What is Supply Chain Management?

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What is Supply Chain Management - Photo by Fauxels
Let's take a moment to answer some higher-level questions. If you're new to Supply Chain Management, or considering getting a degree, below should give you a clear view as to what Supply Chain Management entails. 

What is Supply Chain Management?

At it's highest level, Supply Chain Management is the action of managing supply versus demand for goods or services from conception to the final customer, and all the steps in between. The end goal of Supply Chain Management is to ensure goods are made and delivered to meet the demands of the final customer. (Even if that customer is another business).
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Supply Chains include everything from planning how to make a good, to ordering supplies to manufacture it, as well as scheduling each part for production. It includes the packaging and delivery of the good, the distribution center where the good will be sorted and shipped out to either a retail shop or directly to a customer.
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Some people typically think of Supply Chains and consider the logistics part of it, imagining the actual truck that takes goods from a warehouse and makes deliveries - but Logistics is only one small part of the overall Supply Chain.
Here are just a few of the processes involved in Supply Chains, so you can imagine how many people are involved from beginning to end:
  • Procuring materials for manufacture
  • Transporting raw materials
  • Manufacturing the goods
  • Packaging and transporting the finished product
  • Delivering and distributing the final product to end customers or retailers
  • Financial accounting for all of the above
  • Managing returned goods or recycling used goods

What is the Textbook Definition for Supply Chain Management?


I've found CSCMP's page on this topic pretty useful, if a little drawn out and dry. You can read their glossary page here.

The supply chain management (SCM) profession has continued to change and evolve to fit the needs of the growing global supply chain.  [..] CSCMP and the board of directors, comprised of industry experts, created official definitions for the following terms.

CSCMP’s Definition of Supply Chain Management
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. [...] It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

What is the Reverse Supply Chain?


Nowadays, we also include the reverse Supply Chain when discussing Supply Chain Management (SCM) - meaning, what happens when the good is no longer usable, or becomes obsolete. This can be a recycling process or a returns process, where the consumer could take the good to a commercial site to be recycled, or return the good directly to the company which produced it, to be recycled or safely destroyed.
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As time goes on, the reverse side of the Supply Chain is becoming more relevant, as younger generations are having to face the direct consequences of climate change head-on.
Consumers want to know that companies are responsibly taking care of their products from beginning to end, and a big part of that is what happens when the product has reached the end of it's usable life.

What Jobs are Included in Supply Chain Management?

As you can imagine, there are tons of jobs included in Supply Chain management. Just some are below:

  • Buyers - Those who arrange the purchasing of supplies
  • Sourcing and Procurement - Those who manage the suppliers themselves and contracts with them
  • Warehouse Managers - Managing the warehouses and workers
  • Inventory Managers - Those who monitor inventory in the plant or warehouse and let buyers know when stocks are low
  • Transportation - Managing shipments by truck, air, or ocean
  • Distribution - Managing the overall inventory sent to specific locations
  • Customs Brokers - Responsible for making sure shipments clear customs at either the first country or destination country

Along with the above, there are salesmen, accountants, and a slew of ancillary jobs that you'd see with any company. So, as you can imagine, Supply Chain encompasses a ton of different roles.

What Salary Can I Expect in Supply Chain?

I always recommend ASCM's salary survey here. Starting salaries for Supply Chain across the board are around 60k USD/year. After 10 years, average salaries rise to 90k or more.

I have seen salaries below this however; If you handle significant Supply Chain or logistics functions within your role, and you're being paid below what ASCM has lined up for their salary survey, I would take a hard look at other job postings.

What is the Day to Day like in a Supply Chain Management job?

Day to Day, Supply Chain Management encompasses many different things - transportation, managing suppliers, managing inventory levels at a warehouse, international shipping, etc. A lot of the analytics positions are your typical office jobs, lots of emails, lots of meetings, lots of phone calls in some jobs - communication is a key aspect of the industry.

I started out as a Supply Chain Analyst which was mostly data entry on 2nd shift, so the office was basically empty for most of my shift. I could listen to music while doing it. I've moved up quite a bit in just 5 years, and now I'm a Supply Chain Engineer working in automation and business analytics. It's my absolute dream job - full work from home, learning tons of technical programs and working with new customers, projects, and industries every month. My favorite thing about supply chain is there's something new every day. In Supply Chain, there's always a new challenge to overcome.

Analysts typically do data entry and work within Excel spreadsheets, logistics planners tend to be answering lots of emails and calling carriers to check where freight is. Anything in Transportation will be similar with daily communication typically required, more depending on how much freight you're handling. Buyers and procurement tend to have longer projects with plenty of meetings, meeting regularly with current suppliers to host QBR's (Quarterly Business Reviews) and having startup meetings for new projects.

Of course, positions from company to company can be drastically different. If you're wondering what the day to day is like in an interview, that's a great question to ask the person interviewing you.


How is the Job Stability in SCM?


Job Stability in Supply Chain management is very good.
Every industry requires a Supply Chain when goods and materials are involved. Even if your company goes under, or your industry as a slow down, you can find work fairly easily elsewhere once you have experience. You can also work for nearly any company in the world, so even Silicon Valley-type companies are in the realm of possibility as Apple and Google all ship goods.

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