It’s not just about purchasing anymore

screen-shot-2016-09-19-at-11-58-08In the not-so-distant past, many OEMs would recruit graduates of business schools that offered programs that focused on purchasing, sourcing and logistics for procurement and supply chain positions.

But now, while many electronics companies want new hires to have strong backgrounds in sourcing and procurement, they also want them to have cross functional skills to address issues that impact the entire   supply chain. As a result the number of universities that offer supply chain management programs that focus on an integrated end-to-end supply chain approach
is growing.

“An example of a program that did not exist five years ago would be Rutgers University,” said Dana Stiffler, vice president of research covering supply chain talent strategies for researcher Gartner Inc. “They decided that supply chain management was a fantastic opportunity and decided to offer a program,” she said.

Rutgers is not the only school to begin offering supply chain management programs in recent years. University of Arkansas, Purdue University, Loyola University, Portland State University, University of Colorado, University of South Florida, Rensselaer Polytechnic Institute, and University of Alabama Huntsville did not offer comprehensive formal supply chain management programs five years ago, but they do now, Stiffler said.

She said universities are offering supply chain curricula because of the growing demands by companies that need people with broad supply chain management expertise.

Gartner recently released a report on the top colleges and universities for supply chain management and the programs they offer, including a ranking of the top 25 schools for supply chain management.

The Gartner report said schools that had focused on purchasing and logistics have expanded their programs and now offer degrees in supply chain management.

“Supply chain management is hot,” said Stiffler. There have been a “lot of schools piling into it” because of the growing demands by companies that need people with broad supply chain management expertise, said Stiffler.

In addition enrollment in supply chain programs at college and universities that participated in the study were up 43 per cent since 2014. The placement rate for students at graduation was 76 per cent and 93 per cent of supply chain management graduates found positions within three months of graduation, the study said.

“When you look into business schools and the kind of degrees that they offer, accounting, marketing, what have you, the placement rate and the demand for supply chain operations talent is massive,” said Stiffler.

There are multiple reasons why there is growing interest by OEMs in hiring people with supply chain management educational backgrounds. One reason is that there has been a “restructuring of operations to roll up more operational functions under one executive,” including direct materials sourcing and procurement, said Stiffler.

“What you started to see was this emerging definition of supply chain as not just logistics and fulfillment and not just sourcing and procurement. It’s an end-to-end view of how you source and fulfill against customer demand,” said Stiffler.

New talent needed

So as companies restructured and formed broader supply chain management organizations, they realized they did not have the necessary talent in house and needed to recruit. “They had these new organizations, but they were still operating primarily in silos due to the talent and the culture that they had,” said Stiffler.

The new organizations still needed people with traditional purchasing and logistics backgrounds, but they also needed employees who had been more general business skills and were knowledgeable about integrated business planning, she said.

They needed recruits who “knew cross-functional processes such as sales and operations planning, new product development and launch, integrated order management, the things that bridge silos,” said Stiffler. Those needs resulted in the “emergence of supply chain management curricula at college and universities that are much more broad” and not focused just on logistics or purchasing, she said.

For instance, Arizona State always had a “massive specialization in sourcing and procurement, but the school has built out its curriculum to address the rest of the value chain,” said Stiffler. The same is true with transportation and logistics programs at Tennessee, Georgia Tech and MIT that had focused on logistics and transportation, but now offer broader supply chain curricula, she said.

“It’s no longer just about purchasing excellence. It’s about purchasing excellence in the context of an integrated value proposition,” said Stiffler.

Purchasing at the core

A lot of supply chain programs used to have purchasing and logistics or operations management “at the core of their programs,” said Stiffler. Many schools have “taken those pieces and added courses focusing on the end-to-end integrated supply chain,” she said.

“When you look at supply chain planning, manufacturing, purchasing and sourcing, logistics and fulfillment and you start to look at them all together, that is integrated supply chain,” said Stiffler. Integrated supply chain was missing from a lot of college purchasing and logistics programs.

Integrated supply chain is key to strategic sourcing, said Stiffler. If a company is effective at strategic sourcing it is because the company is taking into account the entire value chain in sourcing decisions and not viewing sourcing as just a supplier management problem, she said. Besides integrated circuit supply chain programs, supply chain programs focus on finance, project management technology tools and applications.

“Some courses are more apt to be offered at the graduate level than the undergraduate level,” said Stiffler. “Things like supply chain strategy or how you align supply chain strategy with business strategy seems to show up more in masters programs than undergraduate programs, she said.

Other courses offered at top supply chain management program besides purchasing and logistics include:

Demand planning and forecasting, production planning and scheduling.

Supply planning, which would be the bridge between demand planning and sourcing.

Customer management: “This is service. Once you have sold something then you flip over to a service view of supporting your product,” said Stiffler. While it is a separate function from supply chain, it’s an important function for supply chain to be involved in. She noted that with some companies  the aftermarket is much more important than the initial sale of the equipment the company manufactures.

Internships. There’s a lot of industry specialization. “Internships often times give students a flavor for specific industry,” she said.

Technology enablement: students need hands-on direct experience with supply chain applications. That would include software such as Arriba or SAP or transportation management, warehouse management, advance planning, network modeling optimization software.

Stiffler said a good supply chain management program should offer the broad integrated end-to-end view of the supply chain as well as classical supply chain functions such as purchasing and logistics.

Real-world problems

Programs should provide students the chance to work on real-world supply chain problems which you would get with an internship or a project work in a classroom or on site at the university’s incubation program with a company.

Stiffler added there is an “interesting debate that is ongoing” about the value of an engineering degree versus a business degree for purchasing and other supply chain management positions.

Some schools that offer supply chain programs are engineering universities such as Georgia Tech, MIT, and Rensselaer Polytechnic Institute. The schools offer either undergraduate or graduate degrees in supply chain management.

Stiffler said companies always value “strong technical and analytical skills that you would get with an engineer, but they seem to be looking just as much for a business orientation. Most companies realize that you can get good operations talent and quite strong analytical

kills these days from a graduate of the business school,” said Stiffler.

She said the business and operational focus in these programs is “what supply chain organizations seem to need.”

However, some high-tech companies won’t hire someone for a supply chain management job unless they have an engineering degree. Some like recruits who have an undergraduate engineering degree  and a MBA.

“A lot of people in the supply chain that have climbed the ladder have that combined engineering and business background,” said Stiffler.