What's Behind the Buzz?

New survey results underscore key reasons for the intensifying focus on supply chain management.

By Bud LaLonde -- Supply Chain Management Review, 1/1/2001

Few in the business community would dispute the buzz that has been building steadily around the term "supply chain." And although we have not yet begun to use supply chain as a verb, there is ample evidence that a new business lexicon is forming before our very eyes. Speeches and seminars, new publications, intricate multicolor diagrams illustrating the flow of goods and information, and, of course, a shifting paradigm or two pepper an emerging body of supply chain work.

These developments logically lead to the question, "Where is all of this stuff coming from?" A simple answer might be that one source is the fertile minds of consultants, ever eager to explore new avenues for practice development. Certainly another source is the legions of bright young academics eager to push the envelope of new knowledge and capitalize on publishing opportunities. Although both of these sources undoubtedly are making an impact, much of the supply chain buzz is actually being generated by the practitioners themselves as they seek new sources of potential competitive advantage.

Each year, The Ohio State University conducts a mail survey of the soldiers in the trenches—those executives responsible for logistics and supply chain activities at their companies. Our survey focuses on organizational relationships, process responsibilities, demographics, and opinions on future directions for the profession. The target survey population is drawn from the membership list of the Council of Logistics Management's (CLM) and for a few years now has included respondents with the words "supply chain" in their titles. Although we do not position our effort as a super-scientific survey, we do think that it offers some insight into general trends and points to some future directions. In interpreting the results, however, the reader should keep in mind that the responses include all the bias of the unique CLM membership.

As we look into that future, though, it remains unclear who in the organization will emerge as the chief supply chain executive. Candidates could include functional executives from logistics, marketing, operations, finance, or even IT. Or they could include executives who are not from any specific functional area. Furthermore, leadership solutions could be different for different industries or for companies in different stages in their corporate life cycle. But whoever ends up directing the integration of the supply chain will most likely view the challenge through the prism of his or her individual background and experience.

Key Survey Findings

Now, having covered the most important caveats, let us view some of the early returns from our most recent survey. Exhibit 1 breaks down respondent background by experience base. The most striking finding here is the short tenure of the supply chain executives in their current positions. Another telling finding is the length of time the respondents have been working in the field—approximately 15 to 20 years of logistics experience were reported by the supply chain managers, directors, and vice presidents. (It would be interesting to compare the same demographics for those executives who came to their current supply chain positions via a functional path other than logistics.)

Another part of the survey asked the respondents an important forward-looking question: "What factors will affect the growth and development of the logistics/supply chain function over the next decade?" Because the survey was completed in the late summer of 2000, the period covered by the question would be the first decade of this century. Exhibit 2 displays the results from the 22 supply chain executives who responded to this question. More than 85 percent of them identified e-business/e-commerce, supply chain integration, or international logistics as one of the three most important drivers for the 21^st century. Though these specific factors are probably not all that surprising in themselves, the unanimity of the responses is noteworthy.

Another question in our survey was designed to probe for what might be termed learning needs of these "newly minted" (at least in terms of their time in their current position) supply chain executives. The question was phrased as follows: "If you could return to school to attend a customized learning course for 90 days, what would you study?" The responses are presented in Exhibit 3.

The differences between the responses in Exhibit 2 and those in Exhibit 3 are revealing. Asked what factors were important for the future, the executives rated information-technology applications relatively low on the list and financial issues lower still (in the "All Others" category). Yet when asked what they would study if they could go back to the classroom, the respondents put IT and finance near the top, just behind e-commerce. It could well be that the executives realize that to master the new world of e-commerce they need a solid grounding in these two key knowledge areas.

The Early Lessons Learned

Admittedly, our survey is a small and somewhat biased sample. Nonetheless, the findings contain some important messages.

First, the supply chain position is a new cog in the overall operation of the company. The roles and responsibilities of the executives in these jobs are still being defined. (In fact, it will probably take the better part of this decade before any clear consensus emerges on the definition of a "supply chain executive.") Second, it appears that professionals now working in logistics and supply chain management envision a wired future with electronic commerce and information-technology applications shaping both operations and strategy. Third, the primary performance yardstick going forward will be the supply chain's contribution to the company's financial performance.

Perhaps the message behind all of the findings is that the supply chain buzz is not going to diminish anytime soon. For those of us working in this field, that's good news.

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Author Information

Bernard J. "Bud" LaLonde is professor emeritus of logistics at The Ohio State University.

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