Supply chain management (SCM) combines analytical thinking with practical steps. The goal is to manage the flow of goods and services from the suppliers of raw materials to the final product's use by consumers. When done right, it benefits businesses and customers.
To create and maintain a competitive advantage, businesses and organizations rely on supply chain management principles. A professional with a supply chain management degree can implement the latest in SCM practices and play a vital role in a business's success.
What is Supply Chain Management?
Let's start simple, with an example first coined by Leonard Read in 1958.
Consider a No. 2 pencil, the stock-in-trade tool of every grade school child. You may see it as a fairly simple item. But with a supply chain management degree from SNHU, a whole world of intriguing complexities opens up around this writing implement.
Where, for example, did the wood come from? Who were the loggers who cut down the trees, and who made the tools they used? What about the shipping company that brought that wood to a factory? It employed drivers and accountants, paid for gas and insurance as well as the salaries of support workers.
Then there's the yellow paint on that pencil. The raw materials for it were mined, perhaps, in a South American country and shipped to the U.S. by boat. The metal of the ferrule, meanwhile, came from a mine in Botswana. The rubber of the eraser? Farm workers in Malaysia harvested it by hand and packaged it to be shipped to the U.S. where it was processed, then once again packaged and shipped to the pencil factory.
Even that is just the tip of the iceberg. Someone made the machines and vehicles used at each step in refining the raw materials. There are accountants, shipping agents, truckers, and other transportation professionals involved along the way as well. In the end, thousands of individuals and hundreds of raw materials were integral in creating the tool that helps a third grader do her mathematics homework.
With a supply chain management degree, this is your world. An online bachelor's in operations management prepares you to join the professionals who ensure that the myriad steps required to bring a product or service from the beginning of its life cycle to the end are done efficiently, quickly and in a cost-effective manner. You can also pursue a concentration in logistics and transportation or in project management to further develop your professional talents and strengths in supply chain management. For everything from No. 2 pencils to Apple's digital Pencil device, the supply chain manager is the person who makes sure that processes proceed smoothly and optimally throughout production.
Why a Supply Chain Management Degree, and Why Now?
With today's interconnected and interdependent global economy, it's a great time to enter this growing field. According to the U.S. Bureau of Labor Statistics, employment of supply chain logisticians will increase 22% by 2022.* Businesses and organizations hiring for these positions look for professionals with a bachelor's degree and related work experience (including logistical work for the military).
With an online BS in Operations Management with a concentration in Logistics and Transportation, you'll combine your education and experience to start or advance your career in supply chain management.
You then have a range of career options to explore, including:
- Logistician: As the name suggests, a logistician analyses and facilitates the logistics of moving products or materials from one place to another. You'll enjoy this work if you like to think about the big picture and have a good head for projecting consumer demand and the subsequent production needs that arise from that demand.
- Purchasing Manager: The objective here is to plan and coordinate the purchase of raw materials and services for businesses and organizations. You need a keen understanding of economics and an eye for negotiating the best deals.
- Operations Research Analyst: You'll use complex mathematical formulas and advanced software applications to look at supply chains and suggest how they could be improved to save time, money and resources.
- Inventory Control Manager: For retail operations, the concise and timely replacement of stock as needed is paramount. You'll educate yourself on consumer trends both locally and globally, and ensure that products are where they should be when needed.
Already have your bachelor's degree? Consider pursuing an advanced degree to help open doors to new or higher-level opportunities in the field of supply chain management. You can choose from the or MBA in Operations and Supply Chain Management.
You many wonder about what level of mathematical skills you will need to be an effective supply chain manager. There are a series of statistical and predictive modeling and analysis tools commonly used in the industry. Courses in a master's level degree program will include those methods to increase operational efficiency. You will also likely spend time studying linear algebra, differential calculus and statistics and how those disciplines apply to business.
Supply chains have been in existence, of course, since the first marketplaces were populated by our early ancestors. A farmer, for example, might sell a bag of wheat to a baker. The baker, in turn, makes loaves of bread to meet the need of her customers. Primitive? Yes. But this chain provided a livelihood for several families, and allowed for humanity's first tentative forays into specialization. The customer, who doesn't need to spend time baking bread, can focus on being a blacksmith, forging and selling implements to people like the farmer, who uses his new hoes and rakes to plant more wheat. This system allowed humanity to flourish and grow for centuries.
Fast forward to modern times. As supply chains become more complex and dynamic, professionals who can design, manage, and improve the business practices that make up the chain are in high demand. A supply chain manager may oversee thousands of employees in a multi-national company, or she may be "in the trenches" honing supply chain processes to a sharp and competitive edge.
Make Your Mark Working With the Military
A master's in supply chain management, along with your advanced understanding of how products and services work within the supply chain, can pave the way for increased responsibilities and a more lucrative salary wherever you work. But this combination is especially advantageous for those in the military or who work with the U.S. Armed Forces.
Rena Mcpherson earned an MBA with a concentration in Operations/Supply Chain Management from Southern New Hampshire University in 2015. As a contractor with the Air Force, she knew she wanted to work for the military. However, she needed a more comprehensive education than her bachelor's degree in biology gave her. "Making a career working with the Department of Defense (DOD) was a goal that I wanted to achieve, and I felt the only way I could make it there and be successful would be to get my MBA," she said.
Mcpherson realized that to advance in her chosen field, she needed to learn more about the processes involved in the supply chains used by the U.S. military, which spends more than $580 billion annually to support its forces, according to the Department of Defense. As the mother of a young son, she was able to benefit from the flexibility of an online program, attending classes when it was convenient for her. "I hope to make my son proud one day and inspire him to go after his dreams as well," she said.
Key Components of a Supply Chain
A basic supply chain would seem to travel a straight line: from the origin point of the raw materials, to the producer, to a distributor, then retailer, and finally, the customer. But it's rarely that simple. Let's break it down a little more. As you saw from Read's classic example of the pencil, even the simplest of products can be touched by thousands of hands and multiple processes and materials. At the beginning of the manufacturing supply chain are the workers who mine, grow, build, or otherwise procure raw materials. The scope of these can be mind-boggling: Think of the thousands of disparate parts, made of metal, plastic, or other materials, that combine to create a car or a computer. The primary inputs to your supply chain might span the globe, and entail the work of many workers and numerous tiers of suppliers. Supply chain managers working at this end of the chain look at a variety of elements: cost, availability, quality, and flexibility of the suppliers, as they attempt to find the best resources for an organization.
A second element that is essential in all but the simplest of supply chains is transportation, and that, too, may be global in scope. A solid transportation infrastructure is vital to ensuring the success of the entire chain. A business can face make or break decisions based on its ability to get raw inputs to a desired location, and finished products to the marketplace. Elements to be considered include packaging, storage, insurance, and import/export regulations and tariffs. Learning to understand the logistics of the transportation flow is one of the many things you master as part of SNHU's supply chain management degree program.
Information flow is another aspect of the supply chain process, one that requires skilled individuals who are able to communicate in a variety of ways so that information is shared as needed in both directions of the chain. Supply chains are becoming ever more complex, with multiple levels of suppliers and end users (for example, a car dealership might be the primary customer of an SUV, while the millennial pocketing the keys to her first car is a secondary customer). Likewise, the information that keeps the supply chain moving has become a complex web of data flowing back and forth by methods both "old school" and technologically advanced. A supply chain manager always has one eye on the efficiency of that information flow. He or she works to integrate processes to help suppliers, manufacturers, warehouse managers, transport schedulers, and others to speak a common language.
Central to many supply chains is the manufacturing process. A supply chain manager today must have a keen understanding of what happens during that process, and will oversee the web of resources and labor that impact it. Are the raw materials being delivered on time, as needed, to the appropriate facility? Is there an adequate pool of trained skilled and unskilled workers to facilitate production? That pool includes everyone from the technician who assembles the widget, the accountant in bills payable who signs the check to the vendor for the materials, and the janitorial staff who cleans the factory floors at night.
But keep in mind that not all supply chains are based in manufacturing. Your professional options with a supply chain management degree extend far beyond the walls of your nearest widget-maker. The wholesale and retail food industry, from your local McDonald's to that high-end grocer downtown, have complex supply chains. The tourism industry is another example of a sector that requires the services of capable supply chain managers. Or consider the service industries: from the regional branch of a national salon/spa company to a city's thriving medical center, all are dependent on supply chains to provide the goods and services they need to survive and thrive.
Warehousing and distribution are at the other end of the supply chain. A large online retailer like Amazon has the seemingly impossible task of keeping hundreds of thousands of items readily available for shipping to eager consumers. Impossible, that is, if not for the efforts of skilled supply chain managers. These managers balance the desires of the customers with the capacities of the available warehouses, figuring in everything from the complexities of efficient, space-saving packaging to the schedules of shippers like FedEx and UPS. That book you had shipped overnight via Amazon Prime, at that great low price? It arrived at your doorstep courtesy of the hard work, skills, and business savvy of supply chain managers.
So your job as a supply chain manager ends as the consumer uses their shiny new product, right? Possibly, but not if you specialize in reverse supply chain management. This rapidly growing field touches on everything from the ethical recycling of plastics and other materials to the workflow for store returns.
We've talked about the chain as a straight line, but this field understands SCM to be cyclical, where delivery to the customer isn't the end of the journey. Recapturing value is key here, if possible. If not, environmental concerns and government regulations are factors that the supply chain manager considers as proper disposal becomes necessary.
Trends in Supply Chain Management: The Evolution from Chains to Webs
A growing field, supply chain management is also a rapidly changing one as new ideas and an evolving global culture and economy open up opportunities for professionals with a supply chain management degree.
At one time, all aspects of a supply chain were managed, as much as possible, within each company itself by company employees. This meant that businesses spread themselves thin as they focused on multiple priorities and tasks to create their final product or service. Today, the trend is for businesses to focus on their core products and services. Increasingly they reach out to specialized agencies across the globe to provide the goods and services needed for the end product.
Likewise, 40 years ago, it was common for each of the links in the supply chain to be viewed independently. But this approach created silos with little information flow and a level of worker isolation that could be detrimental to the overall success of the business.
Now, supply chains are understood to be more web-like than chain-like. As a result, supply chain managers are challenged to think in an integrated and strategic way that acknowledges the level of complexity in today's products and services.
When you study for a supply chain management degree, you learn that the supply chain is rarely a straight line. Raw materials may enter the stream at any point; multiple facilities may be involved in production; the logistics of travel may involve road, air, shipping, or rail options, or all four. One of your goals as a SCM professional may be to step back and view this big picture, and then carefully zero in and adjust specific elements in that chain. The endgame is to bring maximum value to the organization as well as the end user.
A single, seemingly insignificant tweak to a supply chain, say, a change in the vendor for a particular raw material, or adopting a new workflow at one stage of manufacturing, may mean the difference between success or failure of the entire chain. In short, supply chain management professionals are business-savvy people skilled at working smarter, not harder.
As an SCM professional, you will oversee a chain that may have many complex and interrelated links. This is especially true in today's economy, with the wide use of outsourcing and the increasingly sophisticated abilities and products of companies in the developing world.
Globalization has impacted every area of our lives in the 21st century, and supply chain management is no different. A skilled global supply chain manager can look beyond the potential benefits of doing business abroad (cheaper labor costs, for example). He can take into account the variable dynamics of working in a foreign country, including language and cultural differences and the ability to locate skilled workers. If you are interested in this sort of challenge and the exciting opportunities offered by playing a role in a vibrant global market, a supply chain management degree is a good option for you. For an in-depth mastery of how global companies successfully manage the flow of goods and services, an MBA in Operations and Supply Chain Management or an International MBA in the field are other options to consider.
The field of supply chain management has also been impacted greatly by an increasing emphasis on social responsibility. Today's supply chain manager or logistician responds to consumer interest in organic and sustainably harvested materials, the rights of workers, environmentally clean manufacturing, and other ethical concerns. These concerns play a primary role in sourcing materials and services in ways that don't harm the environment or the workers whose products are delivered to educated, ethically-conscious consumers. Increasingly, businesses are learning that doing good and creating financial success can go hand in hand. Supply chain managers well versed in issues of social responsibility are on the front lines of making that happen.
As supply chains have become more complex, it has become more and more important to measure success. How do you know if your business practices are providing the most "bang for your buck"? What points of measurement are the most important to collect and study, and by what standard do you measure them?
Not every data point is useful, but a good supply chain manager is able to determine those that are. Sometimes it's not enough to know that your company is meeting its quarterly sales goals. You need to know that there aren't small inefficiencies in the flow of information, raw materials, or the other links in the chain that cause a slow and nearly invisible trickle of revenue away from the business. How do you discover that leak? Once again, it's the supply chain manager who acts as Sherlock Holmes to find and fix the barriers to success.
Without using integrated supply chain management in theory and practice, our economy would grind to a sudden halt. With your supply chain management degree from SNHU, you'll find a broad range of professional opportunities that allow you to play an essential role in bringing valuable products and services to customers by optimally managing processes, resources, and capabilities.
*Job market data from the U.S. Bureau of Labor Statistics Occupational Outlook Handbook is intended to provide insight on occupational opportunities and is not to be construed as a guarantee of salary or job title. SNHU cannot guarantee employment.