Custom Education: Guaranteeing A Perfect Fit

Tags: Legislation, Public Policy, and Regulations, Global Logistics, Education, Supply Chain

As supply chain complexity continues to increase, companies and schools are stitching together courses, tailoring entire curriculums, and adding employer-specific projects to executive education programs.

When it comes to supply chains, "the learning never stops," says Richard Hall, executive vice president, supply chain, engineering and leadership with Bob Evans Farms LLC. "When you think you know it all, you have a problem." The company, based in New Albany, Ohio, owns and operates 500 Bob Evans restaurants, and produces and distributes sausage, bacon, and other food products. Hall, along with six colleagues, has completed the supply chain management program offered through The Ohio State University (OSU).

After all, the complexity of most companies' supply chains continues to increase, a result of globalization and unrelenting pressure to bring goods to market more quickly and efficiently. "The supply chain function has become a far more strategic partner in business," says Joel Dupuis, executive education key account director with Arizona State University in Tempe.

Because effective supply chains are critical to many businesses' success, the individuals in charge of them need a leadership perspective and the ability to oversee multiple functions and individuals. That often requires a shift from a tactical focus to "understanding how their function supports the organization," Dupuis says.

These professionals also need to gain a holistic view of the supply chain that encompasses not only the vendors that supply their employers, but their vendors' vendors, as well as customers, and their customers' customers. This approach recognizes that relationships between members of the supply chain are key. "If you manage relationships better than your competitors, you'll win more often," says Douglas Lambert, chaired professor and director of the Global Supply Chain Forum at OSU.

Another requirement of many supply chain leaders today is a solid understanding of issues such as customs regulations and food safety that historically may have fallen outside their purview, says David Closs, chair of the supply chain management department at Michigan State. Slip-ups in these areas can lead to legal liability and public relations headaches, and in some cases, they can even endanger customers. Case in point: Restaurant chain Chipotle Mexican Grill has had trouble consistently ensuring the safety of its food supplies.

Together, these changes mean that even employees who possess a solid foundation of supply chain experience and education need to periodically update their knowledge. "If supply chain leaders are not engaged with some type of outside organization to help them keep abreast of changes and advances in supply chain, they're doing their company a disservice," Hall says.

In addition, employees whose roles lie outside the supply chain function increasingly need to understand how it works, its importance within an organization, and how boosting its effectiveness can help the company overall.

Yet few employers are able to let employees leave work for extended periods to take courses, nor can many foot the bill for lengthy, expensive programs. So, while graduates with Master's degrees in supply chain remain in demand, companies and employees are embracing executive and custom education programs that allow employees to remain on the job as much as possible, yet efficiently gain insight and knowledge into supply chain best practices, and then apply these to the challenges their companies face.

The programs address employers' need to see a rapid, tangible payoff in greater efficiencies, reduced costs, or improved service and operations. While most programs don't culminate in a degree, students may earn certificates or continuing education credit.

Learning By Doing

The programs often make liberal use of case studies, simulations, discussions, role playing, and even field trips—Georgia Institute of Technology (Georgia Tech) students might visit the Port of Savannah, for instance—rather than relying solely on lectures. "Adults learn by doing and reflecting on what they've done," says Tim Brown, managing director of professional education supply chain and logistics programs, Georgia Tech.

Most programs combine in-class and online courses, minimizing the time students spend away from home or work. Online courses also make it easier for employees from around the globe to participate, as well as senior executives with tight schedules.

When students must leave work to attend class, they're often gone for no more than one week at a time. "In the past, we offered four-week programs. No one can get away for four weeks today," says Maria Taylor, managing director of executive programs at Smeal College of Business, Penn State.

In-class courses often are held at the universities, although some companies opt to host them at their offices.

While many students come from positions within supply chain management, it's not unusual for classes to include employees from sales, marketing, human resources, and other areas. Most hope to better understand how the supply chain works and the challenges it presents.

Participants tend to come from the manager level or above. "We're not doing as much tactical training as looking at leadership capabilities and managing the end-to-end supply chain," Taylor says.

Faculty members usually teach in the undergraduate and graduate programs at the universities. Most teach regularly in the supply chain program, although some focus on other areas. Georgia Tech, for instance, pulls from both the College of Engineering and the College of Business.

Most companies participating in the programs tend to be large and mid-sized firms that are better able to handle the costs and cover the day-to-day work left behind when employees spend time in residency programs. However, it's not unusual to see a few participants from smaller firms in the open-enrollment programs.

In addition, some large companies bring their smaller suppliers into the courses. "The insight they can gain helps them become active members of the supply chain," says Robert Handfield, professor of supply chain management, North Carolina State.

Executive Education, Altered

Not every company has the resources or need to develop a custom program. Executive education programs in which students from multiple companies can enroll—often referred to as open enrollment—are a solution. The fees vary, although many charge approximately $4,000 to $5,000 per semester or program, for each employee. Many companies cap their annual educational reimbursement for each employee at $5,000, so these fee structures enable many students to have employers cover the cost.

Students in Arizona State's supply chain management certificate program start with two core courses: one on integrated supply chain management and one on supply chain strategies. Then they typically choose two elective courses in either supply management, logistics management, or operations management. The courses are interactive, with professors and students engaging in discussions and case studies. Students typically spend between eight and 10 hours each week on the courses, and most finish the program in about six months.

The West Michigan Supply Chain Management Certificate Series, offered through Michigan State University, consists of two 14-week modules. The first focuses on marketing and supply chain management concepts, and the second concentrates solely on supply chain management.

Students meet on campus one day each week for four hours, and participate in discussions, readings, and simulations between classes. In addition, they work on projects geared to their employers. For instance, students from a regional grocer analyzed the company's milk distribution network, Closs says.

While executive education programs are designed to provide value to students from a variety of companies, many courses are designed so all participants can apply the principles to projects and challenges within their own firms. This is key, as shrinking budgets and competitive pressures force many companies to look for a compelling return on their training investment.

Bob Evans began working with Ohio State's Supply Chain Management Program in 2008. Under the leadership of a new chief executive officer, the company was consolidating four purchasing divisons into a corporate procurement department. "We weren't leveraging the spend in the organization," Hall says, adding that total spend now reaches approximately $800 million. This transition evolved to the company's current supply chain discipline.

At first, however, "we didn't have a roadmap of the direction to go," Hall says. Conversations with business partners led him to Professor Lambert's program at OSU; Bob Evans also is a member of the university's Global Supply Chain Forum.

The program focuses on implementing the functions identified in the forum framework: customer relationship management, supplier relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, product development and commercialization, and returns management.

The program's holistic view of the supply chain, and its focus on processes and approaches that allow all parties to realize value, has been key to the evolution of the supply chain function at Bob Evans. "Beating suppliers to death to get an extra nickel," isn't sustainable, Hall says.

Bob Evans has tried to take a different approach. For instance, discussion with one of its food products suppliers led to an arrangement in which the supplier regularly uses Bob Evans' trucks for backhauling. "If they have freight, we haul it," Hall says. The two companies share the revenue.

In addition, the supplier has a hand soaps and cleaning products division. Bob Evans had been using other, more expensive vendors for these products. "We tested the products, and they were as good or better than what we'd been using before," Hall says. The company switched and saved money, while the supplier gained new business.

In the first four years Bob Evans and this supplier began working together, the combined savings topped $31 million. "Dr. Lambert and his team made a huge impact on the direction of our department," Hall says.

A Custom Fit

Custom programs are jointly developed by an organization and educational institution, with "a focus on what the company wants the employees to be able to do after the course; what skills they need to perform better in their jobs," Lambert says.

The courses "can run the gamut," says Brown of Georgia Tech. Examples include "lunch and learns" held every six weeks at a company's offices, and three- to five-day courses on topics such as inventory planning and warehouse layout. Some companies allow outsiders into their custom courses as a way to both spread costs and gain perspective from those outside the firm, Brown adds.

In many custom programs, experts from within the companies work alongside the professors. These individuals can provide insight on applying the trends and best practices outlined by the professors to the company itself. They're also able to discuss the organizational changes the company may need to implement the ideas discussed.

Designing a custom program usually starts with discussions between senior management and the university's program directors. "Both parties have to invest time upfront to get it right," Handfield says.

The managers and directors review the ways in which supply chain management fits into the corporate structure, and compare existing supply chain practices with goals. They also analyze the factors driving the industry in which the company competes. The conversations also cover the nuts and bolts of the program: the learning objectives, the budget, the desired level of interaction, the breakdown between online and classroom instruction, and the types of employees who will participate, among other topics.

Benefits Offset Costs

Although the cost to develop custom programs can total thousands of dollars, in addition to the expenses incurred in getting employees to attend, employees learn concepts directly applicable to their organizations. "They can apply what they have learned and drive productivity improvements, cost savings, reduced transportation spend—some kind of measurable benefit," Handfield says.

In 2011, Rick McDonald, vice president, supply chain, international with The Clorox Company, and a colleague began looking for programs geared to supply chain leaders at the plant manager level or above. "We wanted one comprehensive program to connect the end-to-end supply chain; to help employees understand how decisions in one area impact outcomes in another," McDonald says.

Ultimately, the goal was to develop a "supply chain manager mindset," McDonald says. "We wanted to change the trajectory of employee development." The program is tied to Clorox's strategy, which seeks to engage employees as business owners.

The company began working with Georgia Tech, drawn by the university's reputation for linking the practical to the theoretical. McDonald also wanted employees to gain an "external to Clorox" perspective, so they could see the "big supply chain world and how other companies solve the same problems we have," he says. In fact, about 80 percent of the material used in the courses focuses on other companies.

McDonald and Georgia Tech developed the Strategy and Leadership Forum organized around four pillars: supply chain strategy, operational excellence, leadership, and project management. Clorox subject matter experts work with Georgia Tech faculty to "contextualize" or show how the examples of challenges addressed by other companies apply to Clorox' challenges, McDonald says.

Full Immersion in the Program

Students begin by engaging in interactive self-study early in January, and then reside at Georgia Tech the last week of the month. During this week, "they are 100 percent immersed" in the program, McDonald says. In fact, during this week, they complete about 16 modules each lasting between two and four hours, on subjects such as logistics, transportation, and critical thinking.

Employees head back to their jobs and continue their self-study before returning for another week of residency in March. The program concludes in June.

A key component of the program is the projects the students work on in small groups. All are "specific projects that benefit some part of Clorox's strategy," McDonald says.

For instance, one team is developing capabilities in e-commerce segmentation, determining how to make the company's products e-commerce friendly. This includes everything from the nuts and bolts of taking orders, to collecting payment. While many online retailers offer Clorox products, most are not currently available on the company's website. "E-commerce is a capability we need and want," McDonald says.

Approximately 45 employees participate in the program each year. Most—roughly 35 of them—come from the supply chain function, and the rest from other departments. With such a variety, "the richness of the conversation is incredible," McDonald says. "There's a lot of energy, and the learning is interactive."

The program slots are highly coveted. "When employees are invited, they're tremendously excited," McDonald says.

Clorox employees who go through the program gain a robust understanding of each link in the supply chain, and build strong relationships with the others in the class, all of which benefits the company. For example, when they run into obstacles, they can reach out to other class members to discuss ways to handle it.

"Clorox is a process-based company, but we're also a relationship company," McDonald says.

Clorox competes with a number of much bigger rivals, McDonald adds. Through the program, employees are better able to lead Clorox in a fiercely competitive market.

"The Strategy and Leadership Forum provides a great opportunity for Clorox's supply chain leaders to learn to think like general managers" McDonald says."It also helps them understand the ways that leveraging the end-to-end supply chain can improve our ability to serve customers and reward shareholders."