It really bothers some people that the term “supply chain” remains in wide use. For example, Kevin O’Marah (@komarah) writes, “‘Supply chain’ is a label with baggage. In some circles it is still seen as a low-tech, non-creative servant function hardly worthy of a Harvard MBA.”[1] To some the term might conjure up Sam Cooke’s lyrics in the song “Chain Gang”:
All day long they work so hard
Till the sun is goin’ down
Working on the highways and byways
And wearing, wearing a frown
You hear them moanin’ their lives away
Then you hear somebody say
That’s the sound of the men working on the chain gang
If O’Marah is correct, you could change Cooke’s last line to read: That’s the sound of the men (and women) working in supply chain. Name changes are difficult to make, especially if they have been used for a long time. The term “supply chain” is a good example of that. Supply “chains” are no longer linear links that connect operations from resource to consumer. Today, supply chains are networks that have evolved with the times. O’Marah adds, “Champions of supply chain (myself most certainly included) have worked to lionize the profession by showing how it works to drive profits, deliver innovation and improve lives.” Many people are beginning to understand the importance of supply chain operations in maintaining a healthy economy.
The supply chain economy
Author Michael Blanding (@michaelblanding) reports on the work of two researchers, Mercedes Delgado, professor at Copenhagen Business School, and Karen Mills, a Harvard Business School Senior Fellow, and how they unearthed a source of better jobs hidden in plain sight. He writes, “Call it the supply chain economy.” He explains, “Like archaeologists digging on a remote hillside, business researchers have unearthed an important segment of the United States economy all but hidden from traditional innovation policy, yet accounting for tens of millions of jobs crucial to America’s ability to produce goods and services. The research rethinks what academics and practitioners have simply called the supply chain — a loose federation of individual suppliers that feed companies with the goods and services necessary to create products for consumers and businesses. But a deeper look reveals existence of an important ‘supply chain economy’.”[2] How big is the supply chain economy? Blanding reports, “According to the researchers, ‘Supply chain industries are a distinct and large segment of the economy. In 2015, they accounted for over 53 million jobs, 43 percent of US employment.'” Mills asserts, “We think this is a breakthrough — a new way of categorizing the economy that recognizes the unique role of suppliers, and seems to have implications for policies that promote innovation and good jobs.”
Dan Gilmore, editor of Supply Chain Digest, writes, “Now is a great time to be a supply chain professional. First, there is the growing recognition of the role supply chain management in making the world a better place. How? By getting the products people need where they need them at a very low relative cost versus decades past. … Moving goods efficiently from point A to B really does promote the social good — though I will acknowledge not many outside of supply chain understand that, but it’s true.”[3] He adds, “Here’s another thought to add to your ‘feeling good to be in supply chain frame’ of mind. It just might be supply chain that is keeping the economy humming along.”
The supply chain offers cutting edge job opportunities
Far from the boring, low-tech, non-creative servant function O’Marah believes the term “supply chain” generally brings to mind, supply chain jobs can be found on the cutting edge of technology. Gilmore writes, “These are highly exciting times to be a supply chain professional, given the unprecedented advances in technology and other innovations. Drones, autonomous trucks, mobile robots, AI, efulfillment innovation — I doubt we will ever see such times again.” As a champion of supply chain operations, O’Marah believes times are changing and young people understand the importance of supply chain operations. Perhaps it’s their keen awareness of e-commerce fulfillment. O’Marah writes, “Among the young, perceptions of ‘supply chain’ are dramatically more favorable than among the old. In fact, according to consumer survey data collected by my colleague Matt Davis, the typical 20-year-old is 35 times more likely to have a positive than a negative reaction to the term ‘supply chain’. His or her grandparents are much less friendly to us.”
Joe Limbaugh, Motion Industries’ Senior Vice President of supply chain, operations support and marketing, insists, “You do not have to look very far to see a new application or article illustrating the benefits [of smart supply chain technologies]. I have been around long enough to remember when distribution centers were regarded as necessary evils. There was no real case to be made for investment, and they looked and operated like it. Other supply chain areas, like purchasing and inventory control, operated in separate and distinct silos, so communication and resulting strategy were sparse at best. Automation began to change that, especially where sortation was concerned. Fast forward to today, and warehouse-management systems have become extremely sophisticated. Couple that with a practice that unites all supply chain departments under one structure, and you can see how the game has changed. It’s supply chain’s time in the sun!”[4]
Concluding thoughts
I agree with Limbaugh that the time has come for supply chain professionals to enjoy the light of the sun. Understanding the importance of the supply chain to the U.S. economy, as discovered by Delgado and Mills, should help keep supply chain professionals in the spotlight. Blanding writes, “They discovered that supply chains represent an enormous part of the United States economy, and are the source for its highest paying jobs. What’s more, most of those jobs are not in supplying parts, but rather in supplying services, such as in engineering, computer programming, and design. Their findings offer a new way to break down the US economy beyond the traditional manufacturing-services divide, and to look instead at the hidden role of the supply chain economy in powering innovation and employment. … Recognizing and building upon the importance of the supply chain economy will be a good way to keep America a leader in growth and innovation.” Nevertheless, the term “supply chain” still nags at people like O’Marah. He writes, “[The] supply chain still struggles with semantics. Experimentation with new terminology such as ‘value chain’, ‘demand chain’ and ‘supply network operations’ often confuses business colleagues who typically work with clear functional boundaries and stable, objective metrics. After all, if it is supposed to be end to end, what doesn’t supply chain own? … The name ‘supply chain’ is only as boring or as exciting as the work you do. Marketing stokes customer desire or demand. R&D invents things to satisfy that demand. Supply chain is about making it happen profitably, reliably and as fast as possible. … There’s nothing boring about that.”
Footnotes
[1] Kevin O’Marah, “The Semantics of Supply Chain,” Forbes, 5 July 2018.
[2] Michael Blanding, “The Secret Life of Supply Chains,” Working Knowledge, 25 March 2019.
[3] Dan Gilmore, “Supply Chain Saves the Economy?,” Supply Chain Digest, 26 July 2019.
[4] Staff, “It’s the supply chain’s time in the sun!” Smart Industry, 22 April 2019.
