Measuring a Supply Chain Manager’s Worth: 2014 Supply Chain Salary Survey

“The U.S. is poised to recover the manufacturing base that has left this country if we had a government truly interested in job and wealth growth. Our debt is ruining our future.”—purchasing director with an apparel manufacturer with 26+ years of experience, living in the South Central region and earning $125,000

“I am in my 21st year of managing, and I have seen major changes in the industry, especially in the automation portion of the business. I have received a lot of skilled training that has proved very valuable to me, but I have not received the proper salary to complement my knowledge base.”—distribution/warehouse manager with a consumer goods manufacturer with 26+ years of experience, living in the Middle Atlantic region and earning $65,000

“Salary is the driving force behind getting and keeping good employees.”—corporate executive in the automotive industry with 21-25 years of experience, living in the South Central region and earning $75,000

“Logisticians are problem solvers and should always be compensated as such.”—transportation manager with an energy/utilities company with 21-25 years of experience, living in the South Central region and earning $60,000

As the supply chain goes, so goes the country, to coin a phrase, and in this era of stagnant-at-best economic growth, there’s the very real sense that it’s mainly thanks to the skills of the men and women piloting the supply chain that the United States is as resilient as it is. Indeed, during the depths of the recent Great Recession, when most companies were retrenching into survival mode, a number of prescient companies proactively sought out and hired top supply chain talent. Having a foundation of excellence built on the best talent is, according to Ted Stank with the University of Tennessee, “the number one requirement for transforming a supply chain.”

Top supply chain talent, Stank explains, have four critical competencies: global orientation, leadership skills, technical savvy and superior business skills. To those four characteristics, we would add a fifth: resiliency. As you’ll see in the following pages, as well as in our exclusive gallery of salary tables as well as our collection of open-ended comments about the supply chain's biggest challenges, the people who manage the supply chains throughout U.S. industry have a deep knowledge base of operational processes and capabilities, gathered over years—and in many cases, decades—of hands-on experience. We collected salary, business and demographic data from the subscriber databases of both Material Handling & Logistics and sister publication IndustryWeek, which between them focus on corporate and senior managers at U.S. manufacturing, retail, wholesale, distribution and third-party logistics companies. The 2014 Supply Chain Salary Survey represents, then, a focused study on the careers of the people who matter most when it comes to keeping the nation’s supply chain running.

The Face of the Supply Chain

Based on the results of the survey, we can describe what a typical supply chain manager looks like (not that there’s anything “typical” about them). This composite supply chain professional is a white male in his 50s, living in the Midwest, with at least 26 years of experience in the industry, and working for a metals producing manufacturer. He is in a corporate/executive management role, has a Bachelor’s degree, has been with his current company for 11-15 years, and earns $106,152.

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Having described the typical supply chain manager, let’s now focus on what you could do to become one of the best-paid supply chain managers. First of all, you could move. While the greatest concentration of supply chain talent is found in the North Central region (aka the Midwest), where the average salary is $102,951, other areas of the country pay considerably more—but as you would expect, the cost of living is considerably higher there, as well. Supply chain managers in New England tend to earn the highest salaries ($130,410), followed by the Middle Atlantic states (New Jersey, New York and Pennsylvania), where the average salary is $125,847. The lowest average salaries are found in the South Central ($95,324), but then again, they have many more days of sunshine than their northern counterparts, so maybe that should count as remuneration.

Another thing you could do to earn a higher salary is change industries. The majority of respondents work for manufacturers of metal products ($123,816) or industrial machinery ($101,775), but other industry verticals pay more. Electronics/high-tech companies, for instance, lead the way with an average salary of $170,214; however, as they represent only 2% of the total, jobs in this vertical would seem to be harder to find. Managers at chemical ($144,514) and medical device ($136,286) manufacturers also had some of the highest salaries; if all else fails, consulting seems to pay well, too ($155,500).

A third option is to go back to school to get a degree. The more education you have, the higher salary you’ll get, based on survey results. A third of all respondents say they have a four-year degree ($103,926), but those with at least some graduate study ($120,383) or a Master’s degree or higher ($148,128) are paid more commensurate with their education.

The Diversity Gap

Mary Barra made headlines recently when she was named CEO of General Motors, as she became the first female to run a major automobile manufacturer. Shortly afterwards, however, she made headlines again when it was discovered that she was getting paid less than half of what her predecessor, Dan Akerson, earned, despite her having much more experience in the automotive industry than Akerson had. Even when women rise to the highest heights in management, it seems that they do so at a discount.

According to our 2014 Supply Chain Salary Survey, the disparity is quite eye-opening: Not only do men outnumber women by a staggering figure (93% men vs 7%), but they outearn them by a sizable amount as well: $107,811 vs. $81,595.

“Taking steps to address gender imbalance in supply chain requires action both at the top and bottom of an organization,” says Kevin O’Marah, chief content officer with SCM World, a global community of senior supply chain professionals. He quotes Beth Ford, chief supply chain officer at Land O’Lakes, who notes that “men are often promoted on potential, while women are promoted on results.” Top-down sponsorship, O’Marah suggests, will be needed to close the gender gap.

Another area where supply chain management reflects unfortunate trends in senior management nationwide is race. Almost nine out of 10 (89%) of all managers in our survey are white. Although the highest average salary figure is for Asians ($156,000), a mere 1% of respondents were Asian, so that’s something of an outlier. White managers averaged $107,303, considerably more than Hispanic ($77,548) or black ($70,451) managers. The stereotype that top supply chain managers tend to be middle-aged white males isn’t really a stereotype at all; it seems to be accurate.

Smooth Operators

We asked respondents what mattered most to them about their job, and the top answer, interestingly enough, was not salary (22% of responses)—it was job security (24%). Maybe that’s a reflection on the state of the economy, but in any event, the third-most frequent answer was career advancement opportunities (18%).

Perhaps one of the reasons salary was not the main concern of supply chain managers is that 58% received a raise in 2013. Although most of those salary bumps were in the range of cost-of-living increases, 14% received a raise of more than 5%; conversely, only 5% of respondents saw their salary level drop in 2013. Thirty-seven percent say their salaries did not change at all last year, and 36% don’t anticipate receiving a raise this year, either.

We also asked respondents to identify the biggest challenge facing their industry today, and any politicians reading this article might want to pay particularly close attention: the government itself appears to be the problem, whether it’s reflected in the economy, in regulations (hours of service, OSHA, EPA, etc.), in unclear policies, or in failure to stay competitive with foreign markets. Another frequently heard lament is the lack of a skilled workforce, raising concerns about where the next generation of supply chain talent will come from.

And yet, despite the challenges and the uncertainties inherent to the job, supply chain managers are, as we said at the outset, very resilient. Seventy-eight percent say they are either satisfied or very satisfied with their current jobs, and 82% say they are satisfied or very satisfied with their choice of a career path. While there is certainly a lot of pent-up frustration among supply chain managers (as there would be in any profession), the positives outweigh the negatives by a sizable margin.

One respondent neatly summarized the satisfaction of a job well done in this short description of a typical day in the supply chain: “Having the right people in the right places to be effective in proper control procedures, receiving and departure, and facilitating a smooth and precise operation.” Keeping the nation’s supply chain running smoothly and precisely—that’s what it’s all about.

The Method to Our Madness

The 2014 Supply Chain Salary Survey was conducted online via e-mailed invitations to a select group of subscribers to Material Handling & Logistics and IndustryWeek. The survey took place in December 2013-January 2014, and with total responses of over 1,110, we culled roughly 400 supply chain and related titles. Respondents were not compensated, but were offered the chance to win an American Express gift card. All responses were anonymous.

The Rest of the Story

Our exclusive slideshow Follow the Money offers a look at the entire collection of salary figures and workforce charts collected from the 2014 Supply Chain Salary Survey, including a gallery of tables detailing responses to many questions not featured in the print magazine. Our special feature The Supply Chain’s Biggest Challenges includes hundreds of open-ended comments from respondents about the biggest challenges confronting supply chain managers, as well as their observations about the industry and their role within it.