APICS, MSU Report Shows Supply Chain Managers Facing More Strategic Business Challenges

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APICS and Michigan State University recently asked supply chain managers what burning issues were at the top of their mind. The results, published in the report “Supply Chain Issues: What’s Keeping Supply Chain Managers Awake at Night?,” show how supply chain professionals are taking on much more strategic role within their companies and tackling rising global supply chain complexities.

The report details six key common topics supply chain managers from large, medium and small businesses identified, including capacity and resource availability, competition for talent and compliance. The full list is below:

  1. Capacity/resource availability: Participants point to the challenge of managing capacity, assessing current infrastructure as they experience market growth. Things like facility capacity, data system capacity, employee skill sets and the company’s supply chain as issues.
  2. Talent: Employers say it is increasingly difficult to find professionals with the right skillset. Employee retention and properly utilizing talent are also concerns.
  3. Complexity: Companies are producing complex or new products and more of them. However, companies are figuring out how to work with suppliers of these new products to lock in the best price or the best service. Organizations are working to manage these complexities and simplify processes.
  4. Threats/challenges: Supply chain managers are concerned about a variety of supply chain risks — from natural disasters to a problem with a specific supplier — negatively impacting a company’s reputation and ability to continue business.
  5. Compliance: Compliance to the growing amount of regulation is a main concern and companies are finding it difficult to understand, track and adhere to the sheer volume of laws around the world.
  6. Cost/purchasing issues: Supply chain managers feel the pressure to be as cost effective as possible.

APICS’ Take: Supply Chain as a Strategic Role

Abe Eshkenazi, CEO of APICS, said the top issues identified in the report point to the rise of supply chain professionals playing a much more strategic role in the company. Supply chain managers previously served a very tactical and functional role in their organizations, he said, focusing on cost efficiency, for instance. However, the supply chain is becoming a “strategic imperative” for companies, and the issues identified in the report prove that. Eshkenazi compared the supply chain executive to a finance executive — someone who needs to know everything that is going on in the business.

“All aspects of the the entire business now have a supply chain component to it,” he said.

As the role of supply chain management shifts, professionals in the field need different skills than perhaps they did a decade ago. Universities with supply chain management programs, like MSU, and certification organizations like APICS are adjusting curriculums to ensure they are properly preparing students for demands of the job.

Eshkenazi said what used to be “nice to have” skills 10 years ago like understanding how to tackle sustainability initiatives, are now “need to have” skills among supply chain managers. More companies are realizing the risks involved with government regulation non-compliance, for example, and are addressing these issues in the supply chain much more than in the past. But again, this requires supply chain managers to have the right set of skills to do this.

Individuals in supply chain now need to understand risk at a very different level than they understood before,” Eshkenazi said.

Attracting Talent to Supply Chain Management

While there are new complexities to the job, it is an exciting time for the supply chain field, Eshkenazi said. The problem remains, however, of attracting people with the right set of skills to careers in supply chain management. One company said in the report “It’s a different type of talent that we’re going to need if we’re going to keep up with the pace of change.”

If a company finds the right talent, there are still challenges associated with retaining and developing those professionals, the APICS and MSU report said. One participant of the report said he is most concerned with keeping his team happy to make sure they stay at the company. This is especially a concern among millennials as they are known to switch jobs more often. The study participant was quoted in the report: “I’m always afraid that someone is going to think, ‘This just isn’t moving fast enough for me. I’m going to go somewhere else where I can be more on the bleeding edge.’”

Ongoing Research Effort

The latest report “Supply Chain Issues: What’s Keeping Supply Chain Managers Awake at Night?,” is part of a multi-year research effort led by APICS and MSU. The project, titled “Supply Chain Management: Beyond the Horizon” was initiated in 2013. Eshkenazi said the aim of the project was to see what supply chain professionals were focusing on in the future, asking them to identify what issues their supply chain organization would need to address for their companies to be successful and compete in the global environment.

“We wanted them to lift their heads up and take a broader perspective,” he said.

While originally, the project was supposed to be a two-year effort, Eshkenazi said he sees the initiative as an ongoing initiative where both organizations can continue to learn about top issues impacting supply chain professionals — information both MSU and APICS can use to improve curriculums for education and professional development.

“This was our opportunity to work with MSU and gain insight from practitioners and companies about the challenges they were facing so we can be much more responsive and proactive in addressing their needs,” Eshkenazi said.

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