Guide to College Majors in Supply Chain Management
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What is Supply Chain Management?
Supply chain management is the identification, acquisition, access, positioning and management of resources an organization requires, or anticipates they will, in order to meet their strategic goals. |
The management of supplies is as important a function as finance, marketing, or human resources functions in terms of overall business success. Without the supplies you need, you can't produce; with too much surplus inventory, you're tying up valuable assets; by not getting the best prices for raw materials, you diminish company profits and increase costs to consumers. The supply management department may be responsible for spending 50-60% of the gross revenue in an organization, and thereby can exert significant leverage on profitability and operational success.
The management of supplies is as important a function as finance, marketing, or human resources in terms of overall business success. Without the supplies you need, you can't produce; with too much surplus inventory, you're tying up valuable assets; by not getting the best prices for raw materials, you diminish company profits and increase costs to consumers. The supply management department may be responsible for spending 50-60% of the gross revenue in an organization, and thereby can exert significant leverage on profitability and operational success.
The supply management field continues to evolve from basic contract management with suppliers and distributors to a more proactive, strategic process with business partners and suppliers to create shareholder value. With many the clerical tasks now automated, the purchasing professional is free to work strategically with management.
As a supply chain manager, you may have the opportunity to expand your duties into such areas as planning and policymaking, motivation, evaluation, product development, and inventory control. Depending on the size of the organization, you may have a variety of responsibilities or you may focus on just one area of the supply chain. Some supply managers are actively involved in product design and development, while others may focus on contract development and forecasting.
What You Need to Know to Become a Supply Chain Manager
College degrees are required for most professional business positions, and this one is no exception. Your career education should include the following
- Negotiations
- Strategic alliances
- Relationship management
- Cost/price analysis
- Legal aspects of purchasing
- Performance measurements
- New technology/software
- Supplier evaluation
- Electronic commerce
- Contract development
- Strategic planning
- Team building
- Logistics
- Economic forecasting
- Inventory control
- Contract management
- Transportation and traffic
- Distribution
- Benchmarking
According to McGraw-Hill'sPurchasing and Supply Management textbook, The nine major objectives of supply management* are:
1. To provide an uninterrupted flow of materials, supplies and services required to operate the organization
2. Minimize inventory investment and loss
3. Maintain and improve quality
4. Create relationships with competent suppliers
5. Set standards for supplies
6. Get supplies and services at lowest cost
7. Achieve harmonious, productive working relationships with other departments
8. Keep purchasing administrative costs low
9. Improve the organization's competitive position
*Source: Leenders, Michiel R., Fearon, Harold E., Flynn, Anna E., and Johnson, P. Fraser, Purchasing and Supply Management, 12th edition, McGraw-Hill, Boston, 2002
Supply chain management professionals work in virtually every industry - manufacturing or service, governmental, educational or retail. You may be working as a buyer, contract negotiator, inventory manager, import/export goods manager, transportation manager, supplier relations specialist, supplier selection officer, or operations manager. You may focus on warehousing, benchmarking, e-commerce, recycling, technology, or customer relations.
To succeed as a supply chain manager, you need strong verbal and written communication skills, an aptitude for technology, a talent for data analysis and finance, strategic skills, a global perspective, and the ability to maintain good professional relationships.
Career Education in Supply Chain Management
On-Campus and Online College Courses
Online degrees in supply chain management have become increasingly common as busy professionals seek to enhance their resumes without giving up their jobs. Online college classesare available at every level.
Associate's and Bachelor's Degrees in Supply Chain Management
College degrees are now a minimum requirement for entry-level business jobs. An associate's degree in acquisition and contract management can provide the fundamentals and help you get into the workforce as soon as possible (most associate's degrees take two years or less). For advancement in the field, you'll need at least a bachelor's degree. This should provide you with a solid foundation in business principles, including negotiations, ethics, business law and finance, as well as studies of industry issues.
Master's Degrees and MBAs in Supply Chain Management
Master's degrees in supply chain management, procurement and so on are designed for individuals who work in contract administration or procurement in the private, public, or non-profit sectors. These courses provide a foundation for understanding both the strategic and operational aspects of the procurement function. General and specialized management studies are integrated with the required core courses. MBA programs in this field combine a broad business education with the necessary specifics.
Certificates in Supply Chain Management
Online certificates and single courses in supply chain management are designed for professionals who need a faster education route, or require fewer courses to round out their practical experience. Many supply management departments will actively encourage their staff to attend continuing education programs to become more effective and efficient supply managers.
What can you do with a College Major in Supply Chain Management?
Career Specializations within supply chain management
Supply chain management offers a world of employment possibilities, because it is the backbone of so many different kinds of companies. It's important at all levels--from small businesses to Fortune 500 companies--to have reliable supply management professionals to ensure the most efficient, profitable, and competitive operations possible.
Supply chain management is also proving to be more appealing to people beginning their careers or looking for a change. Supply chain managers can focus on designing, auditing, researching, analyzing, budgeting, forecasting, buying or planning functions. There are countless opportunities for a bright, ambitious individual to fit into the supply management field.
The increasing ease of doing business online is having an impact on the supply management profession as markets take on a global scope. Supply managers may be asked to find and evaluate international sources of supply and to integrate and coordinate requirements across the globe, so you may be expected to bring cultural understanding and language skills to your position.
There are a variety of titles and careers in the supply management profession and some organizations will refer to the same job by different names to suit their needs. Here are just a few supply management-related job titles gathered by the Institute for Supply Management's (ISM) Information Center:
- Vice President, Strategic Sourcing
- Buyer/Senior Buyer
- Purchasing Director
- Director, Strategic Planning
- Executive, Special Supplier Relations
- Director of Contracts, Pricing and Procurement
- Purchasing Agent/Analyst/Assistant
- Materials Analyst
- Director, Supply Line Management
- Senior Procurement Specialist
- Director, Contracts and Procurement
- Materials Manager
- Procurement Manager
- Director, Supply Chain Management
- Commodity Manager
- Director of Supplier Relations
- Inventory Manager
- Director of Corporate Materials
- Vice President/Director of Procurement
- Supplier Quality Project Manager
- New Product Procurement Planner
- Vice President, Supply Management
- Traffic Manager
- Director, Worldwide Procurement
- Supplier Management Analyst
- Director of Supplier Quality and Procurement
- Inventory Planner
- Contract Analyst
- Buyer/Planner
- Supply Manager
- Chief Procurement Officer
- Strategic Sourcing Manager
- Supply Chain Manager
In December 2003, Purchasing magazine published the following average salaries for supply management professionals. Issues such as the business climate, your work experience, your chosen industry, your level of education, whether you have certification, and operating budget should be taken into account as you review these.
| Overall average for purchasers |
$67,300 |
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| Average for purchasers with 3 yrs or less experience |
$54,600 |
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| Average for purchasers with BS/BA in business |
$69,000 |
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| Average for purchasers with BS/BA in tech field |
$70,900 |
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| Average for purchasers with C.P.M. certification |
$80,000 |
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| Average for purchasers with an MBA degree |
$91,900 |
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Explore Related Career Pathways
Purchasing Management
Industrial Production Management
Cost Estimating
Budget Analysis
Certification and Licensure
As with most professions, having certification is a universal symbol that shows to everyone your level of achievement and your career commitment. The Certified Purchasing Manager (C.P.M.) designation, established by the Institute for Supply Management, requires professionals to pass the CPM Exam and have five years' purchasing/supply management experience or three years' experience and a bachelor's degree from an accredited institution.
Explore Related Degree Programs
Online Degrees in Supply Chain Management
Operations MBA Degree Programs
Online Degrees in Manufacturing
Online Degreesin Business
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