Winning in Logistics
Written by Lari Fanland
Military Advanced Education - MAE 2007 Volume: 2 Issue: 3 (August)
The Iraq war, with its demand for dependable global supply lines, is producing a large corps within the U.S. military of skilled managers of logistics. These logistical wizards increasingly are able to translate those skills to advance their careers either within the military or to enter the corporate world with a new job title: supply chain manager.
Why the interest in supply chain management? Studies have found that companies that excel in supply-chain operations perform better in almost every financial measure of success. Companies might have coped with being inefficient when they were producing items using local materials to sell across town. Today, when companies’ suppliers, customers, and competitors are likely to be global, such inefficiency can be fatal.
Leading companies, such as Dell, Intel, Procter & Gamble and Coca-Cola, have recognized that in a global marketplace, supply chain management is an increasingly important component of their business. These and other forward-thinking, innovative firms are effectively managing their supply chains and are looking for top talent with the education and expertise to join their teams. The U.S. military is increasingly looking for people with these skills, as the Iraq war emphasizes the essential nature of reliable global supply chains.
Many service men and women with an interest in supply chain management have gravitated to the Wisconsin M.B.A. program offered by the University of Wisconsin- Madison School of Business. Wisconsin is unusual in that it offers both an M.B.A. focused on supply chain management and extensive two-and three-day executive education programs on supply chain issues.
What is supply chain management and why might it be a particularly attractive career path for current or former service men and women? What is supply chain management? At its core, supply chain management is about coordinating and optimizing the flow of materials and information toward satisfying a customer need at a price the customer is willing to pay. Organizations (whether a battalion or IBM) can create competitive advantage by integrating suppliers, manufacturers, distribution centers, business partners and customers. New and innovative products are produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing system-wide costs and exceeding customer expectations.
“Some organizations have large, structured supply chains, like the military and automotive supply chains. This is akin to mounting and coordinating a large and structured attack,” said James Rappold. Rappold is an assistant professor with the University of Wisconsin- Madison and coordinates its extensive executive education offerings relating to supply chain. “Some organizations have small, evolving supply chains with little formal structure, like biotechnology firms. This is like guerilla warfare, requiring constant adaptation. Still other organizations are collections of multiple supply chains of varying levels of development.”
Rappold believes that every supply chain suffers from common performance problems. “An effective supply chain leader has to evaluate each component of his or her supply chain, often with partial and incomplete information,” he says. Among the challenges supply chain managers face is the fact that each part of an organization may speak a different “language.”
• Marketing and sales speaks in terms of market share, volume and fill rates.
• Manufacturing speaks in terms of productivity and absorption.
• Logistics speaks in terms of lowest unit warehousing and transportation costs.
• Procurement speaks in terms of purchase price variance.
• Information systems departments speak in bytes and XML.
• Finance speaks in dollars, rates of return and SOX compliance.
“An effective supply chain leader needs to be multilingual and know how to balance, quantify and communicate tradeoffs to a complex organization,” Rappold said. Many service people pursue advanced education in supply chain management to advance within the military. Others aim to acquire an M.B.A. in supply chain management to help them make the transition from military logistics officer to corporate supply chain manager. Both types have turned to the Wisconsin’s Grainger Center for Supply Chain Management to earn an M.B.A. in supply chain management.
Rob B. Johnson was commissioned as an Infantry Lieutenant from the United States Military Academy at West Point in 1991 and later attended the U.S. Army Ranger School. As an Infantry Platoon Leader, he helped quell riots in Los Angeles. In 1993, he helped redeploy a 500-person organization from Panama and ensured the personal accountability of more than $14 million in government property. In 1994, he served as primary logistics and training officer for a 120-person organization and deployed them from Colorado to Cuba within three days of notification. While in Cuba during the 1994 immigration crisis, he learned about noncommercial supply chain issues firsthand.
When food for 10,000 Cuban immigrants was not being delivered on time or in the proper quantities, he had to follow the supply chain to the root of the broken link to prevent a riot that might have jeopardized the safety of his soldiers.
In the late 1990s, Johnson served in Alaska as a logistics and budget officer for a 3,500-person organization with a $12 million annual budget.
“As an Infantry Captain in the late 1990s, I was looking for a change of career but really didn’t know where to begin,” Johnson recalled. My time in the Army left me with great managerial and leadership skills but I didn’t understand the applicable context in the new world of business. In fact, it was only during my grad school application interview that I first heard the phrase ‘supply chain.’ After further discussion, I came to appreciate that, just like an Army leader, a supply chain manager is responsible for everything to get the job done. Nothing is ‘not my job.’ This was right up my alley.”
Johnson decided to go back to school to earn his M.B.A. in supply chain management at the University of Wisconsin.
“During my two years in the Grainger Center, I was part of a small, solid cohort of students looking out for each other,” Johnson recalls. “Since graduation, I’ve held positions in purchasing, management consulting, manufacturing/distribution, information technology, marketing and operations. These doors were open to me not just because of my years of handson leadership experience and a refusal to accept ‘can’t,’ but also due to my broadbased supply chain management education.”
Not everyone who pursues advanced education in supply chain is aiming for the corporate world, of course. Take Shane Strohl, who also was attracted to Grainger Center. Strohl entered the Wisconsin M.B.A. program in fall 2006 after 14 years as a supply officer with the U.S. Navy, including stints with the Pacific Submarine Force headquarters in Pearl Harbor, the submarine USS Asheville, and the helicopter assault ship USS Iwo Jima. Upon completing his sea tour in July 2006, Strohl was awarded a full-tuition scholarship from the U.S. Navy to earn an M.B.A. He remains an active-duty lieutenant commander in the U.S. Navy.
Strohl is halfway through the two-year M.B.A. program at Wisconsin and when he graduates in May 2008 plans to put what he learns to use to benefit the Navy. “Already, I have gained best business practices in the areas of procurement, channel support, accounting, financial management, operations and warehousing,” Strohl says.
“My tasking from the Navy is to take these business practices back to the fleet and employ them to improve current Navy programs and policy.”
Verda Blythe, who directs the center, believes many military professionals are attracted to supply chain management because, “It’s a natural fit, thanks to the experience they’ve gained in the military in key supply chain management functions such as procurement and sourcing, operations, and logistics. “The leadership and management skills they’ve gained in the military are in high demand and are easily transferable to business.” ♦