A supply chain manager discusses supply chain challenges with coworkers in a factory.

Why Is Supply Chain Management Important to Industry?

Business Administration

Machine learning and other artificial intelligence (AI) approaches improve the accuracy and timeliness of business demand forecasts; yet, the tools most manufacturers use to manage the delivery of goods to meet demand are not as innovative. The growing gap between enhanced forecasting and faster, more efficient delivery is a major reason why supply chain management is so important to the industry.

The logistic management of goods from manufacturers to consumers is one function affected by business digital transformation.  Unified, end-to-end business management processes supported by cloud technology are replacing manual tools such as spreadsheets.  As pressure builds on companies to reimagine supply chain operations, the roles of logisticians and other supply chain managers become even more vital to a company’s success.

The evolving roles of supply chain managers in addressing future logistic needs of organizations require training focused on new methodologies. Master of Business Administration programs are helping professionals meet the demand for unified supply chain management in an all-digital environment by focusing on a broad range of practical business process expertise grounded in critical thinking, creativity, and communication skills. 

What Does Supply Chain Management Involve?

One reason why supply chain management is important to industry is the need to reduce expenses by operating more efficiently as operations become more complex.  Accomplishing this goal requires substantial changes to four important components of the supply chain, as Fortune explains:

  • Reducing energy consumption during transportation
  • Lowering labor costs via automation
  • Meeting consumer demand for a more diverse inventory
  • Managing increases in real estate rents as inventory is stored closer to population centers

Digitizing supply chain management, in particular, presents four key opportunities to improve business planning, as Gartner explains:

  • Variability is decreased.
  • Bias is identified and addressed.
  • The quality of data is improved.
  • More accurate business models can be developed.

A primary characteristic of digital supply chain management is pushing the edge of the network beyond the warehouse via smart sensors and other internet of things (IoT) technologies. According to Logistics Management magazine, “digital edge technologies” include advanced warehouse controls, or warehouse execution systems, that can respond in near real time to alerts from sensors with deliberate programmed actions. Sensors integrated to the network extend beyond reporting on warehouse assets to weather, social, and news feeds in near-constant communication with truck fleets and other components of transportation networks.

The first step in implementing a digital supply chain management system is understanding how logistics fits in the company’s comprehensive digital vision. Gartner states that companies must first decide on the digital experience to provide to their customers, and, then, determine the most effective way of delivering that experience. For example, digital supply chain management enables continuous monitoring of equipment at diverse locations, which improves maintenance, troubleshooting, and response times. It also supports the collection of valuable data for analysis to improve the speed and efficiency of the supply chain.

Gaining the Knowledge for Effective Supply Chain Management

Mastering the intricacies of the modern business supply chain requires diverse management skills that encompass material handling techniques, logistics,  monitoring technology, communication, and team building. Supply chain managers move beyond the traditional core competencies of supply chain management — negotiating skills, sourcing material, and determining cost-price ratios —to think about the supply chain in strategic terms that align with the organization’s overall goals, explains Inbound Logistics Magazine.

Canadian logistics firm Argentus lists the skills that supply chain managers will require in the future:

  • Application of IoT, AI, and other technologies to strategic supply chain planning.
  • Collaboration, relationship management, and change leadership to implement end-to-end supply chain management.
  • Analytics for making faster decisions based on complete, up-to-date data.
  • Problem-solving and risk management within a dynamic decision-making environment.
  • The ability to lead the reengineering of business processes within and outside the supply chain.
  • Implementation of best practices across knowledge areas within the company and spanning industries.

The core competencies associated with the supply chain management role, such as advanced project management, leadership skills, and strong technical and economic knowledge, are the foundation of the Supply Chain Management concentration in Norwich University’s online Master of Business Administration program. The core and concentration courses in the program help prepare students for success in all aspects of managing supply and demand within organizations.

The following are among the core courses in the program:

  • Strategic Resources Management. The focus of this course is the management of a company’s intangible assets, such as human motivation and organizational behavior.
  • Managerial Finance. Challenges related to financial efficiency, cash flow, and other matters falling under the duties of the chief financial officer are covered in this course. Topics include capital budgets, valuation models, and risk and return analysis.
  • Strategic Marketing and Operations Management. This course studies the smooth integration of marketing and operations management, presenting the product life cycle model to illustrate approaches to combining marketing and operations in ways that support the natural evolution of products.

The courses in the Supply Chain Management concentration teach the skills required to capitalize on the modernization of business processes within and outside the supply chain:

  • Supply Chain Management Strategy, Planning and Operations. Strategies are studied in terms of the supply chain’s scope, performance, and suitability to the organization’s needs. Topics include supplier management, inventory strategies, demand forecasting, dealing with uncertainty, and technologies that improve supply chain speed and flexibility.
  • Supply Chain Management Logistics, Design and Execution. This course covers warehouse design, capacity management, logistics metrics for costs and performance, and how to create a responsive supply chain. The focus is on delivering customer value while managing complexity and risk by applying advanced supply chain analytics.
  • Supply Chain Management Assessment, Integration, and Optimization. This class focuses on techniques that help companies optimize their supply chains, including value assessment, supply chain baseline and optimization, capacity management, project management, constraint optimization, time estimation, and quantitative risk assessment.

Supply Chain Manager Responsibilities, Salaries & Job Growth

Supply chain managers are responsible for five distinct areas of the logistics operation explains Investopedia:

  • Devising strategies and plans.
  • Finding sources for all required raw materials and services.
  • Ensuring the productivity and efficiency of manufacturing.
  • Ensuring the timely delivery of required materials to all locations (logistics).
  • Supporting the return of faulty or unwanted parts and products.

Supply chain managers also must recommend improvements to address inefficiencies in business processes. The globalization of business makes it more likely that supply chain managers will travel to remote locations, which requires an understanding of international finance, business ethics, and cultural differences.

Among the duties of logisticians listed by the U.S. Bureau of Labor Statistics (BLS) are managing the product life cycle from inception to recycling; monitoring the provision of equipment, materials, and supplies; nurturing business relationships with suppliers, and identifying improvements that save the company time and money while enhancing customer experiences.

The BLS reports that the median annual salary for logisticians was $74,600 in 2018, while November 2019 PayScale data lists the median annual salary for supply chain managers as $81,641. The BLS forecasts that the number of jobs for logisticians will increase by 5% between 2018 and 2028, which equals the growth rate for all jobs in the period. However, Harvard Business Review points out that the U.S. supply chain economy represents 37% of all jobs and offers “significantly higher than average wages” because it’s responsible for “much of the innovative activity in the economy.”

Learn More About a Master of Business Administration

Why is supply chain management so important to the industry? Modern supply chains are the engines that drive advances in the design, manufacture, and distribution of products and services, spurring economic growth. Supply chain managers are at the core of this exciting area, serving as collaborators, innovators, advisors, and leaders in their organizations. Preparing for a career in supply chain management begins by acquiring the skills that tie together the many business processes involved in the design, manufacture, marketing, and distribution of products and services.

Learn more about how the Norwich University online Master of Business Administration program’s Supply Chain Management concentration that provides professionals with the knowledge and skills needed to thrive in a career as a supply chain manager.


Recommended Readings

What Is an MBA? Seven Different Concentrations Support Greater Career Opportunities
A Look into the Future of Project Management
MBA vs. Master’s in Finance: Which Works Better for Your Future Career Path?


The 7 Dimensions of Digital Supply Chain Planning, Gartner
The Evolution of the Digital Supply Chain, Logistics Management
3 Steps to a Digital Supply Chain, Gartner
Delivery Is Getting More Complex, but Will Soon Be Faster and Cheaper, Fortune
Core Competencies Every Supply Chain Manager Needs, Inbound Logistics
The Top 10 Supply Chain Skills of the Future, Argentus
Master of Business Administration, Norwich University
Job Description and Salary: Supply Chain Management, Investopedia
Logisticians, U.S. Bureau of Labor Statistics
Average Supply Chain Manager Salary, PayScale
The Supply Chain Economy and the Future of Good Jobs in America, Harvard Business Review

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