Despite common belief, supply chain management (SCM) isn’t just about moving products from point A to B. It’s a complex, multifaceted undertaking that has a profound impact on a business’s bottom line and is integral to consumer satisfaction.
What’s more, SCM – as a process, profession, and general topic – has never been more important than it is right now. The COVID-19 pandemic and its global lockdowns revealed how vital yet fragile the world’s highly interconnected supply chains were.
As a result, the term “supply chain management” found its way into mainstream discourse, highlighting its essential role in all physical-based businesses and cementing its status as a highly sought-after profession.
So, if you’ve ever wondered what supply chain management is and why it’s so critical, read on to gain valuable insights!
What is Supply Chain Management (SCM)?
Supply chain management (SCM) involves overseeing the movement and flow of materials, finished goods, and processes to get products to customers. It encompasses the entire production process, from sourcing raw materials to delivering the final product to the end consumer.
Here are some key aspects of SCM:
- Planning and Managing Resources: Determining metrics, processes, and systems to ensure an efficient and effective supply chain that meets company goals
- Choosing Suppliers: Selecting suppliers to provide the necessary goods and services. Managing relationships with suppliers through ordering, receiving, inventory management, and payment
- Organizing Logistics: Coordinating freight shipments and inventory flows between partners. Using logistics tools for warehouse management, transportation management, and more
- Managing Operations: Overseeing daily supply chain operations including production, quality control, inventory management, and order fulfillment
- Analysis and Optimization: Using data analysis to identify improvements and optimize supply chain performance. For example, reducing costs or minimizing waste
The Importance of Supply Chain Management in Modern Business
In an era where you can order a niche product on Amazon and expect it at your doorstep the next day, it’s easy for the intricacies of supply chain management to go unnoticed.
However, the COVID-19 pandemic thrust SCM into the spotlight. Between 2020 and 2022, we witnessed massive disruptions to supply chains across the globe all while online shopping soared to new heights and the need for the efficient delivery of healthcare supplies had never been more crucial. Ever since the vital role supply chains play in global business has been plain to see.
The Pandemic’s Impact on SCM
The pandemic had two main impacts on SCM
- With nationwide lockdowns in place, online shopping exploded and became a lifeline for many businesses. Accordingly, innovation in e-commerce skyrocketed.
- The pandemic led to significant disruptions in global supply chains, massively affecting the flow of goods and services across borders.
According to a study published in the National Library of Medicine, key supply challenges triggered by the pandemic included:
- Uncertainty in demand
- Inconsistency in supply
- Scarcity of material
- Delay in delivery
- Scarcity of labour
The global economy is still recovering from these challenges today.
The High Bar of Customer Expectations
In today’s digital age, customer expectations are sky-high when it comes to convenience. Being able to purchase almost anything at competitive prices and have it delivered the next day has set a new standard for logistics management.
To meet these expectations, SCM professionals have had to adapt quickly, ensuring that their processes are highly efficient. Because of this, the entire industry is turning to technologies like AI and data analytics to optimize operations.
A recent example, Amazon announced that it is leveraging AI technologies to make order fulfillment 25% faster.
The Double-Edged Sword of Globalization
Globalization has allowed companies to benefit from international supply chains, offering a broader range of products and services. However, the pandemic has equally exposed the vulnerabilities of these interconnected systems.
When borders close, factories shut down, or freight schedules are interrupted, the ripple effects are felt throughout the entire supply chain network.
This effective SCM is a must, especially when considering that 25% of typical corporate supply chains were not screened for risk management as per a recent University of Tennessee study.
To navigate these challenges, companies have been prioritizing their supply chain strategies. Measures often include:
- Diversifying suppliers
- Increasing inventory levels
- Investing in advanced tracking systems.
These strategies aim to prepare businesses for future disruptions and ensure a more agile and responsive supply chain.
How Do Supply Chains Impact Sustainability?
Another reason SCM is so important today has to do with sustainability and climate change.
A sustainable supply chain not only helps in reducing the environmental footprint but also adds value to customers by way of ethical sourcing.
Here are three key points that highlight the importance of establishing sustainable supply chains:
- Risk Mitigation: Sustainable supply chains help mitigate various financial, social, and environmental risks. A study by Harvard Business Review revealed that suppliers, especially those lower in the supply chain, often don’t comply with sustainability standards, posing serious risks.
- New Consumer Demands: Consumers and investors are increasingly demanding sustainable practices in supply chains. According to a 2023 McKinsey study, over the past half-decade, products that have incorporated Environmental, Social, and Governance (ESG) claims have seen an average cumulative growth of 28 percent compared to 20% growth for products not making ESG claims.
Is a Graduate Certificate in SCM Worth It?
To answer this question, let’s draw from an important EY survey titled “How COVID-19 impacted supply chains and what comes next,” which polled over 200 senior-level supply chain executives.
Given the complexities and challenges outlined in the article, as well as these executives’ answers, it’s safe to say a degree in Supply Chain Management (SCM) is a wise choice.
Here are five reasons why an SCM degree is worthwhile today, as supported by the EY study:
- Strategic Importance: The pandemic has elevated the strategic importance of supply chain management. Professionals with specialized knowledge in SCM are crucial for navigating disruptions and ensuring resilience.
- Technological Integration: The increasing role of technologies like AI, analytics, and automation in supply chain operations necessitates a strong educational background to understand and implement these technologies effectively.
- Sustainability Focus: With 80% of companies more focused on environmental and sustainability goals, expertise in sustainable supply chain practices is increasingly valuable.
- Career Advancement: As supply chains become more digital and autonomous, there will be a growing demand for skilled professionals who can manage these sophisticated systems.
- Global Relevance: Supply chain disruptions have global implications. A degree in SCM equips you with the skills to operate in a globally interconnected business environment.
Yorkville University’s BBA with a Specialization in Supply Chain Management
If you’re considering pursuing a career in Supply Chain Management, Yorkville University’s specialized BBA Supply Chain Degree program could be the right fit for you.
Program Overview
Yorkville University’s program has been designed to fast-track students to in-demand SCM roles like logistics coordinator and procurement manager. The curriculum covers key supply chain elements and can be completed in as few as 2.5 years.
Program Highlights
- Practical Focus: Graduate job-ready with the professional skills, knowledge and designation prerequisites that SCM employers value.
- PGWP Eligibility: Many international students apply for a PGWP in Canada after they graduate, which offers a path to permanent residency.
- Experienced Faculty: Learn from highly educated faculty who have recognized credentials such as MBA or PhD degrees.
- Flexibility: Benefit from convenient scheduling and online options.
Interested in more details? Reach out to an Admissions Advisor at any time.
The Future: How Will SCM Evolve?
As we look to the future, Supply Chain Management (SCM) will likely integrate more deeply with technology, making it an even more indispensable part of modern business. Technological advancements like the Internet of Things (IoT), Enterprise Resource Planning (ERP) systems, and advanced analytics are rapidly changing the landscape of SCM, improving visibility across the supply chain and allowing for better management information and more effective decision-making
Emerging Technologies in SCM
Some of the emerging technological trends, tools, and innovations used in supply chain management include:
- Data Science and Analytics: Companies can use data to gain valuable insights and revolutionize supply chain management. Big data brings value and assistance to various areas in SCM, such as quality control, cash flow, real-time deployment, warehouse efficiency, weather patterns, predictive strategies, and inventory, supply, and demand
- Cloud Computing: Cloud-based solutions enhance data storage space, integration, security, and information sharing. Companies can track materials and products, get real-time updates, and inform customers of the status of an order at any point during the end-to-end supply chain
- Advanced SCM Software: As technology advances, supply chain software becomes more complex, allowing companies to stay ahead of mistakes, make modifications to orders, communicate across various media channels, and automate shipping
The Bottom Line
Whether you’re an aspiring supply chain manager, a business owner, or someone interested in the intricacies of how products go from concept to consumer, understanding the importance of SCM is essential.
To recap, here are some of the key takeaways from this blog:
- Supply Chain Management is not just logistics; it’s a complex field that impacts profitability and customer satisfaction.
- Skills in procurement, inventory management, and logistics are crucial for a successful career in SCM.
- Sustainability is becoming increasingly important in supply chain activities.
- SCM professionals are in high demand
- Technological advancements like IoT and Big Data are shaping the future of SCM.
Become a SCM Professional
Ready to take the next step in your career?
Consider enrolling in the Bachelor of Business Administration with a Specialization in Supply Chain Management at Yorkville University.
BBA Supply Chain Graduates are work-ready for positions including warehouse operations specialist, logistics coordinator, and procurement manager in international companies.
Sound interesting? Speak with one of our admissions advisors for more information.
