A major lesson that society learned from the disruptions to business and ordinary life that resulted from the worldwide health crisis of 2020-21 was that today’s intricate, multi-country, multi-provider supply chains are fragile. This is perhaps especially true in our age of “just in time” supply, designed expressly to improve business efficiency by drastically reducing the costs of warehousing large reserves of stock.
One major result has been the elevation of a usually “quiet” repertoire of business skills forming background support to frontline, indispensable status. The skills in question, which have long been prized by large companies reliant on components and raw materials procured from far-flung regions of the planet, form the coveted arts of the discipline known as “supply chain management.”
The Covid-19 pandemic has undoubtedly played a major part in foregrounding this essential discipline in the business world, not least because it exposed dormant weaknesses in the pre-pandemic world that became painfully visible during the global crisis. The standard preoccupation before the virus struck was obtaining materials and components at the lowest possible cost regardless of where in the world they came from. There was a certain predictability to the flow of commerce in those days, allowing businesses to deploy technology such as Enterprise Resource Planning (ERP) software to anticipate the pace of fulfillment schedules.
This entailed materials and components remaining interred in large containers atop the ocean waves for weeks at a time, progressing to their respective territorial destinations when required. However, the pandemic led to significant upheaval, resulting in huge bottlenecks at multiple ports across the globe and generating massive imbalances between supply and demand. Seemingly in the blink of an eye, the tried-and-true routines of supply chain management were rendered apparently obsolete amid soaring costs and galloping global inflation.
The effects have not been inconsequential for businesses. For example, established world leaders in enterprise-level hardware and software manufacturing like Hewlett Packard Enterprise Co (HPE) were forced to concede in June 2022 that they missed Wall Street earnings estimates because the global supply chain on which they depended remained unstable, even many months after pandemic restrictions had been widely lifted.
As a result, the ingenuity and creativity of highly skilled supply chain managers have never been more in demand. These are the professionals who are innovating novel solutions, transforming a suddenly precarious system of supply by rethinking supply models in fundamental ways. Necessity, as the old adage says, is the mother of invention, and these professionals are facing that necessity without blinking and devising new solutions to reestablish enduring resilience.
New solutions for post-pandemic supply chain management
The pandemic starkly exposed previously underappreciated vulnerabilities in the globalized supply network, leading savvy supply chain managers to reduce risk by onshoring many of the vendors that their companies had obtained from overseas before the virus struck.
The calculus here is a longer-term one. At first, the move looks costlier when compared to the earlier quest to procure from afar at the lowest prices in the world. However, the pandemic taught the world an important new lesson: slightly increased prices and faster, more reliable delivery is a better approach than delays that drive costs ever-upward and crush revenues. The faster but robustly reliable onshore option results in better profit margins in the post-Covid landscape.
In addition, supply chain managers have seen the risk of companies becoming over-reliant on a small pool of vendors. That may be good for mutual trust in relatively unperturbed times, but it is potentially calamitous in times of extraordinary disruption. Depending on just one or two providers suddenly looks like courting potential disaster. Instead, these professionals have started diversifying their firms’ vendor base, adding new backup providers to their rosters.
Supply chain pros were also quick to detect other vulnerabilities that the pandemic exposed. The disruption to the flow of materials and components has led some to build new, vertically integrated supply chains for their firms. Those companies with the means to do so have either begun acquiring providers of these resources or constructing their own in-house competencies throughout the supply network. Self-reliance has suddenly had a reboot.
Supply chain experts have also drawn on their deep knowledge of data analysis to expand data visibility to vendors and customers alike. This, in turn, is facilitating new integrations with customers’ systems and enabling demonstrable improvements in demand anticipation so that the availability of materials or components can be better predicted.
Finally, supply chain managers were among the first to realize the devastating import of sudden labor shortages caused by large-scale resignations or pandemic-related illnesses. Their response has been to persuade their companies to invest more vigorously in their people, training staff for more advanced work, and, by extension, more advanced rewards through the additional value they create.
What is a supply chain manager?
One professional area of specialty that is composed of the knowledge derived from a range of business-oriented disciplines is the work of the contemporary supply chain manager, a role that became especially pressing in the modern era of globalized trade.
There has been an explosion during this time of companies sourcing essential materials from an intricate pipeline straddling different regions and countries. Businesses operating on the model of this transnational resource procurement process quickly began to realize that optimizing the efficiency, regularity and reliability of this complex pipeline required oversight by a specialist possessing unique skills and aptitudes. That specialist is now known as a supply chain manager.
Businesses learned from the example of trailblazers like Amazon that they could transform their prospects by optimizing their supply chains. Amazon’s revolutionary insight was to eradicate latencies in inventory, a move that helped it to cut prices well beyond what most of its competitors could manage. Drawing on express package delivery leviathan DHL to deal with cumbersome and time-consuming paper-based processing at border checks with a stroke of “simple genius” (i.e., sending the relevant paperwork to customers directly before dispatching the package), Amazon’s delivery process suddenly became impressively quicker.
These innovations come from Amazon’s supply chain managers, who presided over huge cost savings for the company and eradicated bottlenecks that would otherwise have cost the firm and its customers significant time, money and hassle. To answer the question at the head of this section broadly, supply chain managers are the experts who make complex, transnational pipelines function efficiently. Let’s take a deeper dive into what exactly this entails.
What do supply chain managers do?
The answer to this question also fits another one: Why are businesses seeking supply chain managers so avidly today? Essentially, supply chain managers oversee three principal domains: logistics (ensuring that the sales and operations wings of a firm cooperate consistently to optimize procurement), operations (the management of the flow of materials and products, including maintaining warehouse stock at optimal levels and ensuring that transportation networks run smoothly and on time) and, last but not least, finance (maintaining high standards of accuracy in recording the costs of managing inventory efficiently and selecting optimal methods of inventory recovery).
In other words, if a company’s supply chain fails to function properly, so does the business itself. This is why supply chain managers have become so critical to a business’s success and why they are so sought-after by business leaders.
These are experts whose meticulous calculations result in business-critical decisions, such as whether to return manufacturing operations that were exported to foreign territories decades ago back onto national terrain. They will also devise ways of minimizing the “pollutant footprint” of supply chain functioning so that these pipelines become less environmentally damaging and more sustainable – a process requiring continuous vigilance to keep track of newly emerging green technologies. Supply chain managers are the experts that businesses turn to in order to determine which operations can be automated and how Big Data can be harnessed for mind-bogglingly complex calculations capable of both reducing waste and generating the innovation companies need to remain competitive.
The question that may already be forming in the minds of those reading this section is “How do I become a supply chain manager?” Let’s turn to that next.
Becoming a supply chain manager
While it might sound daunting at first for potential entrants to this rewarding and exceptionally well-paid career, today’s supply chain managers require a high level of expertise credentialed at the Master’s degree level. We say “might” advisably because new technologies have made it possible to deliver exceptionally high-quality specialist postgrad degrees like this online.
The Masters in Supply Chain Management on offer at specialist online seats of learning like Kettering University, for example, make it possible to study for this coveted qualification remotely. While Kettering is physically headquartered in Flint, Michigan, online study allows students to learn everything they require for qualification remotely, wherever in the United States they may be located. This particular course is not principally composed of pre-recorded lecture videos but instead allows students to interact in real-time with their professors and fellow students thanks to highly interactive discussion forums and assignments.
There are lots of other ways to break into this field, however. Here are some of the conventional “steps along the way” that most supply chain managers have trodden in order to get to their highly-paid expert roles.
Conventionally, the first step after graduating from high school is to obtain a Bachelor’s degree. Some Bachelor of Science degrees can be found that specialize in supply chain management, but at this early higher education level, that is not strictly essential. Related subject areas, such as business studies, finance or even engineering will be considered relevant.
One highly valuable phase in the path toward a future supply chain manager role is early relevant work experience after obtaining a Bachelor’s degree. Academic knowledge of this complex field is indispensable, but so is practical, real-world experience in related fields. An internship or a job at a more junior level will help equip prospective supply chain managers with the day-to-day pragmatics of the role, whether these roles are in product distribution, supply chain analytics, business operations or inventory management. The arts of interdepartmental communication can be richly acquired during stints in roles like this, and these are skills of pivotal importance to a successful future supply chain manager’s effectiveness.
The optimal time for gaining a Master’s degree is following this type of experience. The competition is exceptionally fierce, so the trend is increasingly to require this level of qualification as a prerequisite for the role.
New challenges for supply chain managers
Perhaps one valuable aspect of the otherwise grim Covid-19 pandemic was its function in reminding everyone just how immensely globally disruptive so-called “Black Swan” events like this can be. Needless to say, given its severe impact on the smooth functioning of transnational supply pipelines, supply chain managers have been taking stock of the effects and devising new strategies of building novel kinds of resilience into these networks, which amount to the life-sustaining circulatory system of the global body.
How, for example, can businesses guard against the interruption of critical components and raw materials? One solution, as described in the opening paragraphs of this article, takes the form of diversifying vendor pools for the supply of these essential provisions and, wherever possible, re-regionalizing and re-localizing – repatriating back home from afar, in short – supply and production networks so that much more of them rest on home soil that is much closer to end markets.
The pandemic foregrounded another dimension of supply chain management – risk management – and elevated it from important to critical status. Supply chain managers have devised new supply-chain risk management practices while strengthening existing ones.
The issue that has now been pushed by innovative managers to the top of the risk management priority list is the proactive monitoring of supplier risks for a greater awareness of the location of and key risks faced by primary-tier suppliers. This is now being extended to secondary and tertiary-level suppliers (and beyond) in order to anticipate and deploy alternatives to any upcoming supply shortages in critical materials such as semiconductors. Supply chain managers understood quickly that materials like this tend to get tangled up and bottlenecked in deeper tiers of the supply chain, making advance warning signals far more important for supplies of this nature.
Supply chain experts have also been swift to appreciate the crucial role of new digital tools that can enable remote working, which rose to prominence during the pandemic as a means of survival for businesses as well as educational establishments. These technologies, in conjunction with advanced analytics tools, played a significant role in reducing the more pronounced effects of the pandemic on the supply of vital provisions. They accomplished this by enabling supply chain professionals to remain in constant personal communication with vendors and other wings of the business, even while they were subject to lockdowns and self-isolation.
Another aspect of technology that these professionals are using to manage risk more accurately might be termed the “digitization of visibility.” This is not about pixels on computer screens but rather a new form of data computation that grants a real-time overview of where materials and components are at any point along the supply chain. It amounts to a real-time, end-to-end performance management initiative that functions as a powerful enabler of greater supply chain visibility that more and more firms, under the guidance of tech-savvy supply chain managers, are rolling out in the post-pandemic world.
Related digital tools are also being deployed more widely, again thanks to the efforts of supply chain managers. Examples include tools focusing on enhanced planning for specific segments of the supply chain (such as logistics, for example) and new network modeling tools to refine supply chain design.
To this end, supply chain managers recognize that talent with the requisite digital skills will be required to implement, interpret, maintain and innovate these high-tech instruments, with the result being that more companies in the post-pandemic era are beginning to invest in bridging this skills gap.
According to the global management consulting firm McKinsey & Company, this is taking the form of a blend of initiatives, including reskilling existing staff, redeploying existing talent, recruiting new employees who already have the requisite skills, and hiring specialist contractors for particular, time-limited projects.
A brief “person spec”
The mettle of supply chain managers was given a trial by fire during the worldwide viral pandemic. They rose to the challenge admirably, showing an impressively agile ability to conjure solutions to seemingly insurmountable obstacles in the supply chain and subsequently “baking into the cake” risk reduction and planning remedies that will help supply chains remain more functional should another seismic event like this arise.
They combine an aptitude for high-level educational attainment, grace under fire, and a superb capacity to innovate a way through seemingly intractable obstacles.
To paraphrase Oscar Wilde, supply chain managers share the belief that to lose business due to one Black Swan event is unfortunate, but to lose it to two is careless.