Introduction: Evolution of Supply Chain Roles
Supply Chain is the most interesting function in the corporation. It manages a portfolio of technology, and more importantly, a complex web of processes and relationships around the world with relevant government agencies, standards groups, industry associations, technology partners and data curators, management advisors and consultants, external service partners, customers, and the communities and environments in which we operate. Supply chain also manages cross-functional relationships and at all levels of the enterprise. With all that within its scope, it requires a lot of skills and a variety of talent, what we have been calling the Seven Talents.
As a dynamic function, we are, yet again, evolving due in good part to the introduction of AI into the supply chain. This will require us to rethink our organizational structure and roles and the required talent.
Some History
OK. We will make this quick: Up to and through the 1990s, there were distinct business functions, not organized as a working unit called Supply Chain. They were transportation, manufacturing/production, product forecasting, purchasing, and so on. In the mid-90s, the supply chain function emerged, with many organizations configuring their supply chain team in unique ways. Questions emerged such as: Do we centralize or decentralize? Who did sourcing and procurement report to? What about logistics? Did IT report to supply chain or was it a service? To a great degree, these questions still are around.
However, to operate as a real function, we needed a functionally robust system that supported the whole set of interlocking elements. Thus, the migration from standalone packages — forecasting, production planning, transportation (which was a nonexistent sector at that time) — to suites, as well as better B2B systems to manage external relationships.
A New Generation
In the late 90s, as globalization, outsourcing, and the web gained traction, better ways to communicate externally to manage the process with outsourcing partners were required. Cloud solutions — web-based portals for sales and procurement; collaborative process management (demand, procurement, design); and transportation/logistics (a great fit on the web if there ever was one) — became a big focus.
As the solution space grew, so did the need for the end-user to develop deep IT expertise (also probably acquired in response to the growing frustration with IT because of the grinding ERP projects that didn’t do much for them).1 Users demanded world-class, smarter technology to manage their increasingly complex world. They took a prominent role in technology acquisitions. They dug deep to understand what the technology was all about, since a lot was riding on their decisions.
Conversely, it also created a new breed of IT people who were excited about the value they could add to Supply Chain by finding solutions and leading complex projects with vast integration challenges. Over time they learned the intricacies and importance of supply chain functions and were willing to sometimes buck the system to get the users the solutions they needed.2 And some migrated into Supply Chain leadership roles.
The World Intrudes — Or We Intruded on the World!
Globalization brought new and huge challenges to supply chainers. Where do we locate? Who do we trade with? How do we ensure standards with local government and the environment? How do we reduce the risks associated with long supply chains, with emerging/immature commercial environments, and so on?
The emergence of the CRO (Chief Responsibility Officer) or CSO (Chief Sustainably Officer) began with their “systems” and a staff that was often plucked from within supply chain, procurement, or risk management. Or, the role was often given to supply chain as a natural extension of the work they should do. The sustainability/responsibility role drives corporate thinking and policy regarding how we are to act responsibly in these delicate and, often, impoverished communities, adding to people’s lives and making them trustworthy partners, as well as reducing risks. These issues continue to plague us in global economic and diplomatic ways, what to say of their effect on causing poor outcomes in product quality and consumer safety.
Some of the bigger challenges in all this are the intellectual property theft/counterfeiting and data security breaches brought about by a poor ethical framework and lax cyber security. So, add “cyber sleuth” or “chief investigator of corporate theft3 incidents” to the supply chain pro’s resume!
Margin Mover!
One of our “causes” and first principles when we started ChainLink was “speak the language of the CEO.” Over the years, we had an evolving theme: The Changing Role of the Supply Chain Manager. This topic was presented at universities and user conferences as well as executive workshops where we discussed the role of supply chain and helped catalyze changes in organizational structure. One of the areas really neglected (except by those supply chainers who rose to the top) has been the ability to communicate, especially to the executives (the financial, brand, and product leaders) in the enterprise. In essence, CEOs and supply chain professionals speak different languages, and the latter must learn to speak the language of the former.
Supply chain can — and does — contribute to better corporate growth and profitability. With the smart, connected enterprise and, therefore, the ability to expand services (as well as the ecommerce/last mile services), supply chain has become a designer of services and has expanded the corporate brand. However, to leverage that influence, supply chain professionals must exude that ability in their communication.
Where Are We Now?
In the last decade, universities have really stepped up their advocacy for and with the number of graduates in supply chain — both undergraduate and advanced degrees. Now we even have a Master’s in Supply Chain Analytics.4 This is a STEM focused degree! (We will come back to that issue shortly.) These folks have their math, IT, and business skills to get started and then grow into important roles, though it does take some time to adapt from the world of academics to the “real world.”
New Tasks/Needed Skills: The Supply Chain Scientist
A Supply Chain Scientist? Why not a Supply Chain Data Scientist. Yes. Data scientists possess a skill in that is in short supply. But so do advanced demand management professionals who can think holistically about the world and the enormous economic and social transformation our planet is going through.5 We need analytical types who can view the changing geospatial landscape with its data and latest algorithmic methods and coax out new knowledge to improve performance and synthesize the new economic and social trends. They also need to lead and work cross-organizationally.
Talking to supply chain AI providers and listening to their observations about the “new supply chain organization,” their general observation was that data scientists are more interested in the data and coaxing out new analyses than in their day-to-day application. Thus, two roles may be needed, one reflecting a more traditional supply chain team philosophy, and one on an innovation curve.
My own view is that a new role is emerging or at least is an extension of existing roles that are already functioning within the planning community. I take hope from the many blog posts and discussions with IT, data scientists, and end-users on their quest to learn and be where the action is.6
So, to answer our original question, supply chain professionals should be called Supply Chain Scientists. They are like engineers to whom we attribute a scientific attitude and skill. Engineers use some exacting tools to get precision, but isn’t designing code or a physical product also an outcome of the creative human side of each engineer? So why not a Supply Chain Scientist? Don’t we use precision mathematics to try to coax out precision in the work we do? In our case, some of our raw materials may be a bit fuzzy — the mind and mood of the consumer — but the math we apply to our raw material is every bit as technically advanced as the engineer’s.
Some of the elements of this new role:
Data Expert — with all the structured and unstructured data, we need expertise in weather, social, trade, geospatial/sensor data; where to get the best data sources; how to use them and what impact they might have on demand. In addition, ensuring that the internal tools and infrastructure exist to curate, refine, and “accuratize” the data. Considering how the data is the one fuzzy variable in our ability to achieve precision, shouldn’t there be a huge investment of time and tools to “unfuzz” it? After all, it’s all about the data!
- Algorithm development/application expertise — We are already spending time on this issue when we set up our planning systems, and we often rely on our consultants from the tech companies to advise us on the right approach. However, over time, those approaches may not be a good fit and we do need to change them or add to them. Now we need to understand the field of AI and its application to supply chain, since we will make the decision to acquire, develop, and use it. But think of this: If Machine Learning is learning behind the scenes, shouldn’t we be learning with it? If we expect to be in control, we must!
- Curator of Knowledge — We have relied on history and assessing the accuracy of our previous analytics. With the addition of machine learning and the subtleties of why things are happening and who is doing them, these important new insights should be part of the knowledge we apply. The “when this happens, then that happens” data, which may not be easy to digitize, is essential to include to move us forward in our ability to manage in this increasingly volatile world.
Evolving Supply Chain Development Team
Conclusion
Supply-chain pros today, no matter their role, are living the life of these commonly used, apt phrases — in the mix, in the rough and tumble, in the high-stakes games. And many of them have reached the top echelons of the enterprise. The outcomes of their decisions really affect so much of the health and brand of the company that when they do their job, it is fitting that they are heard at the top. Therefore, the supply chain team’s skills need to be up to the challenge.
The work and the roles need to be appropriate to the task at hand. With so much of our focus today on the analytical nature of many of the roles in supply chain, adding the Supply Chain Scientist to the team seems obvious.
With the continued candidate shortage in supply chain, organizations need to offer the right mix of job content and other rewards to retain and hire the best, those who want to continually learn — those who are willing to get their hands dirty.
References:
The Rise and Fall of the Demand Planner
It’s All About the Data
The Supply Chain Planning Department of the Future
Supply Chain Networks Revealed: Executive Summary
Digital Displacement?
The Talent Gap
____________________________________________________________
1 To note here: End-users saw the service model of what, today, we call cloud platforms of supply chain — a real benefit. They could bypass the long queue of IT and sign up with the external service provider. But along with this freedom came a real responsibility to manage these relationships and select the technology themselves. Again, this developed their IT skills. — Return to article text above
2 ERP was often seen as the “one-vendor approach” for the enterprise. — Return to article text above
3 The ChainLink team and many of you, no doubt have filled these roles over the decades. — Return to article text above
4 Note: The Master of Supply Chain Analytics degree at Rutgers is a STEM designated degree and U of Tennessee has an MS in Supply Chain Management. — Return to article text above
5 As examples, note recent chapter 11 filing by Dean Foods, citing decline due to society consuming less milk; or BIC with a slower market in the US cigarette lighter market as less people smoke; or the pen and pencil market with the once ubiquitous Number Two Pencil. — Return to article text above
6 For a good example, read: I had no idea how to write code two years ago. Now I’m an AI engineer. — Return to article text above
To view other articles from this issue of the brief, click here.