Академический Документы
Профессиональный Документы
Культура Документы
Supply chain managers: Who needs them? The complexity of the supply chain plays a
This has been the central question of our role in determining the scope of the supply
research study. Many companies have chain function and the level of the supply
introduced the supply chain function over the chain manager in the organization. Another
past couple of years. We encounter several of determining factor is the strategic position
these supply chain managers in our day-to- that is given to the supply chain. A supply
day activities, and have always been intrigued chain that is key to competitive advantage
by the differences in their job content, in the asks for a senior supply chain manager with
range of responsibilities they have, and in the an overall responsibility, who supervises
position they occupy in the hierarchy. Clearly, sourcing, manufacturing, distribution and
it looks like not all companies need a supply planning. However, in truly global supply
chain manager who is in charge of all aspects chains, the complexity of the chain makes
of logistics. Some do, but some dont. It has it too difficult to combine all functions into
been the objective of our research to get a a single responsibility. Here, we tend to
good understanding of these differences, find supply chain managers that are more
and to identify what drives the need for a functionally oriented.
full scope supply chain manager.
Supply chain management is an ever
Over eight hundred supply chain managers more demanding job. Functional expertise
in a variety of industries in Western Europe remains a key requirement: logistic
have participated in this survey-based expertise, knowledge of planning systems,
research project. We have investigated their technical skills are crucial. But even more
position in the organization, their educational important are the soft skills: leadership,
background, their prior experience, the scope communication, people management
of their function. are all rated very high. Knowledge of the
business context environmental issues,
We found the inspiration for this research
international business, law and regulations
project in a study that was carried out a few
are expected to become more important in
decades ago. Materials Managers: Who
the future. The supply chain manager for the
needs them? was the research question at
future needs a well balanced competence
that time. The conclusion was that different
profile, with a good blend of soft skills
companies need different structures, ranging
and in-depth functional expertise, and
from fully integrated to functionally oriented
with a clear understanding of the business
specialist structures. (Miller et al., 1979 and
context. Developing this set of skills and
1981).
competencies takes time and requires a
Todays supply chain managers differ from willingness to invest in education and training.
the materials managers of the past in that
they ideally are managing the extended
supply chain, which includes the customers
and suppliers. The process they manage
reaches far beyond the process managed by
the materials managers in the past. However,
the overall conclusion hasnt changed. There
is no one size fits all approach to the supply
chain organization. Different companies, or
rather different industries, need a different
approach to supply chain management.
History is repeating itself
introduction+ 5
It is only about 10 years ago that people competitors spread all over the globe, the
started to talk about Supply Chain supply chain manager is often managing
Management as a management discipline. complex logistic networks across borders
Even today, the definition of supply chain and cultures.
management is still a subject of discussion.
A lot of attention has been devoted to
It has evolved substantially over the past
concepts, techniques and computer-based
years. Previously, logistics was a functional
systems that help organisations to better
domain in the company, and the logistics
integrate their supply chain activities.
manager was responsible for everything
However, much less attention has been
concerning storage, transportation, inventory
given to the more soft side of the supply
management; sometimes the logistics
chain system: its organisational structure.
function also included purchasing and
By this we mean the way the various supply
customer services. In the early nineties,
chain tasks are being allocated to individuals
the term integrated logistics was coined,
and organisational units and the way the
indicating that it was not sufficient to optimize
actions and decisions of these individuals
transportation, purchasing and logistics
or units are integrated. Little is found in the
individually; rather they should be optimized
literature on how to organize for supply chain
together to obtain an integrated solution.
management. Nevertheless, practitioners
This was the basis for what supply chain
have many unanswered questions with
management stands for today.
respect to the supply chain organization.
By thinking in terms of processes, supply Should manufacturing report to the supply
chain management closes the gap between chain manager? Should customer service
the different functional domains. What has report to the supply chain manager? Where
changed is that the scope is not limited should the supply chain manager be on the
anymore to the traditional logistics activities. organization chart? To whom should he or
It often includes manufacturing and requires she report? In our research study, we tried to
integration with other functions such as answer some of these questions.
product development, finance, marketing
We found the inspiration for this research
and sales. Equally important is the fact that
project in a study that was carried out a few
the scope extends beyond the corporate
decades ago. A team composed of Roland
boundaries of an organisation to include
Van Dierdonck, Jeffrey Miller and Peter
different legally independent organisational
Gilmour, studied the role of the materials
units for which some of the classical
manager and his position in the organization
integration mechanisms are less effective or
in manufacturing companies. Materials
even irrelevant.
management was at that time a new function,
Few managers will deny the value of supply bridging purchasing, manufacturing and
chain management. In this globalised world, distribution. Materials Managers: Who
effective supply chain management is one needs them? was the research question.
of the best ways to secure competitive The conclusion, which was published in a set
advantage. It often allows making dramatic of articles about thirty years ago, was that
improvements in cost, productivity and different companies need different structures,
customer service. Many companies have ranging from fully integrated structures, to
found that, especially in very competitive functionally oriented specialist structures.
product markets, improving supply chain (Miller et al., 1979 and 1981)
management offers the best potential for
increasing profitability. It is also a complex
function. With suppliers, customers and
6 Introduction
Why this research (cont)
The purpose of this study, almost thirty years Secondly, we wanted to understand how the
later, is two-fold. Our first goal has been to supply chain department is organized: How
describe the typical supply chain manager in are tasks allocated and supervised? Which
terms of education, skill set, profile and career mechanisms are used to integrate these
track. This may help us to understand the tasks? Do we rely on hierarchical structures or
key competencies and skills the supply chain on trust? Our study clearly shows that supply
professional needs today and in the future. chain management has different meanings in
different companies. In the final section of the
report we will elaborate on the reasons for the
differences in supply chain organizations.
The Goodman Chair 7
in Logistics Management+
This research project is set up within the Under the Chair agreement, Vlerick Leuven
Goodman Chair in Logistics Management. Gent Management School further develops
the logistics management knowledge base.
Goodman is an integrated global property
The Goodman Chair enables a Vlerick
group that owns, manages and develops
research team to undertake research in the
industrial property and business space across
logistics management sector and to develop
Europe, Australia and Asia. The Group invests
a knowledge base which ultimately grows into
in business parks and logistics property such
something that the industry can take forward.
as warehouses and distribution centres. It
offers purpose-built property solutions to The Chair allows Goodman to get
meet the needs of its customers as their independent and academic insight into the
requirements change locally and globally. relatively young discipline of supply chain
management and to match it with its day to
Goodman encourages innovative thinking in
day practice in the sector. The partnership
the industry and strongly believes in bringing
creates a forum to interact with the leaders in
additional perspectives to its knowledge
the industry and to better analyze their needs
base. For this reason and because it wants to
in order to take their specific requirements
share its success and knowledge with all its
into account when developing integrated
stakeholders, Goodman has been funding the
warehouse solutions.
Goodman Chair in Logistics Management
since 2004.
Figure 1 Figure 2
Respondents in phase one Respondents in phase two
Figure 4 Figure 5
Level of education (n=743) Educational background (n=743)
3 3
Secondary School Engineering 13
Higher education at Physical Sciences 30
2
non-university level Management or Economics
Higher education at 32 Social Sciences
university level Other
Other
6
62
49
11
Figure 5 shows that management, The vast majority of the supply chain
economics and engineering are the most managers took their supply chain education
popular educational background of the on the job. Figure 6 shows indeed that less
supply chain manager. than half of the supply chain managers (42%)
report a substantial education in the field.
Again, we observe differences across
Belgium and the Netherlands score fairly
countries, as indicated in Table 2. In the
similar, with 45% and 49% respectively.
Netherlands, there are considerably more
The supply chain managers in the UK score
supply chain managers with a background
lower, with only 30% reporting a substantial
in management or economics (63%),
education in supply chain management. As
compared to 42% in Belgium and 39% in
the discipline of Supply Chain Management
the United Kingdom. Belgium, on the other
and its educational programs only exist for
hand, has proportionally more engineers
10 years, these numbers could be considered
(38%, against only 16% in The Netherlands
relatively high. Nevertheless, we cannot
and the UK). Finally, we observe that in the
ignore that almost 60% of the supply chain
UK there are more supply chain managers
managers didnt enjoy any formal supply
with a background in physical sciences in
chain education. This should be an area of
comparison to the other countries.
concern for the CEO.
It seems that it is not too important in which
field the supply chain manager took his
first education. What matters most is the
capability for continuous learning, either
on the job, or through advanced executive
course work, or a combination of both.
Table 1
Level of education by country
Table 2
Educational background by country
In a recent Harvard Business Review Loyal to the job, loyal to the company
article, Slone, Mentzer and Dittmann warn
Figure 7 indicates from which departments the
that many CEOs fail to realize that supply
supply chain managers are recruited. Four out
chain has become such a complicated
of ten supply chain managers are coming from
set of activities touching many business
the logistics or supply chain department, whilst
functions and processes, reaching beyond
20% of them are recruited from the operations
the enterprise, and presenting a range of
department. Few (about 10%) are coming from
strategic opportunities that it cant be
marketing and sales or procurement.
competently managed by the uninitiated, no
matter how generally capable they might be. The logistics or supply chain department is
Senior executives need to have a background probably the most obvious one to recruit
in supply chain management: formal the supply chain manager from. However,
education, significant prior experience, or because of the broad scope and the
both. (Slone et al., 2007) As we will see later, interdisciplinary nature of the function, it is
the level of prior experience of the top supply quite natural that we see people coming from
chain manager is usually quite high; the data very different functional backgrounds as
on education in supply chain management, supply chain managers.
on the other hand, is less encouraging. Table 3 summarizes the years of experience
Most supply chain managers take their of the supply chain managers in a supply
professional education in the first 15 years chain function and in the company they
of their career. It is striking that 16% of the currently work in. The majority of the supply
junior supply chain managers, who have chain managers (72%) have been in a supply
been in their function for less than 2 years, chain function for more than 5 years. Also,
report a substantial supply chain education. about half of the supply chain managers
The success of the relatively new degrees (53%) have been with their current employer
in logistics and supply chain management for more than 5 years. It seems to be a
offered at Master level in universities and community of professionals who are loyal to
other institutions of higher education seems the job and loyal to the company.
to have an impact on the inflow of people in However, we observe (again) a striking
the supply chain function. difference across countries. We find the
lowest degree of loyalty in the Netherlands:
only 41% of the supply chain managers in
the Netherlands have been with their current
employer for more than 5 years, against 62%
in Belgium and 63% in the UK.
Figure 6 Figure 7
Education in SCM (n=743) Functional background (n=743)
20
13
Interestingly, 30% of the supply chain Overall, the profile of the supply chain
managers have many years of experience in manager that emerges from the statistics
a supply chain function, but have joined their shows us an experienced person, who is
current employer in the course of the past loyal to the supply chain profession, and loyal
5 years only. This shows that there is a job to the company.
market of highly experienced supply chain
Obviously, this high level of experience
managers, willing to change employer.
and seniority is a strong advantage that
Table 4 shows the same statistics, but guarantees a good knowledge of the supply
only for those supply chain managers who chain and a good understanding of supply
report to be the highest in rank in supply chain challenges. On the other hand, if not
chain management in their company (350 well managed, the drawback can be a lack
of the 743 managers), the top supply chain of new ideas and cross-functional initiatives.
managers. It is therefore important that attention is paid
to continuous learning and to interaction and
Clearly, these top supply chain managers
coordination with other functions within the
are very experienced: 78% of them have
company, as well as with other partners in
been in a supply chain function for more than
the supply chain. We will come back to the
5 years; 58% have been in the company
need for these coordination mechanisms in
for more than 5 years. Again here the data
Part Two of this report.
shows that about one third of the top supply
chain managers (30%) have been hired from
outside the company over the last 5 years.
Table 3
Years of experience (n=743)
Table 4
Years of experience (n=350)
The group of experienced supply chain It seems that companies are not very much
managers who have joined the company inclined to invest in supply chain education
recently, shows a higher proportion of for their employees, or they cant afford
managers with substantial supply chain the time it takes before the investment in
education (56%), compared to the managers education brings return to the company.
who have grown into their job from within the However, they do value it in their recruitment
company (43%), as is shown in Table 5. of new talent.
Table 5
Years of experience (n=743)
Figure 8
Importance of skills today (n=743)
The future is even more demanding Supply Chain Manager The new CXO ?
None of the skills is expected to decrease in Although supply chain management is a
importance in the near future (see Figure 10). young profession, the supply chain function
This tells us that the bar is being raised for has reached the strategic level in many
the supply chain manager; the job requires companies. This clearly shows from the
ever more skills and competencies. statistics on the position of the supply chain
manager in the organization. Among the top
Interestingly, the third category of skills
supply chain managers, 74% report directly
the knowledge of the business context - is
to the CEO or to the general manager of their
expected to gain in importance more than
business unit; 70% of the top supply chain
the soft skills and the functional expertise.
managers are a member of the executive
The globalization and the growing awareness
committee in their company or business
of the climate change are having an impact
unit; and 41% report being a member of the
on the skill set that is required for the supply
board. Clearly, we find the manager who is in
chain manager!
charge of the supply chain at C-level in most
If this trend indeed takes place, the supply of the companies.
chain manager of tomorrow needs to have
In the Netherlands only 68% of the top
a well balanced competence profile, with a
supply chain managers report to the CEO
good blend of soft skills, in-depth functional
or general manager, compared to 81% in
expertise, and a good understanding of the
Belgium and 78% in UK. Analogously, 65%
business context. Developing this skill set
of the top supply chain managers is member
takes time and requires a willingness to invest
of the Executive committee, compared to
in education and training.
71% in Belgium and 85% in UK.
Figure 10
Expected change in importance of skills (n=743)
Table 6
Years of experience (n=52)
Profile: Source and make and deliver Years with current employer Total
0 to 5 years 6 years or more
0 to 5 years 0 1 1
Years in SC function
6 years or more 2 10 12
Total 2 11 13
23
distribution. And thirdly, the full scope the general manager in the business unit) is
supply chain manager, who combines substantially higher in the category of the full
all four responsibilities, that is planning, scope supply chain managers than in the
sourcing, manufacturing, and distribution. other two categories. The same conclusion
In what follows, we will describe these three holds for the percentage of managers being
dominant profiles in more detail. a member of the board or the executive
committee of the company or the business
Table 6 shows that almost all full scope
unit. This tells us that the full scope supply
supply chain managers have been in the
chain managers, who are overlooking the
company for more than five years, and
three functional areas, play a strategic role in
have been in a supply chain function for
the company, whereas the ones who have
more than five years. They are clearly quite
a more limited functional scope are working
senior managers. This proportion is much
more on an operational or tactical level.
lower for the downstream supply chain
managers. Quite a few of them have been This image is confirmed by the data on the
in the company for less than six years, and/ responsibility of our three profiles of supply
or have been in a supply chain function for chain managers (see Figure 16). In terms of
less than six years. They are rather junior operational and planning responsibility, we
managers. The up and downstream supply dont see a significant difference between
chain managers are positioned somewhat in the three categories. However, the full
between in terms of years of experience. scope supply chain managers have a higher
level of strategic responsibility. The extra
Figure 15 shows that the percentage of supply
responsibilities they have, compared to their
chain managers reporting to the CEO (or to
colleagues in the other two categories are,
Figure 15
not surprisingly, related to manufacturing.
Reporting level (n=52) They typically are in charge of manufacturing
network design, of the decision of what to
Deliver make where and of technology decisions.
They also have strategic sourcing
Source & deliver responsibility, which is equally the case for
their up and downstream colleagues.
Source, make & deliver
In Figure 17, we can observe a clear
difference in the time allocation of our supply
%0 10 20 30 40 50 60 chain managers.
Reporting to the CEO Member of board (or exec comm.)
Figure 16 Figure 17
Level of responsibility (n=52) Time allocation of the SC manager (n=52)
The full scope supply chain manager spends The full scope supply chain managers
a great deal of his time as the managing have a broad range of responsibilities.
executive. This is less the case for the other Their function combines the sourcing,
two categories of supply chain managers, who manufacturing and distribution responsibility.
spend more time as consultant. These all round managers are clearly the
more senior managers, and they occupy a
They have a more balanced time allocation,
strategic position in their company. They
dividing their time more evenly over the roles
have strategic responsibility in sourcing and
of the managing executive, the consultant
in manufacturing. Many of them report to the
and the integrator.
CEO and are a member of the board or the
Bringing these characteristics together, we executive committee in their business unit.
get a better picture of the three profiles of
supply chain managers that prevail in the Different industry, different supply
pharmaceutical, chemical and food and chain managers?
beverage industries.
Finally, we looked into the industry in which
The downstream supply chain managers they are active. Table 7 shows a striking
are in charge of planning and distribution difference. In the pharmaceutical industry,
and thus have a limited, functional scope. the vast majority of supply chain managers
They have a fairly junior profile; they typically are downstream supply chain managers.
have only a few years of experience in In the chemical industry, we still find many
supply chain management or they joined the downstream supply chain managers,
company in the last couple of years. They but also a large proportion of up and
carry mainly operational responsibility and downstream supply chain managers. In
planning responsibility. Because of their the food and beverage industry on the other
limited scope, they feel the need to interact hand, we mainly find full scope supply chain
with other departments in the company, managers, next to again a large proportion
which makes them internal integrators. of downstream supply chain managers.
The up and downstream supply chain This suggests that the preference for one of
managers combine sourcing and distribution the three profiles of supply chain managers is
responsibility. They are less junior than the dictated by some industry characteristics. It
typical downstream supply chain manager. looks like different industries need a different
Quite a few of them report to the CEO and/or supply chain organization. This warrants
are a member of the board or the executive further investigation. In Part Four, we will
committee. therefore analyze and compare the supply
chain organization of the three industries: the
pharmaceutical, the chemical and the food
and beverage industry.
Table 7
Profile of SC managers by industry (n=52)
The scope of the supply chain responsibility is typically not part of their job.
function differs Apparently, a colleague in the organization is
in charge of sourcing and/or manufacturing.
In the previous sections, we have discussed
the four main elements of the supply chain So clearly, the supply chain manager in
function: planning, sourcing, manufacturing the pharmaceutical industry doesnt have
and distribution. When comparing the supply an overall, cross-functional responsibility.
chain managers across the three industries Rather, his attention is focused on getting
that we studied pharmaceuticals, chemicals the product to the market, whilst others in
and food and beverages we observe clear the organization are focusing on getting the
differences in the scope of their function. product sourced and produced.
In Part Three, we had already observed that The scope of the supply chain function in the
the downstream supply chain managers chemical industry differs from the scope in
are well represented in the pharmaceutical the pharmaceutical industry in one aspect:
industry. When looking at the responsibilities sourcing. Given that we have already observed
of all supply chain managers in this industry, that this industry has a relatively large
we clearly see this focus on planning and number of up and downstream supply chain
distribution (see Figure 18). The majority managers, it doesnt come as a surprise that
of the supply chain managers in the more supply chain managers have sourcing
pharmaceutical companies have planning as one of their responsibilities (see Figure 19)
as one of their responsibilities. And every compared to the pharmaceutical industry.
single one of them is in charge of distribution
However, the chemical industry compares
(deliver). The source and make
to the pharmaceutical industry in its small
proportion of supply chain managers with
Figure 18 manufacturing responsibility.
Scope of the SC function in the pharmaceutical industry
The scope of the supply chain function in
Plan the food and beverage industry is typically
Source broader (see Figure 20). Most supply chain
Make
managers have all four responsibilities:
planning, sourcing, manufacturing and
Deliver
% 0 20 40 60 80 100
distribution. In this industry, we seem to
find the managers that correspond best
Plan with the common definition of supply
Source Make Deliver
chain management as a cross-functional,
integrative, process oriented area.
Figure 19 Figure 20
Scope of the SC function in the chemical industry Scope of the SC function in the food and beverage industry
Plan Plan
Source Source
Make Make
Deliver Deliver
% 0 20 40 60 80 100 % 0 20 40 60 80 100
Plan Plan
The position of the supply chain The top supply chain manager in the
manager differs pharmaceutical industry spends his or her
time mainly as the managing executive, the
The supply chain managers in these three
consultant and the internal integrator. In
industries do not only differ in terms of
the chemical industry, the top supply chain
the scope of their function; they also on
manager spends proportionally less time as
average spend their time differently, as is
integrator, and more time as the managing
shown in Figure 21.
executive. Finally, in the food and beverage
industry, the supply chain manager spends
even more of his time as the managing
executive. Being in charge of all three
Figure 21
functional areas sourcing, manufacturing
Time allocation of the SC manager and distribution he or she apparently
manages these areas by delegating
Pharmaceuticals Missionary responsibilities in a rather hierarchical
15 23 26 21 15 Consultant
Managing Executive
organization model.
Internal Integrator
Chemicals External Integrator Another remarkable difference is the
13 26 33 17 11
percentage of top supply chain managers
Food & beverages
that report to the CEO: not a single one of the
11 15 42 19 13 respondents in the pharmaceutical industry,
%0 20 40 60 80 100
against about one third (30%) in the chemical
industry, up to almost one out of two (47%) in
the food and beverage industry.
Table 8
Supply chain maturity levels
Table 9
Days of inventory
The three industries also score very The structure of the supply chain differs
differently in terms of the number of days
Not only do these three industries differ in
of inventory. (See Table 9) The average
terms of the strategic importance of their
company in the food and beverage industry
supply chain. They also differ in terms of the
reports 36 days of inventory, against 96 days
complexity of the structure of their supply
in the chemical industry and 177 days in the
chain, ranging from rather short, local chains,
pharmaceutical industry.
to truly global chains.
Obviously, the high level of inventory is to
As one can see in Table 10 (overpage),
some extent explained by technological
the proportion of global sourcing, global
process characteristics that ask for large
manufacturing and global sales is the highest
batch sizes and safety stocks. But it probably
in the pharmaceutical industry. Compared
also signals that the pharmaceutical, and to
to the companies in the other two industries,
some extent also the chemical companies,
the pharmaceutical companies have the most
have not (yet) paid as much attention to
global supply chain. The chemical companies
inventory reduction as the food and beverage
distribute their products predominantly in
companies. This again suggests that the
Europe. Most of their manufacturing and
supply chain function has received more
sourcing is European or global. The food and
strategic attention in the food and beverage
beverage companies, not surprisingly, have
industry than it has in the other two industries.
the majority of their sourcing, manufacturing
In sum, we conclude that relatively and sales at the national or the European level.
spoken - the strategic importance of the
In sum, we find the most global chains in
supply chain is considered rather low in the
the pharmaceutical industry. The chains in
pharmaceutical industry, at medium level in
the chemical industry are mainly European,
the chemical industry, and high in the food
whereas the chains in the food and beverage
and beverage industry.
industry are local or European.
30
Table 10
Degree of internationalisation of the supply chain
Figure 24
Supply chain organisation for different industries
High Plan
Relative strategic importance of the supply chain
Plan
Medium
Source Make Deliver
Chemicals
Plan
Low Pharmaceuticals
Supply chain structure
Appendix+
33
Contacts
Vlerick Leuven Gent Management School
Operations and Technology
Management Centre
Reep 9
9000 Gent
Belgium
Goodman
Boechoutlaan 55
1850 Strombeek-Bever
Belgium
ISBN-Number 9789078858256
EAN 9789078858256