People: The Power Behind the Supply Chain
The most important link in the supply chain is the one who gets up every morning, drinks a cup of coffee, and gets down to work.
A four-year-old peers out of the sleeper of his father's big rig to see workers load freight into the trailer. Years later, he's helping clients design their supply chain networks.
A college student meets an advisor with a background in military logistics. The field sounds so fascinating, he picks it as his major and, right out of school, starts working as an operations engineer.
A summer job running food service for a Boy Scout camp steers a young man into hotel school with a focus on purchasing. Today, he's director of inbound logistics for Staples.
Every logistics career has its story, and every story has a main character. The supply chain may ride on wheels, wings, and an endless stream of data, but without living, breathing human beings to make the wheels turn and the data flow, the whole system would grind to a halt.
Who are these people powering the supply chain? What exactly do they do? What skills do they need and how do they acquire them? How have their jobs changed over the past few decades?
The answers, of course, aren't simple. First, some demographics.
As a group, supply chain professionals are largely male—89 percent, compared with 11 percent female, according to preliminary results from the 2006 Career Patterns in Logistics survey, performed annually by the Supply Chain Management Research Group at Ohio State University's (OSU) Max M. Fisher College of Business.
The survey, which examines the careers of senior supply chain executives, was presented at the Council of Supply Chain Management Professionals (CSCMP) conference this year by OSU professor Walter Zinn.
Participants report a mean age of 47.1 years, but the largest group of respondents—25 percent—fall into a slightly older category, 48 to 52 years. All respondents hold a bachelor's degree, while 51 percent achieved graduate degrees and 31 percent hold some type of professional certification.
More People Power
A 2006 survey by the Institute for Supply Management (ISM), based on responses from 6,952 members, offers another frame through which to look at the people powering the supply chain.
ISM's survey shows a closer balance between men and women working in the supply chain: 59.2 percent of respondents are male and 40.8 percent are female. The largest group of respondents, 40.5 percent, fall into the 46 to 55 age group.
Reported educational levels are lower than in the OSU survey because ISM questioned not only senior executives, but also directors, managers, and supervisors as well as non-supervisory professionals. In this group, 37.1 percent boast bachelor's degrees, another 20.9 percent report some college, while 27.6 percent hold graduate degrees.
The ISM survey also asks members about their ethnic origins, which break down as follows:
- 69.3 percent Caucasian
- 4.2 percent Asian
- 3.5 percent Hispanic
- 3.3 percent African-American
- 0.3 percent Pacific Islander
- 0.1 percent Native American
- 3.4 percent "other"
Another 16 percent of respondents did not answer this question.
Titles All Over the Place
Behind those numbers are people who manage all the events that deliver products from raw materials suppliers to end users.
Someone who works in supply chain management might spend the day sourcing steel rods, semiconductors, or soybeans; running a warehouse; assigning loads to carriers; making sure shipments arrive on time; overseeing customs compliance; or performing many other functions. And those are only the day-to-day tasks.
There's also forecasting, network optimization, supplier and carrier relationship management, and a host of other long-range planning functions.
"Logistics job titles are all over the place," says Terry McDorman, CEO of MGRM Associates, a recruiting firm for logistics executives in Lisle, Ill. "What one company calls 'supply chain and logistics manager,' another company terms something else. Defining what hiring companies want logistics employees to do when they give us a recruiting assignment is challenging."
If a company is large enough, it probably has a vice president or senior vice president in charge of supply chain, whether or not "supply chain" actually appears in the title, McDorman says. Below that person, depending on the firm's size and organizational chart, might be managers in charge of transportation, distribution, and warehousing. Experts in information technology or finance may also fall under the supply chain umbrella.
A company that buys commodities, for example, might employ people to trade futures in those products. "But the company will also employ a finance employee to examine the market and costing. It's a collaborative effort," McDorman says.
Retailers often employ a vice president of distribution and managers in charge of individual distribution centers, while at some catalog companies, the logistics operation runs the call center, he notes.
Jobs delineations are different in the logistics service sector, according to Rob Reich, vice president of enterprise recruiting for Schneider National, a transportation and logistics services company in Green Bay, Wis. Within Schneider's logistics services business, supply chain managers fall into two broad categories:
administrative and technical.
On the administrative side are people who interact daily with both shippers and carriers. Some serve as account managers, developing a close relationship with a particular customer or customer group. Other administrative employees are specialists who focus on a certain industry, such as automobile manufacturers.
"A specialists' role is to analyze freight flows, carrier management, and other similar issues," Reich says.
On the technical side, Schneider's logistics engineering department houses many employees with Ph.Ds and Masters in various supply chain engineering disciplines. These employees perform tasks such as "conducting in-depth analysis of freight flows, and recommending where shippers should locate their next parts distribution center," Reich says.
What They Need to Know
University supply chain programs offer curricula to prepare future professionals for both the operational and technical sides of the business.
At OSU, along with undergraduate and Ph.D programs in logistics, future supply chain managers can choose between two Masters degree programs. One is an MBA with a major in Operations and Logistics Management; the other is a Masters in Business Logistics Engineering (MBLE), a program managed jointly by the engineering and business schools.
Although some overlap exists in the jobs pursued by graduates of the two masters programs, MBLE graduates "tend to go to companies that need people with a stronger technical bent," Zinn says. "They are more likely to be responsible for analyzing and designing logistics networks."
Some MBLE alumni work on software implementations. Some become logistics analysts, studying tradeoffs such as "whether or not to buy in larger quantities and therefore generate inventory but get a quantity discount for the purchase," Zinn explains.
A degree in logistics or supply chain management can lead to a job covering a broad range of functions. But with so much technology available to automate repetitive tasks, graduates who take logistics jobs today are less likely to focus on day-to-day execution, says Robert Trent, director of the supply chain program and Eugene Mercy associate professor of management at Lehigh University.
"More and more, logistics professionals are moving away from transactional duties, instead focusing on creating strategies and managing relationships," he says.
Because they're more focused on strategy, supply chain professionals these days must learn to work well with others. "They need the ability to look at the supply chain holistically, and to become involved with global sourcing and global logistics teams," Trent says.
When those teams meet today, it is often around a digital conference table—a fact not lost on educators.
"I've added virtual teaming modules to my courses," Trent says. "Today's supply chain and supply management professionals often work closely with people they have never met. They are not even working the same day of the week with co-workers and partners in China and Japan."
All Roads Lead to Logistics
Of course, not everyone enters the field by way of a supply chain management program. The industry is full of people with degrees in other areas of business or engineering—or in entirely different disciplines—as well as former truck drivers and warehouse workers who rise through the ranks.
Professional training was less important before the U.S. government deregulated transportation in the 1970s, posing a knotty array of cost-benefit tradeoffs that companies never had to consider before, says Mike Kilgore, CEO of Atlanta-based logistics consulting firm Chainalytics. As a four-year-old, Kilgore started going on truck runs with his father, who later left driving for transportation management.
Since those days, fewer people take the senior Kilgore's route to a supply chain management career, opting instead to seek diplomas in the field. "The number of logistics-related programs and majors soared after deregulation because the environment grew more complex," Kilgore says.
The New Face of Supply Chain Management
The nature of any job evolves over time, but some recent changes in supply chain management are particularly striking.
One of the biggest forces re-shaping supply chain careers is the rise of the global economy. "Businesses today must look beyond the borders of North America, and logistics professionals have to understand how that works," says Schneider's Reich.
People who have worked overseas and who understand foreign cultures—especially in Asia—are in high demand, as are people with experience in freight forwarding, customs brokerage, or other aspects of global trade. Foreign language skills are also highly prized.
It is also increasingly important to understand the mechanics of doing business in different countries, Reich says. "Knowing how to navigate both the political and economic environment in another country might be the most important skill to look for in a potential employee," he explains.
Business schools offering logistics courses are also putting more emphasis on international trade issues, and on the kinds of business strategies that work in specific countries, OSU's Zinn says. Students clearly are looking for this kind of instruction.
"The student body has changed; more international students now attend. Students are more interested in international trade, and class discussion reflects that," says Zinn.
Logistics IT Packs a Punch
Another big change to the supply chain industry over the past few decades comes from the advent of logistics information technology.
"Supply chain management has become more of a planning function than it was in the past, because we continue to successfully automate what was previously administrative and clerical work," says Chainalytics' Kilgore.
In the old days of transportation, for example, paper transactions were king. "A lot of paper was generated and a lot of people spent their days processing it," Kilgore says. "Today the paper that moves with goods is not the primary transaction flow. It's only documentation of an electronic transaction."
Because of this, administrative and clerical jobs have given way to planning positions, he says.
Those planners also benefit from new technology. "Today software is available to handle network design and analysis," says John LeNeveu, vice president of marketing and sales for Atlas Cold Storage. "Sophisticated forecasting software, as well as supply chain management software, helps practitioners optimize their supply chains."
Back in the late 1980s, when LeNeveu worked as an operations consultant without today's powerful optimization tools, "we used manual calculators, and an industrial engineering approach," he recalls. "To look at different supply chain scenarios, we completed analytical work based on basic cost modeling."
Analysts at that time could identify better solutions than their current ones, but could not determine which of several alternatives was best. Today, an analyst can run an optimization tool monthly, weekly, or even daily, says LeNeveu.
Another big change in the field is a new focus on cross-functional collaboration, something Lehigh University stresses to its supply chain students, Trent says. Rather than merely focusing on their own areas, Lehigh's program prepares supply chain professionals to work closely with employees in marketing, information systems, finance, and other disciplines.
"We hope when our students complete the program, they don't even grasp the silo mentality," says Trent.
That cross-functional approach has a correlating payoff—greater visibility and respect for the people who power the supply chain.
"Logistics is no longer looked at as a necessary evil," says Dennis Sheldon of Build-A-Bear. "Instead, logistics professionals have proven that we can add value. We build relationships across the entire process, across departments, and with outside vendors. Every aspect of business is a link in the chain."
The Old Guard Meets the Next Generation
Ask Marty Peters about Detroit and he'll rattle off a stream of street names so fast he sounds like an old-time auctioneer. Those street smarts—gained during his stint as a postal worker in high school—helped win Peters a job sorting packages for United Parcel Service when he got out of the Army in 1946.
Sixty years later, Peters still gets up each day to dress in UPS brown. At 83, Peters has worked for UPS longer than any of its current 407,200 global employees and longer than any past employee but the company's founder.
In his six decades, Peters has held just about every job UPS has to offer: driving package cars and tractor trailers, working the customer counter, running the company's Cicotte facility in Detroit.
When he started out, the trucks Peters drove had no heaters or defrosters. "In the winter, I would hang a kerosene lantern to get a little warmth in the truck," he recalls.
Drivers had to keep stopping to scrape ice off their windshields. "Many drivers could only see through a little peephole when they were on the road. It was dangerous," he says. Trucks with defrosters came along in the early 1950s.
Peters still drives part-time, shifting trailers to and from the loading docks at a UPS center in Detroit. He spends the rest of his day doing research to correct misaddressed package labels.
Getting a package to its destination when it lacks a correct street address is much easier in the age of sophisticated computer systems, Peters observes.
"In the old days we used index cards. It was hard to trace a package. But today, you just key the PO box number or street name into the computer, and right away all the information comes up," he says.
While Peters was celebrating his 60th anniversary at UPS last March, Richard Vandzura and Peter Bulk were getting ready to start their supply chain careers.
Last spring, Vandzura graduated from Pennsylvania State University, Abingdon with a degree in business logistics and international business, while Bulk earned a degree in supply chain management from the Eli Broad College of Business at Michigan State University. Both are working in their first supply chain positions.
Vandzura chose the logistics major as a sophomore after talking to an advisor whose military logistics experience sounded exciting. "I'm a process-minded person. I like to look at a given process and nitpick at it to identify inefficiencies," he says, explaining what drew him to the field.
On graduation, Vandzura entered Lockheed Martin Corp.'s Leadership Development Program, which nurtures future leaders in operations, engineering, and finance. The program will place him in four six-month assignments at two different Lockheed facilities, and enroll him in engineering management courses offered through Drexel University as part of an MBA program.
"I'm employed in an inbound logistics role, working within manufacturing and with a procurement specialist to get material to the factory floor and watch it through final assembly and delivery to our customers," Vandzura says of his first assignment at Lockheed Martin's Maritime Systems and Sensors division in Syracuse, N.Y. The most satisfying part of this work is seeing the physical product.
"When I dealt with outbound logistics as a student, working on a project with a chemical manufacturer, I did a lot of paperwork, made a lot of phone calls," Vandzura says. "I enjoy actually seeing a product being made."
Peter Bulk didn't have to choose between inbound and outbound logistics in his first post-college job. His employer, Cargill Industrial Bio-Products, is a tiny startup within the Minneapolis-based agricultural products giant, so as a customer service/supply chain analyst, Bulk wears many hats.
Along with handling customer orders, "I purchase from suppliers, and work with the product manufacturers on scheduling," says Bulk, who works in the portion of Industrial Bio-Products that sells polyurethane foam made from soybean oil.
"Because we're so small, I handle a lot of the logistics involved in moving our product—whether it's coordinating the raw materials or sending goods to customers."
Bulk started out majoring in general management. He was eventually attracted to supply chain management because of how it impacts the bottom line. "With logistics, you can fix problems right away," he says.
The job is a great learning opportunity, Bulk says. "We ship product in every way possible—containers, rail, truck, air freight, and, eventually, ocean. It's great to experience that variety," he notes.
For Bulk, the best part of the job is interacting with people—both his fellow employees and his customers. "It is satisfying to decipher the logistics of getting customers their products when they need them," he says.
What They Do All Day
Day-to-day jobs in the supply chain vary almost as much as the people who hold them. To get a taste for that variety, here's a look at how some supply chain professionals spend their days.
Dennis Sheldon arrived at Build-A-Bear Workshop, a chain of retail stores where customers make their own personalized stuffed animals, in May 2005. Part of his mission was to evaluate the distribution network that brings materials, such as stuffing and miniature costumes, to the company's nearly 200 stores.
Since joining the St. Louis-based firm, he has spent much of his time "reconfiguring and crafting a new logistics network and installing improved systems, processes, and people to provide the support structure in which to grow the business while driving down cost," he says.
Build-A-Bear, which used to rely entirely on 3PLs, opened its first company-owned distribution center in September 2006 in Groveport, Ohio.
"We are excited about the benefits this 350,000-square-foot facility will deliver to our business," Sheldon says.
John LeNeveu is currently senior vice president of marketing and sales at Atlas Cold Storage, working in the Chicago area for the Toronto-based warehousing and distribution firm. When he first came to Atlas in the early 1990s, his responsibilities included managing more than 50 temperature-controlled warehouses.
That part of the job involved "overseeing warehouse operations to make sure all our facilities were cost efficient, and provided effective customer service in terms of truck turnaround times, inventory accuracy, and fill rates," he says.
He also worked with major shippers to serve their current and future logistics needs, such as establishing a new warehouse, or developing a program to integrate transportation and warehousing solutions.
John Hulton, who got his start in Boy Scout camp food service, is now director of inbound logistics at Staples in Framingham, Mass.
He has worked as a buyer and director of purchasing for two California hotel firms, and in various logistics roles for Sears and Staples. The main mission in both purchasing and logistics is to make sure the company has the goods it needs to satisfy customers, but Hulton finds the planning horizon in retail is longer than in the hotel industry.
Although the hotels booked conventions and banquets in advance, Hulton also had to keep a sharp eye on day-to-day customer demand.
"I worked closely with the executive chefs and beverage managers to make sure we had the right items; I also had to ensure that our goods arrived on time, that purchase orders were cut, and that vendors made deliveries to the right locations," he says.
Because the hotel industry is so sensitive to cash flow, "you cannot buy too far out," he explains. Sometimes Hulton ordered special items the day before they were needed, or even the same day, and anxiously waited for delivery.
At Staples, Hulton also focuses on current needs—such as knowing what freight is on the way and whether it arrives on time. "But I spend more of my day on forward-looking plans," he says. "How can we improve this next year or next quarter? How do we optimize our transportation management software to achieve better results?"
He also spends more time in meetings. "I attended a lot of meetings at the hotels, but they focused on today, tomorrow, next week. The meetings I go to now are about next quarter," Hulton says.