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Information Technology and the Supply Chain Management Professional

Not long ago, logistics and supply chain management positions tended to have a low profile on the corporate map. In today's global trade environment, these disciplines have been recognized as critical to success of nearly every business. This article offers insights on what it means to be a supply chain professional in this changing environment. It is based on interviews with supply chain organizations and experience with IBM.

by David J. Closs

A recent article in Supply Chain Management Review ("The Emerging Supply Chain Management profession", January/February 2006) which I co-authored , proposed criteria for defining a supply chain management professional (SCMP). This framework was developed based on experience within IBM, interviews with other major supply chain operating and manufacturing organizations, and discussion among the research team members. The result was a suggestion that a true SCM professional must demonstrate skills and capabilities in the following five areas:

  • Functional;
  • Technical;
  • Leadership;
  • Global management; and
  • Experience and credibility.

    In terms of 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 functional experience should include a combination of hands-on operations and managerial experience.

    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.

    A SCM professional must also 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 must also 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.

    In today's boundary-spanning supply chain environment, a SCM professional must also 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 their home country or at least extensive involvement in and responsibility for global planning and operations.

    Finally, 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 within the enterprise as well as developing external credibility. External credibility can be achieved through participation in industry conferences, receipt of awards or patents, and publication in business or professional journals.

    While the discussions within the interviews and among the research team members achieved significant agreement, there were two areas where different perspectives surfaced. The first was whether a supply chain professional needs to have spent time in an international assignment. Some of the team believed that international experience was adequate while others felt that the individual actually had to be domiciled internationally. The second area of disagreement concerned the technology experience required. To be qualified as a supply chain professional, some members of the research team felt working with supply chain technology was adequate while others felt that in-depth experience was necessary.

    I would like to focus these comments on the second issue. A review of the literature indicates that some researchers suggest that being a SCM professional does not require significant technical skills. Others regard technology or technical skills as fundamental for developing cross-functional, cross-company managerial skills. There are even some experts who placed strong emphasis on IT skills and expertise and make it an absolute requirement. I believe that the position suggesting that supply chain professionals don't require substantial IT skills is becoming less tenable. As supply chain management and IT become more tied, advancement to the senior professional ranks will increasingly require a solid foundation in both. The rationalization of this statement is threefold.

    First, supply chain IT has become a critical element in establishing strategic integration and achieving competitive advantage. Development of an integrated supply chain strategy with appropriate consideration of procurement, production, and logistics requires a comprehensive assessment of the situation to collect the appropriate data and then credible analyses of strategy alternatives. The specific decisions include sourcing materials, distribution channel design, and establishing alliances. The data includes understanding current and future customer requirements, current and potential suppliers, possible flows and processes between production and distribution facilities, and the cost elements related to alternate strategies. Such thorough and integrated analyses requires effective use of comprehensive planning tools such as supply chain design tools and advanced planning and scheduling applications. Historically, such planning and assessment would only be completed on an annual or bi-annual basis since the environment did not change that quickly. However, today's rapidly changing supply chain environment (demand, supply, cost, risk, and performance) requires more frequent, comprehensive, and accurate evaluation and analysis. More frequent and comprehensive analyses of supply chain alternatives require that supply chain managers have a deeper understanding of the decision tools, the data implications, and their limitations. Since these tools are becoming important for real-time identification and evaluation of supply chain alternatives, it is important that supply chain professionals have spent some time in analysis design, application and results evaluation. Such knowledge and experience is critical to allow for appropriate interpretation and applications of results. In order to avoid misinterpretation and erroneous conclusions, it is important that the supply chain professional has significant understanding of the planning decision tools.

    Second, supply chain IT is becoming a critical element for customer and supplier integration. Customers and major suppliers are increasingly requiring more IT interfaces and enablers to support supply chain operations. The need for real-time collaborative exchange of requirements, EDI transfers, RFID, transport consolidation, and integrated supply chain performance reporting increases the need for supply chain professionals to understand the capabilities, requirements, and nuances of these technologies. Since these capabilities are becoming critical elements of firm customer service and relationship management requirements, it is important that supply chain professionals be able to understand the subtle trade-offs associated with these technologies and the means to incorporate them into a competitive service offering. When inclusion of a technical element is critical for a customer service offering, supply chain professionals must be able to effectively evaluate the trade-offs and risks.

    Third, increasingly extended and global supply chains have driven the need for global coordination and tracking. Global coordination requires integrated planning systems that can coordinate requirements, schedules, and inventory availability in a 24 by 7 environment around the world. This capability requires the understanding of planning calendars and discipline, data integrity, and the application of information based decision logic. Another consideration for global operations is access to and coordination of shipment tracking information to facilitate requirements planning and customer service monitoring. While there are an increasing number of systems that facilitate information exchange and provide tracking information, a major issue is the ability to analyze and synthesize the detailed information to determine the exceptions that must be handled by a supply chain professional. It is important that the individual developing these decision rules and logic understand both the operating environment and the technology.

    While one might argue that not every supply chain professional needs to have a deep understanding of all or even any of these technologies, I believe that lack of depth in at least one of them will limit one's ability to further advance in the supply chain profession. While in the past, the project managers for some of these critical technologies were often from IT, project management today is typically from the business or commercial side meaning the supply chain manager. This means that in order to obtain the project management experience that is critical for the supply chain professional, one has to have the knowledge and experience to apply and manage the technology for planning or interfacing with suppliers and customers. When I advise students today, I encourage them to make sure they "get their hands dirty" in technology application as I believe that will be a key differentiator in developing and advancing the supply chain management professional for the future.

    I would like to recognize the contribution of my co-authors on the original Supply Chain Professional article. These include: John Dischinger (IBM), Eileen McCulloch (Arizona State), Cheri Speier (Michigan State), William Grenoble (Penn State), and Donna Marshall (University College, Dublin).