Taking stock at middle age
The logistics professionals’ organization turns 50 years old next year.
By Chris Dupin
The Council of Supply Chain Management Professionals will be 50 years old next year, a time for the group to “ponder where we have come from and where we are going,” said the group’s President and Chief Executive Officer Rick D. Blasgen, in a recent interview.
As the group hits middle age, Blasgen said supply chain management “is becoming more mainstream. It is more of a core competence function, process, and discipline within progressive companies today.”
That’s “great, not only for the discipline, but the careers of the individuals within it,” he added.
The U.S. economy continues to struggle, but “demand for supply chain professionals continues to increase,” he said. “Supply chain people, by their very nature, are cost-controlling. They focus on efficiency and effectiveness within the supply chain and also make sure a company’s service levels are maintained in tough times.”
While technology, outsourcing of functions like warehousing and trucking to third parties, and governmental deregulation have reduced the need for many positions at manufacturers and retailers, Blasgen said “of late, I have seen companies increasing the size of their logistics and supply chain groups because they are thinking about new ways to integrate with customers or becoming astute about senior or more experienced supply chain strategies.”
CSCMP will hold its annual global conference in Atlanta from Sept. 30 to Oct. 3, an event that conference chairman Brian D. Hancock, president of North America for The Martin-Brower Co., expects will attract 4,000 to 5,000 attendees from a wide swath of the supply chain community — professionals working at manufacturers, retailers, and third party logistics providers, in addition to academics and students.
It’s a jam-packed event, with more than 150 educational sessions arranged into two dozen tracks that include everything from focuses on industry verticals and issues such as contingency planning and sustainability to technologies such as RFID, to recruiting and developing talent.
Blasgen said CSCMP always aims to have academics and consultants who speak at its conferences give specific examples of how their research or innovations have been applied.
Increasingly, logistics professionals are being asked to help companies meet environmental goals, Hancock said, and the conference will have a number of sessions focused on various aspects of this issue including sessions about reverse logistics, and “greening logistics” through the use of natural gas.
T. Boone Pickens, the oilman-turned-wind energy and LNG evangelist, will be a major session speaker, and there will be presentations on using natural gas to power trucks, including one from Saddle Creek Logistics, whose president Cliff Otto said already has 40 trucks powered with compressed natural gas running out of a Florida distribution center, with more on order.
There will be talks from business leaders such as Arthur Blank, co-founder of Home Depot and owner of the Atlanta Falcons football team, and Shahid Khan, owner of auto parts maker Flex-N-Gate and rival NFL team the Jacksonville Jaguars.
Another highlight is a competition among companies for CSCMP’s “supply chain innovation award.” Contestants have submitted papers detailing their projects, but conference attendees will also be able to hear the presentations from each of the companies.
Born In 1963. CSCMP was formed in 1963 as the National Council of Physical Distribution Management, and then changed its name to the Council of Logistics Management in 1985 before assuming its current moniker in 2005.
To long-time logistics professionals like Cliff Lynch, the organization has been an important partner in their careers.
An independent supply chain consultant today, Lynch joined the Quaker Oats traffic department in 1958, and was working at his company’s Chicago headquarters when the council was first created.
“We learned from each other, whether competitors or not. We didn’t sit around talking about prices, but we talked about how to do things better for the industry,” he said, recalling those early years.
The discussions “provided a lot of ammunition for professionals to use internally to raise their credibility within their own companies,” and traffic departments were able to expand their circle of responsibility adding warehousing, inventory management, and customer service, he said.
Corporate attitudes toward logistics have evolved, he said, from once viewing them as huge cost centers “that didn’t bring anything to the party” to recognition that they provide service and “service is as important as our product. That is what has helped logistics managers push ahead within their own companies.”
Otto said it wasn’t until the 1980s when “Walmart and other large retailers were able to prove that effective, interconnected supply chain management can be a competitive advantage… that most CEOs and COOs recognized that supply chain could be a competitive advantage.”
He said salaries for supply chain executives have improved as the professional has become more valued and today, he noted, the “chief supply chain officer” is viewed at many firms as being just as important as the chiefs of information, finance, and marketing.
Lynch also credited deregulation for making supply chain professionals more mobile within companies.
He explained when rates were regulated by the Interstate Commerce Commission, for example, traffic departments were filled by men and women with arcane knowledge.
“You had to check and recheck rates. The ICC was holding hearings daily. You could not take someone from the personnel department and put them in the job. The learning curve was very steep,” he said.
“It was sort of a Catch-22. We had skills that nobody else in the company had, but they were skills that nobody else probably wanted. We were kind of stereotyped, and you had to break loose from that and get them to believe just because I’m a good traffic clerk doesn’t mean I can’t manage inventories or work customer service,” he added.
The decision for many companies to begin manufacturing in China or other countries to take advantage of lower labor costs also made logistics even more important due to longer transit times and the heightened risk to the overall company if something went wrong.
Lynch said logistics professionals got more technology to work with in the 1970s and industry began to focus on increasing productivity and reducing inventories. Subsequently, the profession grew in stature.
Lynch will be one of about two dozen old hands in the logistics profession that will gather in November in Florida to discuss the history of their profession in a forum sponsored by CSCMP.
It’s an invitation only-event, but Blasgen said the plan is to videotape the discussions for future viewing at events such as the CSCMP’s annual meeting in 2013.
He said the event will include discussions between the pioneers and young professionals, some even born after transportation deregulation.
That focus on younger members is natural at CSCMP which views education and research among its primary goals, and Hancock said the conference opens with a full day of educator discussions and student recruitment.
Youthful Hands. Blasgen, a former Kraft executive, said students “are much better prepared than ever before as they come out of university programs, but there is no replacement for experience – they have to work in and around the supply chain learning manufacturing scheduling, transportation, inventory management, and customer service. As you build your career you are also building your interpersonal leadership and managerial skills.”
Otto, of Saddle Creek, said “the level of professionalism of people who work in the supply chain arena is night and day, compared to when I first started working.
“The academic world has embraced supply chain,” he said, estimating when he got his degree in logistics in the early 1970s that there were perhaps 10 significant programs in the United States. Today, he said there are “hundreds, if not thousands.”
The fact that college graduates entering the industry already have grounding in logistics means their early training can be focused on how to become effective managers — a key skill, Otto said.
Blasgen said CSCMP has responded in the past year to a desire by members for continuing education and created what he explained is a “modern global end-to-end supply chain certification.”
There are three different levels to the “SCPro” certification. First, students take a test that shows they have mastered knowledge in eight different supply chain areas and how they are connected to each other and larger companies and customers. He said CSCMP is now developing a level-two certification that will be case study-oriented and a third level in which students will be responsible for a large supply chain initiative on the job that will be evaluated by a mentor in the company and CSCMP.
“We want to be an organization that you go to for learning and education throughout your career,” Blasgen said.