September 2015 | Commentary | Smart Moves: Supply Chain Careers & Education Advice

Why Excellence in Supply Management Matters More Than Ever

Tags: Logistics, Careers, Supply Chain

Thomas W. Derry is Chief Executive Officer, Institute for Supply Management, 480-752-6276

In today's competitive business environment, having visionary leaders and great products is not enough. In the past 20 years, companies have experienced a profound shift, and have dramatically increased their spending on external suppliers.

This places the supply management function in the spotlight as a key driver of profitability. The better supply management teams are at selecting, overseeing, and collaborating with these partners, the stronger their organizations will be. Indeed, the performance of the global economy depends on having outstanding people in supply management positions across the world.

Attracting and retaining top supply management talent—both experienced and emerging practitioners—is critical. Even more crucial than the recruiting process is ensuring practitioners have access to real-world training.

This approach often requires companies to participate in what can feel like a balancing act. Recruiting and retaining quality professionals of all levels can put a strain on resources, such as time and money. This frequently results in filling vacant positions with under-qualified or poorly trained employees, leading to major liability concerns, such as:

  • Being sued for a large contract with a poor or missing indemnification clause.
  • Discovering a key supplier overseas is using child labor.
  • Forgetting to factor in the cost of global export/import taxes.
  • Setting quality control limits too wide, and accepting substandard materials.
  • Having insufficient inventory levels that shut down production during a peak sales period.

These scenarios underline the importance of proper training and development. Growing the expertise of current teams, and investing in the next generation of supply management professionals, represent strategic investments.

For logistics professionals balancing the supply and demand curve of the global economy, professional excellence is essential in many areas, including:

  • Reverse logistics. Consumers and corporations increasingly expect products to be disposed of properly at the end of their useful lives. In the next decade or so, we will see increased demand for expertise in this area.
  • Agility and analysis. The West Coast port strike stressed the need for agility. Logistics professionals must quickly review, analyze, and synthesize data to promptly reroute shipments as necessary. A company's service, reliability, and profits depend on it.
  • Transportation costs. Many companies expected transportation charges would decrease with the 50-percent drop in crude oil prices, but that has not been the case. People who are able to understand the cost drivers, and know what is negotiable, will be highly valued.
  • Food logistics. Consumers show increased expectations for both food quality and a natural origin. Walmart illustrated this need in 2010 by committing $1 billion to source from local farmers. Such initiatives call for competency across the supply chain.

These examples, and many others, illustrate how the need for professional excellence has never been more paramount. Supply managers' capabilities and responsibilities have seen unprecedented growth in recent years. Never before have they been asked to take on as much responsibility as they do now.

The more today's professionals become masters of their craft, the larger the contribution they can make to their organizations, and, in turn, the greater the impact they can have on the supply management profession.






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