A Career in Supply Chain Management
Would you like to be responsible for managing huge budgets, complex transactions and multiple supplier negotiations almost in the early part of your career? Then a career in supply chain management may be the right one for you.
In today's modern world, we are able to get almost anything we want from any part of the world; thanks to a concept called supply chain management.
This includes fruits from New Zealand, oranges from United States, apples from North India, and coconuts from coastal India. What makes all of this possible are the logistics and multiple-level distribution systems collectively called supply chain.
The supply chain channel encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Supply chain management software is the software used in executing supply chain transactions, managing supplier relationships and controlling associated business processes.
A well-known fact underlying the importance of SCM is that 1 dollar saved in supply costs is equal to 10 dollars extra sales (~ 10% profitability). As organizations grow increasingly cost competitive as well as trying to increase speed of responsiveness to customer demand, systematic approaches to supply chain management are the need of the hour. The demand for trained supply chain management professionals has been steadily growing in both domestic and global markets.
Types of Roles in SCM
There are various roles in Supply Chain Management. These can be broadly divided into: -
1) Logistics & Transportation - This involves the transportation and moving of raw materials, processed goods, from one point in the supply chain to the other. These include transportation hubs like ports, railways, storage facilities, production centers, and distribution points .Focus in on reducing the per unit transportation cost to a minimum while optimizing on speed of delivery and keeping goods safe and intact. For special items like perishables and food products, this may include a frozen or cold chain for transporting goods at lowered temperatures.
2) Procurement & Vendor Management - This involves managing multiple vendors including relationship management, quality assessment and support, and extracting maximum long term value from vendors. This seeks to avoid over reliance on one vendor while going towards building both redundancy and removing complexity of managing large number of vendors. Focus lies on sustainable good quality supplies at minimized costs from vendors.This has lately been associated with e-procurement (using Internet and technology tools for communication and linking vendors electronically ), reverse auctions (in which vendors
bid for contracts) and vendor managed inventory (in which vendors own inventory with assistance from company).
3) Inventory Management - Inventory management is an important part of supply chain management. Inventory represents the goods stored in various storage centers. They may be in the form of raw materials, work in progress, or finished goods. Inventory basically is blocked capital as it is idle and does not have any productive use during storage. Inventory is, however, necessary as a buffer for supply disruptions and transportation delays and for keeping production steady. Inventory management, thus, focuses on using techniques like ABC, Pareto for optimizing the various quantity of goods to be stored, reordering level from suppliers, and also safety and storage of the inventory at minimized cost. It also lately involves softwares like ERP and SCM for optimizing the inventory mix of the company.
4) Technology Roles in Supply Chain Management - These means being a supply chain domain expert so as to implement various softwares like ERP, SCM for companies trying to automate their tracking of the supply chain. This is a potentially lucrative line of work. There is good demand for Siebel and SAP experts. These roles have both requirement gathering as well implementation and execution of software. In addition, there is a role in which you can choose to be an optimization expert to optimize the various inventories or the locations of warehouses. These roles are typically in Information Technology and Consulting companies. In addition, use of GPS systems has helped in transportation and tracking goods.
Careers in SCM
Entry level careers in Supply Chain Management are mostly completion of Master's Degree in Management. For Information Technology related careers in Supply Chain Management, the career progress is nearly the same as consulting careers. Traditional supply chain management roles are similar to manufacturing roles in terms of speed of career progression.
1) Assistant Managers - These are entry level roles. In this, you will learn the specifics of your company's supply chain, the critical road-blocks, and the most important vendors. You would be responsible for a part of the company's supplies for a specific vendor, if you are in the vendor management team, or for a portion of transportation and logistics, if you are part of that team. In procurement role, you would be responsible for specific purchases. In addition, you will be part of special projects for implementing softwares or for reducing cost of inventory.
2) Managers - After three to five years, you can expect to be a manager with wider span of responsibility. This will involve more vendors, and higher value of purchases to be managed, or a wider transportation network.
3) AVP - This will involve managing supply chains at a regional level. This role would come after seven to ten years of experience.
4) VP (Sub-Business Head) - This would be as head of transport, or head of procurement. This role typically would come after ten to twelve years, and involves total responsibility for costs and business metrics for the whole sub unit.
5) Chief Operating Officer - The chief operating officer is a position who is responsible for all supply chain as well as production related operations. This is close to a Board Level position and can come after fifteen years of work experience with exceptional performance.
Sweet Pros of a career in Supply Chain Management - The advantages of a career in this field are good growth chances and an evergreen filed which does not have volatile demand. After a couple of years, you can choose to branch out into a domain expert for a consulting firm also.
Sour Cons of a career in Supply Chain Management - This career can be quite demanding and hectic. It is similar to marketing and sales channel management that prone to month end pressures, and needs constant negotiation skills with vendors. There can be a perception of supply chain management being a cost center as compared to marketing being a revenue center, but this perception is changing rapidly..