Frequently Asked Questions

This list of frequently asked questions (FAQs) was developed to briefly address any questions you may still have about a career in SCM. If you do not see your question below, contact us at [email protected].

What is supply chain management?

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.

Boundaries and Relationships: Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.
Source: Council of Supply Chain Management Professionals

What is a supply chain?

The supply chain — a term now commonly used internationally — encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer. Supply chain management includes managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer.

Due to its wide scope, supply chain management must address complex interdependencies; in effect creating an "extended enterprise" that reaches far beyond the factory door. Today, material and service suppliers, channel supply partners (wholesalers / distributors, retailers), and customers themselves, as well as supply chain management consultants, software product suppliers and system developers, are all key players in supply-chain management.
Source: Supply Chain Council

What is logistics?

Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.

Boundaries and Relationships: Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third-party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution--strategic, operational and tactical. Logistics management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance, and information technology.
Source: Council of Supply Chain Management Professionals

Why is supply chain management important?

Two main reasons: money and opportunity. In the US about 10 percent of gross domestic product, or almost $1 trillion, is spent on supply chain activities. Advances in information technology (IT) and the expanding IT infrastructure are introducing new possibilities to improve service and efficiencies, and given the amount of money at stake, the opportunities are high. Some people view the IT tools that underlie supply chain management as the backbone of e-commerce.
Source: Syracuse University , Whitman School of Management

In years past, manufacturers were the drivers of the supply chain — managing the pace at which products were manufactured and distributed. Today, customers are calling the shots, and manufacturers are scrambling to meet customer demands for options / styles / features, quick order fulfillment, and fast delivery.

Manufacturing quality — a long-time competitive differentiator — is approaching parity across the board, so meeting customers' specific demands for product delivery has emerged as the next critical opportunity for competitive advantage.

Companies that learn how to improve management of their supply chain will become the new success stories in the global marketplace. Benchmarking studies show significant cost differences between organizations that exhibit best-in-class performance and those with average performance.
Source: Supply Chain Council

What challenges do companies face as they try to improve SCM?

Improving a process as complex as the supply chain can be daunting, as companies are challenged with finding ways to meet ever-rising customer expectations at a manageable cost. To do so, businesses must identify which parts of their supply chain process are not competitive, understand which customer needs are not being met, establish improvement goals, and rapidly implement necessary improvements.

Industry has long lacked a standard way to measure supply chain performance. Because of this, manufacturers and service providers were unable to use a common assessment tool — benchmarking — in the effort to improve their performance. Moreover, the lack of a common means to describe supply chain processes rendered software selection difficult and usually expensive.

Instead of finding the right tools for improving specific competitive gaps, businesses often made huge investments in software that failed to address their particular problem. All too often, available software products forced companies (often unwittingly) to revamp their supply chain processes to suit some default criteria.
Source: Supply Chain Council

What kinds of jobs (and salaries) are available for SCM graduates?

SCM majors are prepared for entry-level positions in purchasing or logistics such as a buyer, purchasing analyst, inventory control, or traffic analyst with a career track to the vice president of procurement, operations, or logistics. Firms from around the country and in all sectors of the economy, public and private, manufacturing, service, health care, retail, etc. recruit SCM graduates. Starting salaries range from $23,500 - $58,500, with and average of about $39,500.

Listed below are brief descriptions of a few of the typical entry-level positions:

• Planner or Analyst - Uses analytical and quantitative methods to understand, predict, and enhance supply chain processes. Responsible for assembling data, analyzing performance, identifying problems, and developing recommendations that support the management of a supply chain.
• Buyer - Works with internal customers (marketing, production, operations, etc.) and external suppliers to efficiently and effectively manage the purchasing process for the goods and services needed by the company. Responsible for identifying sources of supply, evaluating and selecting suppliers, negotiating contracts, and managing relationships with suppliers.
• Inventory Specialist - Develops and implements plans to optimize inventory cost and customer service goals. Responsible for inventory quality and accuracy, coordinates physical inventory process and cycle counts, monitors inventory flow through the system, and works on stock location and order picking strategies to optimize work flow, space utilization, and labor productivity in distribution facilities.
• Materials Planner, Materials Analyst - Manages raw materials and/or components needed for manufacturing. Responsible for inbound inventory levels. Coordinates with purchasing, manufacturing and supplier to ensure reliable, cost-efficient delivery of the raw materials to the production line. May be responsible for receiving, warehousing, scheduling, and inbound transportation.
• Transportation Coordinator, Traffic Analyst - Evaluates, selects, and manages transportation carriers for inbound goods. Manages relationships with carriers and internal customers to ensure the timely delivery of goods.
• Production Coordinator, Scheduler, Operations Planner/ Analyst - Uses scheduling and forecasting abilities, knowledge of statistical process control, and interpersonal skills. Responsible for coordinating daily production schedules and forecasting future production needs.

Source: Arizona State University , W.P. Carey School of Business

Is there a typical career path in SCM?

There is no standard career path in SCM. Your journey will be as unique as you want it to be and will likely involve a great deal of variety. You're sure to gain experience in a number of different positions and departments within the organization. You may also move between organizations, industries, and types of employers (logistics services providers, manufacturers, consulting firms, and retailers) during your career. The keys to a success career include:

• Building transferable skills that will serve you well in multiple positions
• Learning to be a strong decision maker and accountable for your actions
• Being a team player and a good colleague (i.e., people want to work for and with you)
• Having some fun in the process (you'll burn out quickly if you don't enjoy what you do)

What skills do I need to build in preparation for a supply chain career?

A 2007 survey of supply chain employers was conducted by Auburn University and Central Michigan University. The study results suggest cognitive abilities (e.g., ability to prioritize, plan, organize, and learn quickly), communication skills, and other interpersonal issues were among the most important factors considered by employers when hiring supply chain graduates.

Hiring Criteria

A 7 point scale: 1 = Low Importance to 7 = High Importance

A review of the supply chain research literature reveals that analytical skills, process orientation, computer skills, leadership abilities, and strategic thinking skills are important capabilities for supply chain managers. You should leverage every opportunity to enhance these skills.

Where can I study SCM?

SCM degree programs and majors are limited to a small, but growing number of universities. View U.S. News & World Report list of college rankings < http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/business-supply-chain-management-logistics > for supply chain management and logistics or read, Top Supply Chain Management Degrees by Camcode®.

What types of classes are offered for SCM?

Classes vary from university to university. The following course descriptions from Arizona State University 's program are good examples of topics that are discussed in supply chain classes:

• Logistics and Transportation – Analysis of the activities and decisions necessary to plan, implement and control private and public physical distribution and transportation channel systems. Emphasis on physical, human, informational and organizational system components.
• Supply Chain Models – This course investigates the role of information management and decision support methods in the planning and management of supply chains and related processes. The course addresses techniques and methods used in facility location; forecasting; inventory control; routing and scheduling; purchasing; warehousing and other activities.
• Supply Chain Management – This course emphasizes the adoption of a supply chain orientation toward business and the need for more effective inter-firm relationships and operational processes. Topics include the structure and dynamics of supply chains; finance; operations; the global supply chain environment; forecasting/demand management; process analysis; inventory; performance measurement; inter-functional and inter-organizational relationships; and the role of information systems and the internet.
• Logistics and Supply Chain Strategy – This course requires the students to integrate concepts learned throughout their academic experience into a combined analysis of current events and the completion of a corporate project. Analysis of comprehensive cases incorporating strategic and tactical decisions throughout the entire supply chain management process is required. The students' analyses culminate in presentations to their corporate clients.
• International Logistics and Global Supply Chain Management – Principles of logistics activities in international business with special emphasis on transportation, global sourcing, customs issues, import-export opportunities, customs documentation, the role of government in international transactions, customer service, and global supply chain management. Special emphasis is placed on current events and their effect on the marketing and logistics activities of organizations.
  

Source: Arizona State University , W.P. Carey School of Business

Is an internship important?

The short answer is yes, an internship is very important. An internship is good for you and your future employers. One of the best ways to confirm that you have selected an appropriate career path is to work for a company that will provide you hands-on experience in logistics, transportation, and/or supply chain management. In addition, one of the best ways to confirm to your future employer, which could be the company that provided you with the internship, is the experience gained through your internship. One of the most frequently asked questions by recruiters is, “Did you have an internship while in college? If so, tell me about it.”