Core Competencies Every Supply Chain Manager Needs
Acquire these skills and competencies to build success in your supply chain—and your career.
For supply chain professionals eager to negotiate the career ladder, one thing is certain: Yesterday's resume already needs an update.
That's because the core competencies essential for optimized performance have changed considerably, not just as a result of advancing technology, tighter budgets, and rising consumer expectations, but also due to shifting demographics and global realities.
With an ever-evolving economic landscape in mind, Inbound Logistics asked supply chain education and professional development experts (see sidebar) to identify the competencies that every enterprising professional's resume should reflect.
The new competencies apply to supply chain professionals working in the for-profit and public arenas, in companies of every size and in government agencies at the local and national levels, notes Nora Neibergall, senior vice president for certification and standards at the Institute for Supply Management, a not-for-profit professional supply management organization. What's more, they supplement the core competencies of yesteryear—among them, negotiating skills, cost-price analysis, and sourcing.
"These skills are all still very important," Neibergall notes, "but a whole layer of complexity has been added as we move to a truly global marketplace."
Companies expecting to retain or achieve an advantage in this "competitive arms race for talent" would do well to develop these competencies within their organizations and to seek job candidates already versed in them, agrees Mark McEntire, senior vice president of operations at Transplace, a third-party logistics provider based in Frisco, Texas.
With the supply chain deemed increasingly important within an organization's operations, here are the top skills career development experts consider essential:
Successful supply chain professionals have always seen opportunities for saving money within their operations. But today, they need to be "looking at the supply chain as a competitive lever that you can pull," says Kate Reigel, who directs a new master's of science program in supply chain management at the University of Minnesota's Carlson School of Management.
That means thinking with a C-suite perspective. After all, Reigel says, dramatic changes—and opportunities—in the supply chain have come to the attention of those in the boardroom, where chief officers of everything from marketing to finance are finally talking supply chain management.
What's more, they have invited "chief supply chain officers" into the circle. "When I was in business school, the chief supply chain officer role didn't exist," Reigel says. "You had a CEO, a CFO, and a CIO," but the chief designations stopped there.
"Historically, the supply chain's function was often to just get the goods there when they tell you to," she adds. "But now, the supply chain can be used to deliver value to organizations."
C-suite thinking requires what Reigel calls "the knowledge and understanding of an end-to-end perspective." Sometimes that understanding may be tapped to restrain ambitious plans; other times it might be harnessed to accelerate them. For example, a full understanding of the chain might mean the difference between scheduling a simultaneous launch or a staggered launch of new outlets in new markets. By the same token, a deep knowledge of procurement options and strategies can shape high-level decisions about product design.
Finally, a strategic orientation means understanding how even matter-of-fact decisions have high-level impact—how, say, the choice of a supplier might have ramifications for the brand or a research/design/development/delivery timeline.
A GLOBAL PERSPECTIVE
At the micro level, "buy local" is increasingly a consumer mantra. But at the macro level, everything is global—and has been for some time.
That's why a global perspective is a must, no matter the size and reach of the company. "We all source globally now, and it's impossible not to understand that your supply chain is heavily influenced by international factors," Neibergall says.
A global perspective includes knowledge about importing, exporting, trade agreements, and customs regulations, of course. But it goes beyond that to include what academics call "cultural competencies."
"The ability to work with teams from around the world with different perspectives is critical," Neibergall explains. "It becomes very important to understanding where your suppliers are, and where their suppliers are. There's a whole element of risk management and quickly being able to work with people on the other side of the supply chain."
Cultivating cultural competency often requires more than background research. "It's not always a skill you can get from classroom instruction," Neibergall says. "You might have to get it through a mentoring process, with somebody who has experience within the region, culture, or country you need to work with. That's where building your network is critical."
Leadership from all the compass points
No matter a supply chain professional's position in the company hierarchy, leadership opportunities exist. Seizing those opportunities is essential, both for individual career mobility and for the company's bottom line.
"Not everyone is going to be chief purchasing officer," Neibergall says. "We joke that millennials think they're all going to be the chief procurement officer, but realistically there are not that many CPOs in the world.
"But there are abundant opportunities for leadership," she notes. "Even an entry-level position presents opportunities to lead from the bottom or the middle. You are engaged in teams and in work groups, and you deal with suppliers. You have opportunities to lead all the time, and you have to recognize and maximize them."
Today's challenges demand what Reigel calls "leading beyond boundaries"—which means leading others outside the immediate team and perhaps even outside the employing company.
"The supply chain requires various partnerships with customers and suppliers," she says. These relationships require leadership, whether the task at hand involves approaching a partner with a new idea or seeking a solution to an unfolding challenge.
Analytics know-how for decision-making
"The supply chain generates enormous volumes of data," Reigel explains. "Where's the inventory? How is it being shipped? Is it being delivered on time? Is it being returned? How do you amass all these pieces of data in a way to help make strong business decisions?"
Knowing which data to enlist, and then using that information effectively, can be challenging. As McEntire sees it, supply chain professionals need to learn how to find stories within the sea of data. Once that's done, he says, they need to figure out how to relay the stories to those charged with developing strategy and implementing plans.
That's where effective data visualization comes in. It can make the difference between "aha" recognition of a path forward and a vague sense that the numbers reflect a compass point, McEntire explains.
That said, McEntire believes that data goes to waste if it isn't accompanied by "a bias toward action." Data can be overwhelming, and it's easy to postpone a decision under the guise of needing more information or overthinking the data on hand.
"It is so easy to just kick the can down the road," he says. Easy though it may be, delayed decision-making can be costly and demoralizing to staff. Let the data point you in the right direction, but learn to "be comfortable making decisions when you don't have all the information at your hands," McEntire says.
Neibergall agrees. "We are truly a data-driven society, and businesses expect you to utilize as much of
the resources as you have available
and try to improve decisions," she says. "But you can't overanalyze things. It's not just understanding how to get the data and how to use it, it's also being able to synthesize the data, make decisions, and be able to act on them."
A bias toward action can lead to missteps if the plan isn't communicated well. That's why every supply chain professional needs to anticipate what people need to know, share that information at the appropriate time, and explain it without ambiguity. No decision will be implemented efficiently or effectively if it isn't communicated well.
"Communication skills can't be overemphasized," Niebergall notes. They are essential to building collaboration and, just as important, "to facilitating difficult discussions."
Supply chain leaders need to learn how to communicate up—to synthesize data and arguments so the leadership team can act effectively. Neibergall calls this "being able to translate what's happening in supply management in a way that the CFO or CEO will understand and appreciate."
At the same time, McEntire adds, supply managers need to be able to communicate with their direct reports. As any good communications/management textbook will argue, managers need to be able to provide necessary context and insight into strategies, as well as understand how language can be used to motivate or demotivate.
Supply chain managers also need "customer-facing" communication skills, McEntire says. They need to speak a language conducive to building partnerships—a language that communicates a mutually beneficial vision.
A RESPONSIBILITY ETHIC
Environmental responsibility is integral to the supply chain. After all, the supply chain is where packaging is reduced, transportation options reconsidered, and the carbon footprint contained.
But increasingly, responsibility means more than an obligation to use resources wisely and protect the environment. "There's also a people piece," Reigel explains.
Many companies found out just how important the people piece is in 2012 when a fire broke out in a Bangladesh fashion factory. With 115 workers left dead, attention turned to the conditions at the factory and to the clothing brands that benefited financially from cheap labor toiling in an unsafe environment.
That's the kind of attention no company wants. It illustrated "that it's now time to take ownership of your customer's customer and your supplier's supplier," Reigel says.
Neibergall agrees. Ensuring that your suppliers behave responsibly is part of effective risk mitigation and brand preservation. That means recognizing the conditions that signal slavery and bonded labor in the supply chain or health-endangering practices that might lead to a product liability suit.
"It's being able to understand how to protect against that, how to remedy it, and ensure that you have a good supply chain," she says. "It's not only about brand protection, but also about potential financial losses and litigation. As a supply manager, one of your roles is to keep your company out of trouble."
Neibergall takes the responsibility walk one step further. In addition to protecting the brand through people-friendly practices, she believes responsibility entails inclusion, paying attention to diversity issues, and "ensuring that your work force and leadership team reflect the communities that you serve, your customer base."