Thursday, September 15, 2011

Supply Chain Management: The Next Big Thing?

Hiring Is Strong For Supply-Chain Managers And Salaries Are Rising. No Surprise That It's An Increasingly Popular MBA Option

Sarah DiPietro is a bargain hunter. The 21-year-old Lansing (Mich.) native says she analyzes all her purchasing possibilities in search of the best deals. So when it came time to narrow down her general business focus at Michigan State University's Broad College of Business, she gravitated toward the one undergraduate business major that would allow her to indulge her inner haggler: supply chain management.

Supply chain management—the acquisition of parts and raw materials, from purchasing to delivery—is not one of the classic B-school majors, for either undergraduates or MBAs. But job openings, comfortable salaries, and the prospect for advancement have caused the academic community to take notice, with more students majoring in the subject and more programs offering courses and concentrations in it. With such companies as H.J. Heinz (HNZ) and AnnTaylor Stores (ANN) creating C-level supply chain positions in the past few years, more students are seeing career possibilities in the major.

"Businesses don't compete; supply chains compete," says William Verdini, an associate professor and chairman of the Supply Chain Management Dept. at Arizona State University's Carey School of Business. "Now, supply chain officers are getting in on the strategic decisions that are being made."


Many of the current supply chain managers are transplants from other parts of their companies, with no formal schooling in the discipline, says Verdini. But a wave of interest in supply chain management at colleges all over the country will change that. Leigh University's College of Business and Economics is reporting the most undergraduate SCM majors in the program's 10-year history. One of the major's required courses, Supply and Cost Management, ended up turning students away when it was capped at 45 students last semester. The course's previous enrollment high, in 2007, was 27 students. SCM has even piqued the interest of accounting students to the point that North Carolina State University's Poole College of Management is exploring the possibility of establishing a supply chain concentration within its undergraduate accounting program.

The number of freshman supply chain majors at the Carey School has doubled since the 2007-08 academic year. This year, there were 211 senior majors and 18 freshman majors.

According to the Association to Advance Collegiate Schools of Business (AACSB), the number of undergraduate SCM programs has increased 25 percent since 2006. Almost half that jump happened during the 2009-10 school year.


Why the surge in interest? For one, supply chain jobs are available out there. According to a survey by the National Association of Colleges & Employers, only 45.4 percent of business administration majors and 46.9 percent of accounting majors from the Class of 2010 job applicants received at least one offer. At Carey, 64 percent of undergraduate supply chain majors surveyed who graduated in December 2009 and May 2010 reported having a job at graduation.

Supply chain management majors and MBAs are in demand. Carey reports a 100 percent placement rate for the supply chain MBAs who graduated in May, compared with 75 percent for marketing students. This year, more than 40 companies recruited Carey MBA grads specifically for supply chain jobs, and the biyearly SCM career fairs at Penn State University's Smeal College of Business attract more than 60 different employers.

Salaries are another draw. The Institute for Supply Chain Management's 2011 survey shows that the average salary for supply chain management professionals is $103,664, up from $98,200 a year earlier. The average entry-level professional supply management salary is about $49,500, but the average salary of those with five or fewer years of experience is $83,689, up from $72,908 in 2010, an increase of nearly 15 percent.

Those were some of the reasons that drew DiPietro to the field. She is spending the summer interning in Minnesota at 3M (MMM), the maker of Scotch tape and Post-its. "Everything has to come from somewhere, and someone has to organize it," she says. And as long as they do, the world will need supply chain managers to make it happen.

Thanks to Victoria Taylor / Bloomberg L.P. / Businessweek


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