• It is Demand Driven Market. It is Demand Driven Economy
• Of Knowledge and Skill – Skill is dominant considering the fact knowledge is all pervasive. The need for a trainer or teacher is of value if their role is to transfer information and knowledge. Today’s the role of a trainer or teacher is to enforce and embed a thinking pattern is capable of filtering the noisy environment we live in. I consider noise as any external factor that influences or alters our thinking pattern towards a state of insecurity.
• Business deliver products and services
• It is no longer product or service that competes in the market. And today, business focus is on consumer experience. Products and Services are designed and produced for unique consumer experience.
• Engineering and Technology drive Innovation. Innovation is dependent on creativity, creativity is dependent on our ability to think, and thinking is a factor of intelligence.
• We evolved from Industry Revolution. Where products were produced on based on the principles of mechanical automation. Advances in Electronics Engineering and allied engineering contributed to advances in the way products and services evolved.
• One or more engineering disciplines contributed to advancing innovation. Electronics and Communication. Electricals and Electronics.
• Consumer Experience is built on the need for social validation. Social Validation has become a dominant factor for success. Products and Services are built on the need for social validation.
• Innovation – The need to innovate is built on the bandwidth of patience and tolerance. Patience and Tolerance contributes to the ability to endure. Endurance is referred as the Mental Stamina.
• Humans are fundamentally control freaks. Complexity drives us crazy as it pulls us away from the comfort zones. Comfort zone is the zone of control. What is not comprehensible is out of our comfort zones.
• Comfort zones provides us the physical and emotional security. Learning is a Physical activity.
• The more we get freaked out, we seek more control. To control is to give or follow instructions. As control freaks we care less about logic but more about results.
• Thinking is divided as convergent thinking and divergent thinking. Divergence thinking stimulates creativity and convergent thinking stimulates innovation. Innovation drives the need to produce products and services that keeps consumers within the comfort zones. Planning is a creative thinking process which demands divergence thinking. Universe is an example for divergence thinking and earth is an example of convergence thinking.
• Consumers are becoming more demand driven.
• Sourcing, Making, Delivering, Returns and Planning are the components of Supply Chain, Supply Network, Business Network. Between Business Networks relationships are to be sustained. Relationships are built on trust. And trust is built on understanding. Understanding is a divergence thinking activity.
• Products and Services produced for Life has now become Products and Services for Lifestyle.
• Lifestyle has its change and dynamics which is driving the need to build products and services that are both innovative and sustains social validation.
• Products and Services meant for Social Life, Personal Life, and Professional Life has now evolved as Products and Services for Social Lifestyle, Personal Lifestyle, and Professional Lifestyle.
• The need for collaboration for business is built on their ability to form and sustain relationships.
• Comfort zones offers security. The discomfort zone provides scope for curiosity and anxiety. The uncertainty of the unknown and unpredictability of our efforts in the discomfort zone has paved way for products and services fine tuned to sustain comfort. The inability to manage anxiety has led to violence. It takes endurance to live in the discomfort zone. Learning is out of comfort zone activity.
• The possibility of these subjects being part of the main academic stream is less possible due to lack of domain experts as part of the academic world. The domain experts or subject matter experts are part of the corporate world and they do not meet the academic requirements to become a lecturer or a professor. Again, even if they do meet, the culture of the academic world do not fit the value system of the corporate leaders. They are misfit in the academic world. Quite naturally, what we produce today from the academic world in terms of graduates are mere degree holders incapable of surviving in the corporate world.

Since the term “supply chain” contains the word “supply”, many people naturally assume that supply chain must have something to do with suppliers (i.e. purchasing or procurement). While it is true that supply chain management does encompass the purchasing and procurement functions, supply chain management actually extends well beyond those areas. Supply chain management is the practice of manufacturing and distributing physical goods as efficiently as possible.

Supply chain management encompasses the entire process of manufacturing and distributing physical goods, from supplier’s supplier to customer’s customer. Business functions that are within the realm of supply chain management include: forecasting and planning, procurement and purchasing, manufacturing and assembly, warehousing and distribution, shipping and transportation, returns and refurbishment, inventory management and order management. Or, stated more simply, supply chain management includes the functions: plan, buy, make, store, move, sell and return.

For example, let’s look at [a very simplified version of] the processes that created the computer monitor upon which you are probably reading this text. The monitor was most likely assembled using components supplied by many companies in several different countries. The circuit boards and computer chips that control the monitor’s functions may have been manufactured in Singapore or Malaysia. The CRT may have been manufactured in Mexico. The plastic casing may have been injection-molded in China. And the final assembly of those components may have taken place in Texas. What if the Texas plant is ready to assemble 1,000 monitors, but the plastic casings didn’t arrive from China in time? And what if a computer company (e.g. Compaq) is waiting for those monitors so they can package them together with 1,000 computers? And what if a major customer of Compaq’s, such as Best Buy, has already run ads to promote those computer packages because Best Buy was counting on having them delivered tomorrow? In this scenario, the whole system just broke down, and is going to cause a lot of embarrassment, not to mention a lot of money, to Compaq and Best Buy, and is going to leave a lot of end consumers very disappointed, just because a little injection molding company in China didn’t deliver some components in time.

“Couldn’t the monitor assembler in Texas just buy a lot of plastic casings ahead of time and store them in a warehouse until they’re needed?” Yes, but inventory costs money; a lot of money. And what if that Texas assembler also bought all of the other components well ahead of time and stored them in warehouses until they’re needed? Now we need to add the cost of extra warehousing space to the equation, which actually is paltry in comparison to the cost of all that inventory just sitting in warehouses collecting dust and becoming obsolete. And what if each of the component manufacturers also adopted the same philosophy and stored raw materials in warehouses close to their facilities in Singapore, Mexico, etc.? With that methodology of inventory management, the cost of manufacturing that monitor could easily double, which means that the price the end consumer has to pay at Best Buy would double.

But, with good supply chain management, the Texas assembler can be assured of having the right components available in the right place at the right time without the need for storing massive quantities of expensive “safety stock” inventory. Supply chain management is all about making that process, from sourcing those components to delivering the finished goods to the customer, more efficient (i.e. lower cost) and reliable.

What is Logistics?

Logistics is the portion of supply chain management that encompasses distribution, transportation and inventory management. To put it in context with the simplified description given above regarding the supply chain management functions of plan, buy, make, store, move, sell and return, logistics is the “store” and “move” functions.

It is not unusual for transportation costs alone to be more than 10% of revenue. For many companies, transportation is the single largest cost element on their financial statements. Transportation costs are often double the expense of warehousing and inventory carrying costs (which means that warehousing and inventory costs can be 5% of revenue, which is no small matter). And every dollar saved in transportation costs goes straight to the bottom line. So, why don’t corporations focus more attention on streamlining logistics to reduce costs?

The science of planning and carrying out the movement and maintenance of forces. In its most comprehensive sense, those aspects of military operations which deal with: design and development, acquisition, storage, movement, distribution, maintenance, vacuation, and disposition of materiel; movement, evacuation, and hospitalization of personnel; acquisition or construction, main-
tenance, operation, and disposition of facilities; and acquisition or furnishing of services.

From Joint Publication 4.0, Doctrine for Logistic Support of Joint Operations ( 6 April 2000 )

The science of logistics concerns the integration of strategic, operational, and tactical sustainment efforts within the theater, while cheduling the mobilization and deployment of units, personnel, equipment, and supplies in support of the employment concept of a geographic combatant commander. The relative combat power that military forces can bring to bear against an enemy is
constrained by a nation’s capability to plan for, gain access to, and deliver forces and materiel to the required points of application across the range of military operations.

Supply is the function of acquiring, managing, receiving, storing, and issuing the materiel required by forces.

Maintenance includes actions taken to keep materiel in a serviceable condition or to upgrade its capability.

Transportation is the movement of units, personnel, equipment, and supplies from the point of origin to the final destination.

Civil engineering provides the construction, operation, maintenance, damage repair, and reconstitution of facilities, roads, and utilities and logistic infrastructure.

Health services includes medical evacuation, hospitalization, medical logistics, medical laboratory services, blood management, vector control, preventive medicine services, veterinary services, and dental services.

Other services are nonmaterial support activities provided by Service personnel and the logistic community that are essential to force support. For each of the above functional areas, the combatant commander should consider these four elements of the joint theater logistic process: procurement and contracting, distribution, sustainment, and disposition and disposal.

(From “Word Origins and Their Romantic Stories” by Wilfred Funk, Litt. D.)

“In addition to Tactics and Strategy, the French invented a third military science which they called Logistique, our Logistics. This
is the business of moving, supplying and quartering soldiers. It stems from the French Loger, which means to quarter”, that is, “to find lodgings.”.”

(From “Logistics in World War II – Final Report of the Army Service Forces” published by the Center of Military History (p. 251))

“The security of the United States presents a complex problem in logistic preparedness. How should we plan, and how can we organize for national security? What should be the place of logistics in the organization? What should be the relationship of logistic agencies to the combat arms and to other Government agencies? What is the best internal organization for accomplishing logistic functions? How shall we provide for the continuous research and development of new weapons; for adequate quantities of equip-
ment and sufficient numbers of trained forces to meet sudden attack; for rapid manpower, industrial, and Government mobilization?

These are questions for which we must find satisfactory answers. They must be approached objectively, intelligently, and with courage. It is inevitable that the human tendencies to revert to old habits of thought and action, to promote segmentary interest, to protect the established order, to resist change, to be swayed by sentiment, will exert powerful influences. These tendencies have
no place in our efforts to insure our Nation’s security. Realism demands that we rise above lesser motivations and loyalties and work always for the highest good of the Nation.”

Quote from A.C. P. Wavell, Speaking Generally, (London, 1946) page 78-9

“The more I see of war, the more I realize how it all depends on administration and transportation… It takes little skill or imagination to see where you would like your army to be and when; it takes much knowledge and hard work to know where you can place our forces and whether you can maintain them there. A real knowledge of supply and movement factors must be the basis of every leader’s plan; only then can he know how and when to take risks with those factors, and battles are won only by taking risks.”

Lt Col George C. Thorpe, Pure Logistics, 1917

Logistics…”embraces not merely the traditional functions of supply and transportation in the field, but also war finance, ship con-
struction, munitions manufacture and other aspects of war economy.”

General Dwight D. Eisenhower

You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.

General Antoine Henri Jomini, Precis de l’Art de la Guerre (The Art of War), 1838

Logistics comprises the means and arrangements which work out the plans of strategy and tactics. Strategy decides where to act; logistics brings the troops to this point.

General Antoine Henri Jomini

Logistics is the “practical art of moving armies.”

Thomas Jefferson
Experience has taught me that manufacturers are now as necessary to our independence as to our comfort.

Joint Pub 4-0, Doctrine for Logistics Support of Joint Operations, Sep 25, 1992
Seldom will all logistics principles exert equal influence; usually one or two will dominate in any given situation. Identifying those principles that have priority in a specific situation is essential to establishing effective support.

Admiral Hyman Rickover
To inquire if and where we made mistakes is not to apologize. War is replete with mistakes because it is full of improvisations. In war we are always doing something for the first time. It would be a miracle if what we improvised under the stress of war should be perfect.

Benjamin Franklin
A little neglect may breed mischief: for want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost.

Capt John P. Laverdure, Scott Air Force Base, HQ Air Mobility Command, 1996
You realize when shoeing the horse that the shoe may be thrown–possibly causing the horse to run, so you have a mule on
standby to get the rider to the war.

Capt John P. Laverdure, Scott Air Force Base, HQ Air Mobility Command, 1996
Logistics Planning – The wisdom to realize when working on plan A, you’ll run into conflicts in executing plan B and being properly
prepared, and successfully executing plan E.M. Cox

Lean forward. It’s always better to fall on your face than on your backside.
Behind every great leader there was an even greater logistician.
RADM Henry E. Eccles, USN, Ret, Logistics in the National Defense, 1959
The programs of training and exercises form the final test of logistics readiness. Since the majority of junior officers and enlisted
men in the logistics services are specialized in a technical field, sound technical training is their fundamental preparation for war.
In addition, however, specific attention must be paid to the development of fundamental discipline, leadership, and personal versa-
tility which are so vital to efficient logistics service under wartime conditions.

James A. Huston, The Sinews of War: Army Logistics 1775-1953, 1966
“Logistics…in the broadest sense, the three big M’s of warfare–material, movement, and maintenance. If international politics is
‘the art of the possible,’ and war is its instrument, logistics is the art of defining and extending the possible. It provides the sub-
stance that physically permits an army to live and move and have its being.”

Captain A.T. Mahan, Armaments and Arbitration, 1912
Logistics…as vital to military success as daily food is to daily work.

Air Force Manual 1-1, Basic Aerospace Doctrine of the United States Air Force, Essay T, March 1992
The ideal for all military forces is to reduce their logistical requirements to necessities only.

Joint Pub 1, Joint Warfare of the U.S. Armed Forces, November 1991
Logistics sets the campaign’s operational limits.
Rear Admiral Henry Eccles, U.S. Navy
The essence of flexibility is in the mind of the commander; the substance of flexibility is in logistics.

Anonymous
Logistics must be simple–everyone thinks they’re an expert.

Alexander
My logisticians are a humorless lot…they know if my campaign fails, they are the first ones I will slay.

CLM-National What It’s All About
Logistics: The Profession – As a business professional with a vested career interest in the field of logistics, you are a part of a
highly dynamic profession: current global developments and technological innovations are impacting logistics today as never
before. While the logistics function’s contributions to a firm’s competitive strength have often been “invisible” in the past, many fac-
tors have coalesced to heighten its importance and visibility in the 1990s and beyond.

Dwight D. Eisenhower, British Army Doctrine Publication, Volume 3, Logistics (June 1996) p. 1-2
Throughout the struggle, it was in his logistic inability to maintain his armies in the field that the enemy’s fatal weakness lay. Cour-
age his forces had in full measure, but courage was not enough. Reinforcements failed to arrive, weapons, ammunition and food
alike ran short, and the dearth of fuel caused their powers of tactical mobility to dwindle to the vanishing point. In the last stages of
the campaign they could do little more than wait for the Allied advance to sweep over them.

Lt Gen Alfred M. Gray, Jr., Marine Corps Gazette (July 1987)
As we select our forces and plan our operations,….(w)e must understand how logistics can impact on our concepts of operation…
Commanders must base all their concepts of operations on what they know they can do logistically.

Tom Clancy, Red Storm Rising
The tactics…no, amateurs discuss tactics,…. Professional soldiers study logistics.

The Emerging Supply Chain Management Profession

By John Dischinger, David J. Closs, Eileen McCulloch, Cheri Speier, William Grenoble, and Donna Marshall — 1/1/2006

Over the past several years, the visibility of supply chain management as a collection of diverse, critical skills has increased substantially.  Supply chain management (SCM) has evolved from a loose affiliation among functions—such as purchasing, manufacturing, and logistics—to an integrated and cross-functional discipline. Consistent with this evolution, an increasing number of educational institutions are offering supply chain management degrees.  Similarly, many professional organizations are modifying their names and broadening their charters to cover the full spectrum of supply chain activities.

When it comes to career progression and human resource management, however, most firms continue to focus on individual functions. A more formalized characterization of the SCM profession is obviously needed. Continued progress requires a more broadly accepted definition of SCM and a definition of the requisite experiences needed to achieve professional status in this business discipline.

Toward that end, this article describes the “model” skills and experiences required to become a SCM professional. The description is based on an internal assessment of IBM human resource practices and benchmarking of these practices with other organizations. (At the end of this article, we include a case study of IBM’s successful approach to developing supply chain management professionals.) Our research indicates that integrated SCM has evolved to the point that individuals working in this field need to have career guidance to achieve the level of a “supply chain professional.”

The needed definitions will help the supply chain community—in particular, practitioners and the organizations in which they work, trade and professional associations, and academic institutions—to develop and apply a common set of educational and experiential requirements for professional development.  Our discussion establishes why a formal SCM profession should be recognized, explains the value proposition of this profession across four key dimensions, identifies the core skills and capabilities needed, and sets a “call to action” for industry, associations, and academia.

Defining the Profession
Prior to characterizing a supply chain professional, it is necessary to define the SCM profession.  The Council of Supply Chain Management Professionals (CSCMP) provides the following definition:
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

This integrated view of the supply chain has evolved over many decades.  The roots of this perspective date back to the early 1960s when transportation managers and researchers realized that transportation decisions affect other activities of the firm, particularly inventory management and production. The emerging concept of logistics management demonstrated that companies could trade-off functional costs. They could, for example, spend more on premium transportation to reduce inventory and, potentially, total cost.

Interest in integration heightened during the 1990s under the banner of supply chain management. While logistics was traditionally viewed as an individual function focused on distributing finished goods to customers, high-performance supply chain management required that logistics also coordinate with inbound supply to minimize congestion and maximize utilization. Supply chain management affected other parts of the firm as well. Manufacturing, for example, was no longer viewed as a separate function but as a value creation process in the larger supply chain context.  SCM focused on breaking down functional silos to create integrated processes.  Firms embraced a total systems approach to facilitate coordination internally and with supply chain partners, often using enhanced communication and information technologies.

The desire for increased integration also was evident in the actions of professional associations and universities. CSCMP was originally founded in 1963 as the National Council of Physical Distribution Management.  As the value of functional integration became increasingly evident, the association changed its name first to the Council of Logistics Management in 1985 and more recently to the Council of Supply Chain Management Professionals in 2005.  Other organizations have undergone similar transformations replacing a narrow, functional focus with a broader, integrated supply chain perspective. Two examples are the Institute for Supply Management (ISM) (formerly the National Association of Purchasing Managers) and APICS-the Association for Operations Management (formerly the American Production and Inventory Control Society).  In addition, new associations have been formed. One prominent example is the Supply-Chain Council, whose mission is to define critical processes, practices, and metrics in the supply chain.

Finally, universities have also participated in this evolution.  For example, all four institutions participating in this research initiative (Arizona State, Michigan State, Penn State, and University College, Dublin) have refined their academic and research programs to offer students an integrated supply chain perspective.

Roles, Responsibilities, and Skill Sets
How should we define the ideal supply chain management professional? What is the role of this professional? What responsibilities should he or she have? How might supply chain professionals be utilized within a corporation’s supply chain, and what skills and experiences should they have at their disposal?

First and foremost, a SCM professional should have experience in multiple supply chain functions and must be able to lead the design, implementation, and management of cross-functional supply chain solutions. While these solutions could be completely internal, they generally extend outside of the enterprise and involve multiple tiers of suppliers and customers.  These solutions require the integration and coordination of multiple processes including:

• Product/service development launch.
• Supplier relationship collaboration.
• Manufacturing customization.
• Demand planning responsiveness.
• Order fulfillment/service delivery.
• Customer relationship collaboration.
• Life cycle support.
• Reverse logistics.

At a senior level, a SCM professional evaluates the trade-offs between supply chain functions and organizations. To effectively identify and evaluate these trade-offs, he or she must blend sufficient depth of functional knowledge with the understanding of cross-functional and cross-organizational collaboration. For example, a SCM professional must be able to balance customer service and quality with total supply chain costs. To perform this balancing act successfully, the professional must consider all of the supply chain planning, management, and measurement activities involved in purchasing, manufacturing, and logistics management. Importantly, this assessment includes products, services and solutions, and related information.

In addition to identifying the trade-offs, the supply chain manager must be capable of developing and implementing integrated and comprehensive supply chain solutions. Innovative, end-to-end supply chain solutions will need to be implemented on a broad business scale-across the enterprise on a global basis.

The professional also needs to disseminate knowledge that will help their supply chain partners more effectively design and manage their own supply chains. They also should be able to apply the principles and methodologies of SCM to other parts of the organization and define enterprise-level architecture for complex solutions. In essence, they need to be supply chain consultants.  Finally, the professional must be able to analyze the business performance of their supply chains to facilitate sustainable competitive advantage.

The SCM professional needs to develop the skills and capabilities to operate effectively in this context.  Developing the right skills and knowledge can enhance not only supply chain performance, but also enterprise performance.  Supply chain managers can no longer rely solely on the focused functional skills of the past to ensure a bright future. Instead, they need to develop cross-functional management skills that must be integrated and aligned with the company’s overall business strategies. In many cases, this will require a redefinition of the skills, roles, and responsibilities of the supply chain professional. It is apparent that a variety of skills are needed to manage the complexity and uncertainty inherent in SCM.  Furthermore, supply chain managers need to be open to continual learning as today’s supply chain skills may not maintain relevance for the future.

The importance of possessing the right supply chain skills is underscored by Myers et al. (2004).1 Their study demonstrates that a supply chain manager’s experience and education does not predict work performance; instead job skills predict success.  Therefore, it is important to provide aspiring SCM professionals with the appropriate opportunities and guidance to develop the job skills that will enhance their potential for success.

While researchers and practitioners alike are calling for the development of the SCM profession, there is some disagreement over how this process will evolve.  Most agree that context-independent skills are important for supply chain professionals. These include broader managerial capabilities such as people skills, social skills, coordination, change management, communication, decision-making skills, problem-solving skills, time management, and cultural skills.

There is some disagreement, however, regarding technical and technological skills.  Some researchers have suggested that the SCM profession should not include technical or technological skills.  Others consider such skills to be fundamental for developing cross-functional, cross-company managerial competencies.  Some experts place special emphasis on IT skills and expertise.  From the literature, however, it is clear that researchers are not advocating deep technical or technological skills.  The consensus seems to be that supply chain professionals not only must be competent in their technical expertise but also must possess more general skills that are context-independent and can cut across boundaries of function and organization.

After reviewing the literature and conducting our own interviews and discussions, we believe that a true SCM professional must have skills and capabilities in the following five areas: functional, technical, leadership, global management, and experience and credibility.

Functional Skills.  A SCM professional should have established subject-matter expertise and relevant skills in several of the major supply chain functions including procurement, demand/supply planning, manufacturing, global logistics, and customer fulfillment. The individual will have worked at the operational level in multiple functions to fully understand the day-to-day processes, challenges, and issues.  This experience should include a combination of hands-on operational and managerial work.

Technical skills.  Given the increasing dependence of the supply chain on technology, a true SCM professional must have experience in applying information technology (IT) effectively.  This does not suggest that a SCM professional must be experienced in technology development. He or she should, however, have dealt with the challenges of technology selection, implementation, and application.  A well-developed understanding of the relationship between supply chain processes and execution management solutions is part of this skill set as well.

Leadership skills. A SCM professional must demonstrate a broad range of leadership capabilities. He or she must be able to lead projects involving customers, partners, and/or competitors while effectively interacting with both internal and external executives.  A SCM professional also must demonstrate leadership and experience in complex, matrixed business environments. This experience will ensure that supply chain initiatives and resources are managed and integrated effectively. Other broad leadership skills relate to communication, negotiation, problem solving, team leadership, and project management

Global Management. In today’s boundary-spanning supply chain environment, a SCM professional must have global planning and operations experience.  This experience provides the insight into the global supply chain environment and its challenges.  Ideally, professionals will have had one or two experiences working outside of their home country.  The next best thing is to have extensive involvement in and responsibility for global planning and operations.

Experience and Credibility.  A SCM professional must possess sufficient knowledge, breadth, and experience to evaluate the competitive environment, to conceptualize strategy, to assess and organize solutions, and to implement change both in the organization and with supply chain partners.  This capability is achieved by developing experience and credibility both within the enterprise and externally. External credibility can be achieved through a variety of activities, such as participation in industry conferences and associations, receiving awards and patents, and publication in business/professional journals.

Call to Action
Current research indicates that the widely accepted traditional model for executive career paths, originally identified in 1956 by William H. Whyte in Organization Man, is changing. Whyte’s model suggested that top leaders have a university education (ideally from an Ivy League school) and internal training as they climbed to the top executive level as a lifelong employee of their company.  Cappelli and Hamori, however, recently completed a study that compares Fortune 100 executives from 1980 with their counterparts in 2001.2 The researchers determined that today’s top executives are younger and more gender diverse. They generally were promoted faster, worked for multiple companies, and were less likely to have worked in the manufacturing industry. Finally, these men and women increasingly hold an advanced degree (primarily in business or law) but fewer of these degrees come from Ivy League schools. Talent acquisition, promotion, and executive development in this context require a fresh look at the traditional human resource processes.

In a similar manner, SCM professional development will proceed differently today than it did in the past. As a result, human resources and supply chain departments will need to collaborate more and change their expectations regarding the source of future talent. The solid lines in Exhibit 1 illustrate what a typical career path looked like in the past. Talent often rose through the ranks in one of the single functional areas of demand/supply planning, procurement, manufacturing, logistics, or fulfillment.  While the resulting individuals were thoroughly grounded in their functions, they did not always understand the integrated processes or the functional trade-offs.  The dotted lines in Exhibit 1 illustrate the cross-functional career path necessary to develop today’s supply chain professional.  (The IBM case study at the end of this article will offer further illustrations.)

As organizational levels become flatter and holistic business skills become more important for supply chain professionals, companies will need to provide different training models. Certifications, for example, are particularly useful for a workforce without formal supply chain training. The certification process also may broaden the skill sets of mid-level managers who have earned university degrees in SCM. In addition, continuous education programs can expose supply chain managers to changes in technology while challenging their acceptance of current industry paradigms.  To maximize the value of these types of programs, companies will need to develop strategic relationships with educational institutions.

Now is the time for businesses, professional organizations, and educational institutions to identify the new knowledge and skill sets SCM professionals need.  Companies and professional organizations could develop the criteria and guidelines independently; yet this approach would result in confusing and inconsistent definitions.  A better approach is to define standards that are recognized and applicable across companies and geographic locations.  The professional organizations (APICS, CSCMP and ISM) are moving toward standardization through various types of certification.  But certification examinations alone tend to employ multiple choice tests that emphasize tactical functional knowledge.  As emphasized throughout this article, a true supply chain professional requires both the breadth of experience and ability to integrate—neither of which can be evaluated through multiple choice examinations.

To develop a strong supply chain organization, companies must take on the daunting task of identifying new talent and training their professionals to meet needs that in some cases are as-yet unidentified. They also need to perform effective succession planning that allows them to retain and develop their key investments.

Companies with the most successful and competitive supply chains recognize that technical knowledge and training by themselves are insufficient.  SCM professionals must be able to meet the rapid changes of a global economy that demands greater connectivity across companies and geographies and the use of rapidly evolving technologies. They must also have a greater breadth of knowledge in other functional areas and must possess enhanced leadership and communication skills to enable them to become an adaptable resource and ensure competitive advantage into the future.  The following case example illustrates how supply chain leader IBM is meeting this challenge.

Depth and Breadth in the On-Demand Supply Chain

A Case study on IBM

IBM developed the  supply chain professional career path in support of its evolving view of the supply chain itself. Specifically, IBM is transforming its supply chain into one that is on-demand. An on-demand supply chain is integrated end-to-end across the company’s entire operations and with key partners, suppliers, and clients. It can sense and respond with flexibility and speed to any client demand, market opportunity or change in the marketplace—no matter how frequent or sudden. The on-demand supply chain leads to competitive advantages than enable the company to gain market share, boost client satisfaction, and effectively adapt to any changes in the market

As part of this transformation, IBM is developing talent that has deep functional expertise in such areas as procurement and logistics as well as cross-functional breadth.  Here is the IBM story.

History of IBM’s Supply Chain
Previously, IBM’s supply chain was fragmented into several individual business units. Supply chain operations consisted of the unconnected activities of negotiating contracts; procuring parts; transporting them to manufacturing; loading them onto planes, trains, trucks, and ships; and then shipping them to clients’ loading docks on time. In general, the company viewed its supply chain as a cost of doing business, rather than a strategic weapon.

In the late 1990s, IBM changed its perspective on supply chain management. Instead of looking at it as just overhead, the company considered how the supply chain could provide value to the enterprise and its shareholders. To begin, IBM’s goal was—and still is—to revolutionize the very concept of a supply chain by transforming it into a powerful force that could drive efficiency, make life easier for its clients, and improve customer satisfaction with IBM as a strategic partner. If that could be achieved, IBM believed that it could grow revenue while reducing expenses.  Of course, this meant dramatically improving operations.  It also meant making the supply chain accountable to the business and establishing fundamentally different expectations of how the supply chain produces benefits.

To achieve this goal, IBM in 2002 created a single business unit called the Integrated Supply Chain (ISC). Overnight, the ISC emerged with 19,000 employees in 56 countries responsible for $40 billion in spending. Exhibit 2 illustrates the ISC organizational structure.  The goal of the ISC was to build a supply chain that stretched from “opportunity to cash” —meaning from the raw materials at one end of the manufacturing operation to the ongoing support it provided for clients at the other. Importantly, ISC would collaborate with every aspect of IBM to play an active role in aligning and integrating the company horizontally.

The philosophy was simple: A supply chain is greater than the sum of its parts. IBM focused not only on preserving and enhancing functional excellence but also on creating the capability to see, understand, and leverage the interdependencies across the entire supply chain. IBM’s approach to managing the supply chain allows it to do both.

For one thing, IBM didn’t disband the supply chain silos because it would continue to need experts with deep knowledge and experience in each area of the supply chain. Yet IBM also needed visibility across the supply chain.  To develop this capability, the company formed three teams to manage issues cross-functionally in the areas of operations, strategy, and talent development.  This management approach helped IBM make decisions faster, better, and more consistently across the supply chain.

To reinforce enterprise collaboration, changes were made to the measurement system.  IBM previously measured execution solely within the supply chain business functions, such as logistics and procurement.  If logistics met its commitments, the logistics team was happy.  Today, the entire ISC must achieve integrated goals such as meeting or exceeding customer expectations when completing orders.  In other words, the traditional methods of evaluating performance, such as time to market, were no longer sufficient.  IBM also needed to capture critical quantitative data across and between functions as well as qualitative insight into their supplier and partner relationships. IBM adapted its measurement system to support the dynamics of a truly end-to-end operation.

By now, there’s no doubt that the supply chain will continue to be a driving force in the business.  As a result of the management and measurement changes, IBM’s inventory is at the lowest it’s been in more than 30 years. Further, the ISC reduced supply chain expenses by nearly $300 million in 2004.  The reduced assets and expenses provided cash that could be used for acquisitions to make IBM more competitive.  In addition, the IBM sales team opened up about 25 percent of their time to uncover new client opportunities because of reduced time required to follow-up on orders.

Career Path Skills
In the process of establishing this highly integrated organization, a clear need emerged for a talent pool with the breadth and depth of knowledge and experiences across the on-demand supply chain. Supply chain career advancement had traditionally been handled within each of the functional/process areas (for example, procurement, logistics, manufacturing, fulfillment, and demand/supply planning).  This model worked to develop subject-matter expertise. And while this in-depth expertise continues to be critical to the business, IBM’s supply chain professionals today also require a broad understanding of the entire supply chain in order to design, develop, and deploy integrated solutions.

To address this need, IBM created a formal supply chain management (SCM) career path targeted at consistently high-performing employees and managers who seek to learn and apply broad, cross-functional supply chain expertise and want to be recognized as “supply chain management professionals.” These professionals work to optimize performance and drive innovation across the entire supply chain—from addressing initial solution requirements through post-installation support.  The following outlines the key objectives of the SCM program and relates the experiences of  IBM supply chain professionals who are succeeding in this new environment.

1. Broaden Employees’ Careers
The SCM career path encourages and facilitates opportunities to develop a breadth of skills through cross-functional movement and experiences. A related benefit is the development of a community of SCM professionals for critical internal supply chain tasks and external customer engagements.

Kim Ford, IBM Manager. Since she started with IBM nearly seven years ago, Kim has held several postions in procurement and currently works in manufacturing.

“Increasingly, there’s a need for people with a broad set of skills across multiple dimensions in supply chain management. Our competitive advantage comes from our collective supply chain experience; the stronger and more informed we are as individuals, the better equipped we are to offer new and innovative solutions to the business and to our clients.”

2. Drive Culture Change
The career path development provides a framework for challenging existing silo thinking through cross-functional assignments and responsibilities.  It promotes cross-functional innovation and collaboration, and eventually develops a SCM leadership pipeline.

Dan Carrell, IBM Executive. In his seven years with IBM, Dan has worked in logistics and with the management teams of global procurement.

“My experiences have helped me develop a deeper understanding of the Integrated Supply Chain and a strong network of colleagues with whom to share ideas and seek input. Making the right connections brings our work back to a personal level. The more comfortable we are reaching out to our extended team, the easier it will be for us to optimize our collective efforts.”

3. Promote End-to-End Thinking
Because of SCM’s natural cross-functional focus, the career program encourages end-to-end thinking and fosters innovative solutions to supply chain challenges.  IBM’s supply chain professionals can serve as a “resource pool” beyond ISC for all of the organization where end-to-end process management and cross-functional planning skills are critical.

Jean-Luc Perret, IBM France Manager. Jean-Luc has worked in several IBM business units and most areas of the supply chain during his 34 years at IBM.

“I’ve seen the evolution of our organization. Moving around has afforded me the luxury of experience and credibility. I recognize both the strengths and limitations of many of the functions and can examine issues, identify problems, and consider downstream implications pretty quickly…

“To be on demand, we must approach problems and opportunities more consistently throughout the organization. It’s a matter of striking the right balance. If we cultivate a spirit of cooperation between employees with broader supply chain knowledge and those with traditional functional expertise, the possibilities are endless.”

4. Improve Client Satisfaction
With the development of the SCM professional, customers will have access to cross functionally experienced practitioners in addition to the existing functional experts.

Denise Amendola, IBM Executive. Denise has been with IBM for 21 years, starting in programming and progressing through a variety of supply chain-related assignments.

“When I started at IBM, we didn’t have to look over our shoulder much—we were our own competition, [because we] focused primarily on technology and our products. Things like on-time delivery and how we communicated with clients weren’t as important. Now, our success hinges on the total client experience. That means being on top of everything and taking nothing for granted.”

1 Myers, M.B., Griffith, D.A., Daugherty, P.J., and Lusch, R.F. (2004), “Maximizing the Human Capital Equation in Logistics: Education, Experience, and Skills,” Journal of Business Logistics, 25(1), pp. 211-232.
2 The Path to the Top: Changes in the Attributes and Careers of Corporate Executives, 1980-2001, Peter Cappelli and Monika Hamori, May 2004, National Bureau of Economic Research, http://www.nber.org/papers/w10507.   © 2006, Reed Business Information, a division of Reed Elsevier Inc.

Source: http://www.rlec.org

Logistics – (military definition)
The science of planning and carrying out the movement and maintenance of forces…. those aspects of military operations that deal with the design and development, acquisition, storage, movement, distribution, maintenance, evacuation and disposition of material; movement, evacuation, and hospitalization of personnel; acquisition of construction, maintenance, operation and disposition of facilities; and acquisition of furnishing of services. — (JCS Pub 1-02 excerpt)

Logistics
The procurement, maintenance, distribution, and replacement of personnel and materiel. — (Websters Dictionary)

Logistics
1. The branch of military operations that deals with the procurement, distribution, maintenance, and replacement of materiel and personnel. 2. The management of the details of an operation.
[French logistiques, from logistique, logic (perhaps influenced by loger, to quarter), from Medieval Latin logisticus, of calculation.] — (American Heritage Dictionary)

Logistics
…the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.” Note that this definition includes inbound, outbound, internal, and external movements, and return of materials for environmental purposes. — (Reference: Council of Logistics Management, http://www.clm1.org/mission.html, 12 Feb 98)

Logistics
The process of planning, implementing, and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer requirements. — (Reference: Canadian Association of Logistics Management, http://www.calm.org/calm/AboutCALM/AboutCALM.html, 12 Feb, 1998)

Logistics
The science of planning, organizing and managing activities that provide goods or services. — (MDC, LogLink / LogisticsWorld, 1997)

Logistics
Logistics is the science of planning and implementing the acquisition and use of the resources necessary to sustain the operation of a system. — (Reference: ECRC University of Scranton / Defense Logistics Agency Included with permission from: HUM – The Government Computer Magazine “Integrated Logistics” December 1993, Walter Cooke, Included with permission from: HUM – The Government Computer Magazine.)

Logist
To perform logistics functions or processes. The act of planning, organizing and managing activities that provide goods or services. (The verb “to logist.” Eg. She logisted the last operation. I will logist the next operation. I am logisting the current operation. We logist the operations. The operations are well logisted.) — (MDC, LogLink / LogisticsWorld, 1997)

Logistic
Of or pertaining to logistics. — (MDC, LogLink / LogisticsWorld, 1997)

Logistical
Of or pertaining to logistics, logistics-like. — (MDC, LogLink / LogisticsWorld, 1997)

Logistics Functions
(classical) planning, procurement, transportation, supply, and maintenance. — (United States Department of Defense DOD)

Logistics Processes
(classical) requirements determination, acquisition, distribution, and conservation. — (United States Department of Defense DOD)

Business Logistics
The science of planning, design, and support of business operations of procurement, purchasing, inventory, warehousing, distribution, transportation, customer support, financial and human resources. — (MDC, LogLink / LogisticsWorld, 1997)

Cradle-to-Grave
Logistics planning, design, and support which takes in to account logistics support throughout the entire system or product life cycle. — (MDC, LogLink / LogisticsWorld, 1997)

Acquisition Logistics
Acquisition Logistics is everything involved in acquiring logistics support equipment and personnel for a new weapons system. The formal definition is “the process of systematically identifying, defining, designing, developing, producing, acquiring, delivering, installing, and upgrading logistics support capability requirements through the acquisition process for Air Force systems, subsystems, and equipment. — (Reference: Air Force Institute of Technology, Graduate School of Acquisition and Logistics.)

Integrated Logistics Support (ILS)
(1) – ILS is a management function that provides planning, funding, and functioning controls which help to assure that the system meets performance requirements, is developed at a reasonable price, and can be supported throughout its life cycle. — (Reference: Air Force Institute of Technology, Graduate School of Acquisition and Logistics.)

Integrated Logistics Support (ILS)
(2) – Encompasses the unified management of the technical logistics elements that plan and develop the support requirements for a system. This can include hardware, software, and the provisioning of training and maintenance resources. — (Reference: ECRC University of Scranton / Defense Logistics Agency Included with permission from: HUM – The Government Computer Magazine “Integrated Logistics” December 1993, Walter Cooke.)

Logistics Support Analysis (LSA)
Simply put, LSA is the iterative process of identifying support requirements for a new system, especially in the early stages of system design. The main goals of LSA are to ensure that the system will perform as intended and to influence the design for supportability and affordability. — (Reference: Air Force Institute of Technology, Graduate School of Acquisition and Logistics.)