The Core Argument for Supply Chain Management
AACSB Business Accreditation StandardsIn March 2021, the Ever Given container ship became lodged in the Suez Canal. During the six days it took before the ship was freed, more than 400 other vessels were backed up, awaiting their turns through the canal. If not for a full moon and one of the highest spring tides of the year, which helped lift the ship from the banks, the Ever Given would have remained stuck for much longer.
The delays cost an estimated 9.6 billion USD a day in world trade and forced ports such as Rotterdam to deal with the onslaught of ships that finally made it through. It will take months for world trade to recover from the effects of this event, which raised oil prices, likely exacerbated the worldwide computer chip shortage, and had other negative consequences.
The Ever Given disaster was considered a black swan event—something rare, unpredictable, and potentially dire. Yet global supply chain and operations management (SCOM) challenges occur on a daily basis, and companies must be prepared to deal with them.
Prior to COVID-19, most people were unaware of the complex supply chain systems that produce physical goods; when such systems work well, they go unnoticed. The pandemic has thrust the supply chain into the limelight. This new attention has given business educators an opportunity to discuss these complexities in our classrooms and help students make connections across disciplines. However, the core business curricula at many universities do not include a supply chain or operations management course. We think that needs to change.
Considering the Core
In the past 12 months, nearly every business practice has been reassessed because of the pandemic. That means now is an ideal time to reevaluate the core business curriculum.
Historically, business educators have relied on employers, alumni, and advisory boards to provide input into the curriculum. However, because of slow bureaucratic academic processes, data from such stakeholders often are a year or two old before educators use that information to revamp their courses and core. A dramatic global crisis makes matters worse—slowing our processes even further, and potentially invalidating our pre-crisis stakeholder data.
Regular review of our business core ensures that we are meeting the needs of our stakeholders and preparing our students for their careers. Core review committees not only should review stakeholder data, but also ask what our peers and competitors are doing.
At the University of Central Missouri in Warrensburg, we recently analyzed our AACSB-comparable peers and direct competitors to assess our offerings. We found that four of seven peers require operations management in the core; five of seven competitors require a course that focuses on operations, supply chain management, or a combination of the two.
We also sampled 35 AACSB-accredited institutions in Europe, Asia, South America, Oceania, and Africa, and found only 18 that offered courses in supply chain or operations management. We were not able to determine whether these courses were required in the core. While this was not a truly random sample, we believe it is likely to be representative of the current state of business education.
The fact that many of our peers and competitors do not offer or require courses in supply chain and operations management does not indicate to us that we should question our own inclusion of such courses. In fact, we would argue that recent events demonstrate how critical SCOM is—not just to our school, but to global business education.
Governmental and C-Suite Concerns
One reason SCOM is so important today is that the pandemic made governments increasingly concerned about the lack of domestic production capacity. In March 2021, the European Parliament Committee on International Trade formally examined ways to reshore production back to Europe after the pandemic.
In the U.S., members of the House of Representatives recently sent a letter to the Federal Maritime Commission addressing ongoing logistics challenges. In February 2021, President Joe Biden issued an Executive Order on the Supply Chain and a summary Fact Sheet: Securing America’s Critical Supply Chains.
The pandemic created the impetus for companies and federal agencies to devote more resources to nearshoring and reshoring manufacturing as a way to develop more resilient supply chains.
Concern extends beyond governments. In a Euler Hermes survey published in December 2020, executives in the U.S., the U.K., Italy, France, and Germany indicated their plans to create more resilient supply chains and to begin nearshoring production by moving operations closer to home. A 2020 Deloitte survey of executives reported the same intent.
It is not new for government representatives and business executives to express concern about the risks of relying on foreign suppliers for the majority of their goods. But the pandemic may have created the impetus for companies and federal agencies to devote more resources to nearshoring and reshoring manufacturing as a way to develop more resilient and secure supply chains. This will be no small feat, and it will take time to accomplish.
Engagement, Innovation, Impact
Another reason SCOM courses are valuable is that they provide an opportunity for schools to address many of the AACSB curriculum standards. For instance, Standard 4 specifies that schools should deliver content that is current, relevant, forward-looking, globally oriented, and grounded in emerging technology. SCOM courses, by their very nature, have all these characteristics. SCOM courses also provide schools with opportunities to promote lifelong learning, thought leadership, global perspectives, and societal impact.
Many current events and industry challenges offer excellent learning opportunities in SCOM classes. While the Ever Given disaster provided students with a case study on the interconnectedness of the supply chain, events such as the pandemic and Brexit also demonstrate how SCOM issues impact global business.
SCOM courses also provide the perfect opportunity for students to study a range of critical issues facing society today, such as sustainability, climate change, human rights, and ethics. For example, as human rights groups accuse China of committing racial genocide against the Uighurs, companies have been forced to consider where they source their materials and finished goods. Apple lobbied against a bill to stop forced labor in China at Apple suppliers, including Foxconn factories.
Similarly, Starbucks and Nespresso, the latter owned by Nestlé, were recently caught up in a child labor scandal when it was discovered that children as young as eight worked 40 hours a week on coffee farms in Guatemala. Both organizations have zero tolerance for child labor. However, it is costly and difficult for companies to audit all tiers within an organization’s supply chain. Child labor increased worldwide in 2021 for the first time in 20 years.
Such complex examples enable students to consider the consequences of difficult real-life SCOM decisions that involve cost and ethics trade-offs at every tier of the supply chain. When students understand how SCOM decisions can impact a company’s social responsibility, sustainability, and innovation, they will see that SCOM can be a force for good.
A Shortage in the Field
But even as SCOM issues become more complex, there are fewer supply chain experts to take on the work. Industry observers noted more than five years ago that there was a shortage of supply chain professionals, and the pandemic has only made the problem worse. According to a study released by DHL in 2021, there are three main reasons for the shortage: the current workforce is aging, companies haven’t made an effort to feed the talent pipeline, and potential workers perceive that supply chain jobs lack excitement.
Business schools cannot produce trained supply chain professionals simply by including SCOM courses in the core business curriculum. They must present SCOM in ways that show future business leaders the collaborative, innovative, integrative future focus of this field.
A 2018 article indicated that 37 percent of U.S. jobs were supply chain-related and that the field employed more than 44 million people.
Even if students do not choose to become supply chain professionals, they must gain at least a basic understanding of SCOM issues as they enter the workforce. That’s because they are far more likely than students of a decade ago to be employed by companies that manufacture physical products. A 2018 article in Harvard Business Review indicated that 37 percent of U.S. jobs were supply chain-related and that the field employed more than 44 million people. Furthermore, those jobs had higher than average wages and accounted for a significant portion of innovation in the economy. Schools should make sure that students understand the opportunities that exist in this profession.
Unfortunately, the opportunities are not equally available to everyone. Women in supply chain careers still experience pay and promotion disparity, and the industry continues efforts to deal with supplier diversity issues. Business schools can help address these disparities by including SCOM in their core curricula, which will expose underrepresented groups to this industry early in their professional development.
‘The Most Important Course Right Now’
No matter what majors business students are pursuing, their jobs inevitably will interact with SCOM functions. That’s one reason it’s important for business schools to make SCOM part of the core.
Another reason is that the SCOM profession is made up of people from many different fields. When Chris Opatrny-Yazell, one of the authors of this article, attends events sponsored by supply chain management organizations, she often asks those at her table about their educational backgrounds. She has yet to find an entire table of professionals who earned degrees in supply chain operations or management. There are always attendees who entered the industry from other disciplines.
The field needs people from many backgrounds with diverse kinds of training. Yet, unless they are exposed to the topics and the integrative nature of SCOM, future leaders will not even know about the opportunities they could have in this dynamic industry.
Our belief in the importance of SCOM is echoed by Adam Truesdell, a UCM alum who is the strategic account manager for Gems Sensors. He recently said that a course in SCOM “is an essential part of a solid business education. Looking back 14 years after graduating, I’ve consistently dealt with and managed supply chain issues throughout my career—and I’m not even working directly in a supply chain role. Knowledge of supply chain is more important than ever, especially considering all of the current events affecting material supply continuity—Brexit, trade wars, COVID, and semiconductor shortages/allocation. This course is arguably the most important course a business student should be taking right now.”