "They only have to prepare better," he insists. "With proper planning and preparation, SMEs can fill the gap quickly and cost-effectively, and the benefits of the training will be obvious."
It is normal for employees at a smaller company to handle multiple tasks, so by their nature, SMEs create an environment similar to the training ground Johnson describes. Setting priorities is a major skill at a smaller company. "But foremost, the employer/owner is well aware of the difference between core and side activities," Brilleman says.
The implication is that an individual whose core responsibility is logistics may also function to a lesser degree in other areas. Shifting needs will refocus priorities within that core function or in others. Setting priorities becomes a critical skill.
Brilleman projects that same set of characteristics on the organization itself. "Small companies—up to 1,000 employees—often don't focus on skills training, which is part of setting priorities," he says. "If small companies would take more time to identify what core skills training they need, they'd see the improvement in effectiveness and cost savings."
In any organization, large or small, training must be a priority to yield benefits. But small companies face some additional challenges. Should they offer individual or group training? Are cooperation and collaboration ancillary goals of the training? Can they keep customers satisfied on days when staffers are in training?
Though a commitment to training and education sounds disruptive, especially to a small company, the lack of development can impair supply chain performance. Research conducted by Accenture suggests "supply chain masters" devote disproportionally more time and energy than their competitors to developing talent.
Educators are conducting similar discussions and debates. Is supply chain management a business discipline responsible for managing across other business functions as well as the supplier and customer network? They are struggling to develop education strategies to address the business community's needs in the constantly expanding supply chain management environment.
Supply Chain implications
Fifty-two percent of employers had difficulty filling supply chain positions in 2011—up from 14 percent last year, according to the 2012 Third Party Logistics Study presented by CapGemini. Respondents to the global study indicate the top driver of organizational success is having the right people and leadership in place. This was true of both third-party logistics (3PL) provider respondents (77 percent) and users of third-party services (61 percent).
Universities aren't the sole source of talent. "Companies can invest in talent management, leadership skills, and succession planning," say the study's authors. "Talent management is the vigorous, systematic process of connecting a clear, well-defined business strategy to the recruitment, retention, and development of talent." In other words, top-performing supply chains are associated with companies that link a talent strategy to their business strategies.
There are clear reasons why 3PLs would view talent as a top priority. For one thing, that is what they are selling. But, 3PLs also need a culture and commitment similar to the clients for whom they perform supply chain tasks.
A subtle message lies within 3PLs' recognition of how important talent is. Suppliers to companies that emphasize supply chain performance need to be more than low-cost producers or leading product innovators. They need to match their customers' commitment to developing and maintaining a high-performing supply chain.
That circles back to Brilleman's point that developing supply chain talent is not a luxury for small companies. If they are, or want to be, suppliers to leading companies, their supply chain performance will have to match or exceed that of their customers.
There is no quick and easy solution to the supply chain management talent challenge. Universities are taking what they see and hear from industry, and developing programs to meet those needs. But the curriculum development process can be slow, especially where programs must withstand the review process of academic certification.
Many companies have strong ties to universities and work closely on developing programs and funding research. Even more companies have ties for recruiting purposes. But showing up at job fairs is not the same as volunteering for committees to help with curriculum development, providing funding and resources to support programs, and offering paid internships to help foster talent development.
The Talent Supply Chain
Talent development operates a supply chain of its own. The employer acts as the consumer of the product—a newly graduated bachelor's degree holder in operations management or a freshly minted MBA—and may be buying on the open market, looking for the best talent, wherever it is.
Or, that consumer may have established close, collaborative relationships with core suppliers, sharing needs and goals, and supporting "product" development and innovation. Less likely is the prospect that either has a similar collaborative relationship with the next-tier supplier—the high school.
Taken literally, the supply chain that produces that new BS in logistics has a 16-year lead time. And, as much of the public school performance debate shows, parental involvement is a significant contributor to success. The crucial eight years for companies that will be beneficiaries of the supply chain education system are from high school through undergraduate degree.
After that, it's up to the business community to train and nuture the next generation of supply chain leaders.