The Rise and Rise of the Supply Chain Professionals

Supply Chain as a profession is certainly garnering more attention and profile over the last few years. This is not just in the education front, although that is definitely a major triumph with many institutions today offering supply chain and logistics as specialized programs.

Recently, the Forbes 400 list highlighted some interesting stats on individuals who make their wealth from the logistics, transportation and supply chain sectors. Martha Ingram, 76, former chairman of Ingram Industries, has a net worth of USD3 billion and ranks at 117 on the Forbes 400 list of wealthiest Americans. Donald Schneider, the former founder of Schneider National is ranked 159th and has a net worth of USD2.5 billion. Frederick Smith, 67, the founder of FedEx, the second-largest U.S. transportation company, ranks 263 on the Forbes 400 with a net worth of USD1.7 billion. Irwin Jacobs, the founder of Qualcomm, which revolutionized trucking technology before turning to cell phones, ranked 372 with a net worth of USD1.15 billion.

And even more recently, initially with the announcement of Steve Jobs retirement from the role of CEO of Apple Computer (and sadly his death subsequently), we have a supply chain professional heading the second most valuable company in terms of market capitalization today. Mr Tim Cook was recruited by Jobs in 1998 and rose up to become a trusted lieutenant within his inner circle. But it is Cook’s background in materials management, fulfillment and supply chain that fit into the final puzzle of what Jobs need in conquering the world with his creation – in a globalized and profitable way.

When Cook first joined Apple in 1998, it was still running its own factories in California, Ireland and Singapore. While more profitable and efficient companies like Dell had moved to a just-in-time manufacturing model, Apple still held 90 days of inventory. Cook closed Apple's factories and outsourced all manufacturing to a network of suppliers in Asia. Inventories decreased to 60 days, then to 30 days, then to the just-in-time model. Cook's supply chain strategies have revolved around reducing inventory levels to increase margins. He's been able to do this by pulling Apple out of the manufacturing business and choosing to invest its capital on manufacturing partners, who in turn give Apple exclusive deals for the best electronic components.

Many analysts credit Cook's efforts on the production end as the key difference in turning Apple's fortunes around, although we should not take this as saying that Jobs vision of what consumers want is still the driving factor of Apple Computers.

With such success stories becoming MBA case studies, you can bet that more and more companies will start to review their supply chain strategies and tactics as another path to success. In fact, there is already heavy emphasis by many companies to view their supply chain capabilities as a key differentiator in the marketplace. In fact, increasingly, companies are looking for potential candidates with supply chain knowledge to fill the role as CEO.

In May this year, Hershey promoted supply chain chief, John Bilbrey, to interim CEO. According to the company's press release, "Bilbrey played a key role in the company's turnaround as well as in the creation and implementation of the company's confectionery demand landscape and establishment of Hershey's presence in markets around the world."

A few months into his job, Bilbrey form a collaborative partnership with Italian food company The Ferrero Group to partner on a joint warehousing, transportation and distribution initiative in North America. The alliance is an effort for the companies to continue “improving supply chain efficiency and competitiveness, with those goals starting to be realized by next year”.

Indeed, supply chain and logistics management is increasingly being aligned with business strategy in order for companies to remain competitive and profitable. Given the complexities in supply chain relationships, as well as the difficulty of streamlining the supply chain in a global economy, a larger focus on supply chain management is becoming a necessity.

With the rise in profile and attention, companies are also realizing the significance of having a senior executive, or even a CEO, who is able to understand and respond to necessary changes within the company's supply chain in order to remain not only competitive but profitable.

All these certainly make it exciting for those who are keen to embark on a career in this field or who have spent many years honing their knowledge and skills, waiting for the next opportunity to shine.