But an ageing workforce and a shortage of talent are stifling implementations of innovations like predictive analytics, 3D printing and wearable technologies.
There is a “workforce crisis” and a lack of adequate talent, according to a new survey of more than 400 supply chain executives by professional services firm Deloitte and MHI, the international trade association. Business schools report intensified demand for supply chain managers.
An estimated 600,000 manufacturing positions in the US are unfilled for a lack of qualified workers. In addition, between last year and 2018, there will be 1.4 million new jobs in the logistics and supply chain field, according to a seperate study by MHI.
There has been an increase in demand for business students to fill supply chain positions in the past two years, said Sara Williams, MSc careers relationship manager at Cass Business School.
She said that both pure logistics and delivery firms like Khune + Nagel and GIST, as well as companies that rely on supply chains, such as Amazon and Nestlé, are recruiting supply chain managers.
“Supply chain efficiency is becoming an increasingly significant issue for a widening pool of organisations,” she added. The energy and pharma sectors are also hiring in this area.
The talent demand in e-commerce in particular is a reflection of the changes that technology is bringing to retail, according to Conrad Chua, head of MBA careers at Cambridge Judge Business School.
He said that the jobs for MBAs in e-commerce are now in areas like logistics and managing partnerships with third party sellers.
Traditional supply chains will radically change over the next five to 10 years as a result of new technologies. Companies surveyed by Deloitte and MHI expect to invest heavily in new supply chain tech in the next two years, with the top 17% spending over $10 million.
But the lack of suitable talent and the speed of innovation, with consumer expectations rising, are stressing traditional supply chains to “near breaking points”, said George Prest, chief executive of MHI.
He added: “Companies that continue to use traditional supply chain models will struggle to remain competitive and deliver orders that are accurate and on-time.”
Top business schools including USC Marshall, Cranfield SOM and Warwick Business School run supply chain master’s programs to help fill the gap in supply and demand at the management level.
A wave of schools followed suit recently, including Mannheim Business School and C.T Bauer College of Business. The OneMBA, taught by a group of top schools, recently ran a logistics program at European aerospace firm Airbus.
Companies are adopting data analytics, robotics and automation, and sensors and cloud computing to power their supply chains.
Scott Sopher, principal at Deloitte Consulting, believes we are at the “dawn of an innovation” in the material handling industry. He said: “The convergence of big data, faster and cheaper computer power, and the increasing demands of customers will likely accelerate the adoption of innovative products and services.”
The adoption of data and wearable and mobile technologies are only at roughly 20%, but are expected to grow significantly to about 70% over the next three to five years, according to the study.
The use of big data in particular has ramped up quickly, said Arnold Maltz, associate professor at the supply chain department at W.P Carey School of Business. “We have alumni at Amazon looking at these kinds of issues right now,” he added.
Experts say such innovations are about lowering costs but also to gain strategic advantage.
“The potential is huge,” said Kasra Ferdows, professor of global manufacturing at Georgetown McDonough Business School. Technologies have been rolled out as globalization has made supply chains more fragmented, he added.
According to the survey data, 31% of respondents cited the lack of adequate talent to implement and deploy new technologies as a significant barrier to their implementation.
George at MHI said an ageing workforce has contributed to the talent shortage, but that the changing skill-sets needed for jobs in the supply chain is the biggest factor.
He added: “Company leaders should understand the current and near-term uses of technologies like drones and 3D printing, and prepare for significant industry disruption.”
Supply chains have become departments with senior-level management, according to Eugene Spiegle, vice chair of the supply chain management department at Rutgers Business School.
He added that they are also a way to “sustain competitiveness and manage the fast-paced changes caused by both global markets and changing consumer demands”.
Logistics providers including DHL and software companies are particularly active in recruitment of supply chain managers, said Zeynep Flouret, assistant director of the career development centre at INSEAD, a global business school.
“We see many large businesses demanding talent for SCM [supply chain management] roles, as well as tech companies and large NGOs,” she said.
There are also positions available within consultancy firms, said Sara at Cass, such as Bain & Company, Capgemini and Crimson & Co, a specialist supply chain consultancy.