Dave Blanchard, Editorial Director/Associate Publisher
Fifty is a nice, round number, and while 50 years may be just a blink in God's eye, it's still a significant period of time—significant enough, at least, that the Council of Supply Chain Management Professionals (CSCMP) was in a positively commemorative mood at its annual conference last month in Denver. Yes, the CSCMP has been around for 50 years, beginning life in 1963 as the National Council of Physical Distribution Management; the trade association became the Council of Logistics Management in 1985, and then settled on its current identity as the CSCMP in 2004. So congratulations to CSCMP, with whom Material Handling & Logistics (which has had a few name changes of its own over the years) has enjoyed a long and fruitful relationship.
In a fittingly reflective spirit, one of the key sessions at CSCMP 2013 looked at "Game-Changing Trends in Supply Chain." Ted Stank and John Bell of the University of Tennessee, presented an update on a study originally done at the turn of the 21st century, revealing how much had changed in supply chain thinking since 2000. "Many of the supply chain trends that were prevalent in 2000 are still with us," Stank notes, "but the responses to them are dramatically more sophisticated."
Based on a survey of 163 supply chain professionals from large and mid-sized companies (mostly manufacturers and retailers), the 2013 UT study focuses on how technology, metrics and collaboration have helped reshape how the world views supply chain management. Wall Street, for instance, recognizes now that "supply chain excellence is the key to creating shareholder value," Bell points out. And why not? As Bell explains, the supply chain "controls all of the inventory; manages 60-70% of the cost' and provides the foundation to generate revenue by providing outstanding availability."
A notable difference in supply chain thinking since 2000 has occurred as companies shift from a functional focus to a cross-functional process integration. As Bell explains, the number one wish-list item for supply chain professionals these days is to work for an organization where the functional silo walls have come down, particularly the wall between purchasing and logistics. That's no surprise, since the entire premise of supply chain management is centered on coordinating the plan, source, make, deliver, return and enable processes, both inside and outside a company's four walls. So it's no wonder that supply chain people would be frustrated by activities that run counter to achieving that level of integration.
One trend that has not so much changed as it's intensified over the years is training supply chain talent. "Hiring and training the best talent is the number one requirement for transforming a supply chain," Stank emphasizes. Traditional training, he explains, has evolved into knowledge-based learning, which "encompasses holistic cross-functional thinking and orients employees in a way to improve overall organizational performance."
Pretty heady stuff, and Stank acknowledges that finding these types of employees requires a game-changing shift in hiring strategies. It's important, he says, that companies focus on attracting supply chain talent that is competent in the areas of global orientation, leadership skills, technical savvy and superior business skills. The business skills are particularly important, Stank points out, since "a deeper understanding of total costs are needed to achieve the desired level of efficiency."
Finally, Bell summarized some emerging supply chain trends that were barely on the radar, if considered at all, back in 2000:
• the effect of regulations on driver shortages;
• transportation congestion, aging infrastructure and the effects of urbanization;
• climate-induced supply chain disruptions,
• demand increases,
• resource scarcity,
• delivery in new geographic locations.
"Tightening capacity and increasing transportation rates," Bell says, "underscore the increased importance of carrier partnerships and driver productivity." Negative implications of these capacity issues, which have become all too common in recent years, could lead to such dire consequences as the potential inability of some shippers to get their freight moved, increased levels of inventory and decreased service levels.
Ultimately, it all comes down to talent, and it's as true now as it was 50 years ago. Having smart, capable people in key positions of responsibility managing your supply chain is the most impactful game-changing trend of them all.