If someone had asked me just over a year ago which industries I would consider working in, the supply chain industry wouldn’t have even made it to the bottom of the list. Admittedly, before I began researching and writing for the All Things Supply Chain blog, the topic rarely crossed my mind. Now, I find myself thinking about the supply chain of almost everything, from the honey that goes into my breakfast cereal to the lithium used to make my phone battery. The complexity and sheer number of processes behind the supply chain of a single component for a product can be mind-boggling.
Nowadays, supply chain and logistics are considered strategic business enablers, and more and more companies are engineering their supply chains to develop their competitive advantages. Over the last decade or so, the supply chain has become a central business focus and significant differentiator. This has been fueled by ever-increasing consumer expectations and rising pressures to deliver speedily, conveniently and at a low price to compete with corporate giants such as Amazon. We can only expect this trend to continue as technologies and the industry advance. It is therefore important that companies stay updated on the latest solutions and realize the full potential of their supply chains to increase business value. It is also of critical importance that people are informed of the job opportunities that the supply chain and logistics industry has to offer, and, furthermore, that educational institutions help to fill the growing talent gap.
According to research from the Supply Chain Academic Initiative, the demand for supply chain professionals exceeds supply by a ratio of 6 to 1, which is expected to increase further to up to 9 to 1. But why is there such a large talent gap? As pointed out by DHL, part of the problem is the negative career image that looms over the supply chain and logistics industry, stemming from a lack of understanding, the perception that it doesn’t offer an attractive career path, and insufficient educational programs. Many people wouldn’t be able to tell you the definition of supply chain – I couldn’t either, not too long ago. Another issue is that skill requirements are rapidly expanding and changing. As the supply chain evolves, so do the skill sets required for job roles. The number of qualified workers in the potential workforce is therefore further restricted.
On the bright side, this gap means that there are countless jobs available to those looking for them. The supply chain is currently a $1.3 trillion industry- and growing. There is a common misconception that the profession mainly consists of manufacturing roles. I was surprised to discover that roughly 80% of supply chain jobs are related to services rather than the fabrication of a physical product. Such jobs include operational managers, computer programmers and truck drivers, for example. Research has found that the average salary for these jobs is typically higher than for traditional service jobs, a.k.a. Main Street service jobs. Salaries are competitive and comparatively high to other industries. A 2016 annual salary survey by the Peerless Research group found that supply chain professionals earned an average of $105,575 per year.
However, many are still skeptical about the future of work in supply chain and logistics. A number of jobs already face the threat of automation, particularly in areas such as manufacturing. But that doesn’t necessarily mean that human workers will become obsolete. The World Economic Forum predicts that robots will displace 75 million jobs by 2022, while creating 133 million new ones. The idea is that the nature of human work will evolve, as AI manages the more mundane tasks and humans have more freedom to upskill, reskill and enhance their job roles. As automation opens up opportunities for more cost savings, companies should be more financially able to employ more high-skilled workers and to retrain existing employees. The Harvard Business Review identified 3 categories of new roles that will emerge as a result of AI: the AI trainers, algorithm explainers, and intelligent system sustainers.
Business performance and supply chain potential
Traditionally, businesses were drawn towards cost-based approaches when managing their supply chains. But managing supply chains with the sole focus of saving costs is not feasible today, and a cost-based supply chain mindset is not sustainable or healthy for business. Businesses that are stuck in this mindset may prevent their own growth and miss out on the greater strategic potential that supply chains offer. Effective supply chain management (SCM) is founded on the principle of creating value to drive growth. Internal value creation is essential to attain high-quality services for customers, benefiting them through either reduced costs or improved performance. Value creation can be achieved with supply chain optimization, such as through the implementation of innovative technologies and practices, including intelligent SCM systems, which enable a faster, more dynamic and better-informed supply chain. There is always room for improvement in the supply chain, big or small, and businesses can identify potential areas for improvement using flow maps, big data and quantitative factors, and SWOT analysis.
There is often a close relationship between supply chain and business performance, as demonstrated by a Deloitte survey in 2014. The survey found that 79% of supply chain leaders (12% of the respondents that had high performance scores based on inventory turnover and full on-time deliveries) achieved above average revenue growth in their respective industries. Compared to just 8% for those with less capable supply chains – supply chain followers.
Opening the oyster
When I was reflecting on my first year of writing for the ATSC blog, the phrase “the world is your oyster” came to mind. It originates from Shakespeare’s play ‘The Merry Wives of Windsor’, and although its original meaning is disputed, it is often used as an idiom today to mean that the opportunities of the world are yours for the taking, and that you are in the position to go wherever you want and do what you want to in life. The supply chain is an oyster waiting to be opened. There is a profusion of career opportunities in the industry, for people with all kinds of skills and backgrounds. Supply chains can be aligned to support business strategies, taking businesses where they want to go and helping them to achieve their long-term goals. Once businesses have identified weak points in the supply chain, they can focus their efforts on these areas and optimize, opening up potential to deliver more value.
A few final words
I am sad to say that this will be my last blog as an official writer for the ATSC blog, though I am sure you will hear from me again. I would like to thank both David Weaver and Kai Keppner for giving me this opportunity, as without it, I would never have learnt so much about the amazing supply chain industry.
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