Logistics, SCM moves up the MBA, Masters value chain

A logistics and supply chain MBA or Masters is gaining traction thanks to the success stories created by retail giants like Amazon, Starbucks, IKEA, Walmart, Target thanks to their hyper-efficient logistics and supply chain operations in the last two decades.

MBA, logistics and supply chain, Amazon, Starbucks, IKEA, Walmart, Target, Supply Chain Management, e-commerce, retail, manufacturing, hospitality, aviation, FMCG

Moving things along the world efficiently and in a timely manner, has never been more critical than it is today. From being just another business function, supply chain and logistics management have slowly moved up to the top of the pile of systems that enable a company to operate successfully in a highly competitive modern-day work environment. In fact, Supply Chain Management (SCM) and logistics encompass a company’s entire product or service lifecycle from development right up to sales, making it a valuable subject to learn and master.

This doubled with the recent boom in the e-commerce, retail, manufacturing, hospitality, aviation, and FMCG sectors has ensured a large scope for job opportunities across sectors for a graduate of SCM.The pandemic has further brought into sharp focus the centrality of logistics and supply chains in a world filled with uncertainty.

With a large requirement of trained professionals needed to power this widespread industry,there has been a spate of colleges and institutions across the world offering a mainstream MBA or a Masters in Supply Chain Management (SCM), which is about the management of the flow of goods and services alongwith PG diplomas, certified short-term courses and distance MBAs.

Shift to specialised MBA
From hiring candidates with general business administration or MBA, there is a shift among the industry stakeholders for a preference to hiring people who have industry-specific knowledge and an MBA in Logistics and Supply Chain Management.

“In the past, logistics companies hired experts to work in silos but nowadays logistics has become a transversal profession with director level roles being global decision-makers in some companies. Companies are now demanding as well - the knowledge in finance for supply chain management, contracts, decision making, and leadership. The targeted competencies for a professional career in SC included in our programme include: leadership and teamwork, analytical thinking, data mastering, change-agent skills and receptivity to change, business capabilities as well as integrated (end-to-end) supply chain perspective,” says Marta Romero, the International Másters Director - ZLOG Director of MIT-Zaragoza International Logistics Programme. The Masters of Engineering in Logistics and Supply Chain Management (ZLOG) is a 10-month long ME programme conducted by Zaragoza Logistics Center (ZLC), a research and educational institute affiliated with the Massachusetts Institute of Technology(MIT) and the University of Zaragoza, Spain.

Companies are now demanding knowledge in finance for supply chain management, contracts, decision making, and leadership.

Marta Romero, MIT-Zaragoza International Logistics Programme

While MBA education in SCM has been around for more than two decades in India under the umbrella of operations, as specialised MBA’s began to become more popular - many premier institutions like Indian Institute of Management (IIM) Udaipur began offering mainstream MBA in SCM and logistics.

“The one-year full-time programme in Global Supply Chain Management at IIM-Udaipur was started in 2013 and the 2020-21 batch was the eighth batch to graduate. At that time supply chain was one component of general management programmes and only some short-duration certificate programmes were available that focus on the supply chain. There were very few options for a full-time programme in Supply Chain Management especially for candidates with prior work experience. This gave birth to our one-year full-time programme in Global Supply Chain Management (GSCM). We plan to increase the batch size to between 50 and 55 from the current strength of 37 students. There are no plans to make this into a two-year programme,” said R. Chandrashekhar, Head, Centre for Global Supply Chain Management, IIM-Udaipur about the programme.

“We realize that the managers of today need to be comfortable with data and we, therefore, offer courses in analytics both as core subjects and electives”

R. Chandrashekhar, IIM-Udaipur

Back to basics
A few standard subjects in the MBA may include business communications, global supply chain management, world-class manufacturing, principles of management, operations and material management, legal framework and business, lean supply chain management, planning for logistics, EXIM process documentation, supply chain analytics, human resource development and financial and marketing management to name a few.

So what are some of the fundamentals or building blocks of a competitive SCM and logistics MBA or Masters programme? Globally recognised scholar in the area of healthcare supply chains and author Prashant Yadav, who is currently the Senior Fellow at the Center for Global Development and an Affiliate Professor of Technology and Operations at INSEAD said, “A curriculum to train supply chain managers should focus on improving core competencies in key areas such as inventory management, network design, contracting, forecasting, while at the same time equipping the students with skills in incentive alignment, new business models, and new technology-driven tools for the supply chain. Creating the right balance between these areas is key. To help an organization’s supply chain focus on building long-term value instead of solving day-to-day challenges, we need future managers who have a moral compass that focuses on enhancing the societal value created by the supply chain. Their training should include components that train and test them for this. Supply chain education should be T-shaped -- strong depth in core fundamentals of supply chain management, along with good knowledge of the vertical sector (healthcare, semiconductor, etc).”

Yadav adds, “The fundamentals of supply chain management have not changed in any way. It is a profession that was built on operations research and economics. Those two will remain the guiding posts for the profession in the future too.”

Supply chain management and role of government’ would be an elective course which could augment existing programmes.

Prashant Yadav, Center for Global Development

Many institutions have now moved beyond the realm of academics and also added live SCM projects, case studies to work on, certifications, and international exposure trips as part of their entire MBA offerings.

Nick Vyas, who is the executive director of the Kendrick Global Supply Chain Institute at the USC Marshall School of Business in the US and an operations management scholar told The STAT Trade Times, “The USC Marshall Master of Science in Global Supply Chain Management (MS in GSCM) focuses on six essential learning elements to help prepare our students for the future of global supply chain excellence including top-tier academics, to give students a complete understanding of subjects like strategic procurement, outsourcing, and logistics and distribution, unmatched access to industry, live projects, moving well beyond case studies to help students develop and discover solutions to challenging supply chain issues, STEM eligibility, fulfilling the requirements of a Designated Degree Programme according to the US Department of Homeland Security, Certifications, including Lean Six Sigma and lastly experiential trips – as soon as opportunities for international travel fully return!”

Everything we do as a programme and an institute will have some “hybrid” component to it – that is, some in person and some virtual”

Nick Vyas, USC Marshall School of Business

Changing gears
An MBA education is most effective when it is most relevant to the industry it serves and the same holds true for SCM and logistics MBA. Experts agree that there is a need for the lessons learned by the industry during the pandemic to be integrated into the current SCM and logistics education.

Highlighting the need for studying humanitarian logistics and healthcare supply chain in modern MBA’s, Prashant Yadav says, “The pandemic has been a somber reminder that the EIR model for disease transmission is as important for business leaders to know/understand as the BlackScholes formula or the Modigliani–Miller theorem (i.e. corporate finance fundamentals). Another part that has been a strong realization is the role of government in all aspects of logistics and supply chain management. Supply chain pedagogy needs to incorporate modules to help future supply chain managers internalize and learn how to work in environments and contexts where the government is an important partner, funder, customer, and regulator.”

Yadav adds, “‘Supply chain management and role of government’ would be an elective course which could augment existing programmes. ‘Supply chain management and sustainability' is another area where course offerings are fewer.”

Marta Romero lists digital transformation and data mastering, innovation, collaboration, and sustainability as important subjects that are crucial to the current SCM pedagogy. Highlighting the need for robust academic partnerships, Marta further added, “During the pandemic, MIT Global Scale students were able to attend sessions online on supply chain disruption, the impact of Covid-19 and the future of globalization and markets… probably to last in time. This format allowed reaching out to senior executives in retail and pharma among other sectors who were key during the pandemic. Also, more and more companies through our academic partnership do bring in challenges related to sustainability, and how to face e-commerce without cannibalizing convenience stores for instance.”

The role of technology and big data and analytics in the SCM field has grown and many varsities are rushing to integrate these into the SCM pedagogy. Nick Vyas avers, “The MS in the GSCM Programme focuses on topics like strategic procurement, outsourcing, logistics and distribution, the role of information technology in managing global supply chains and how these impact the process of developing new products. In addition, we aim to provide the students with a framework that integrates different topics and an understanding of the trade-offs and relationships between these topics.”

Meanwhile, R Chandrashekhar of IIM-Udaipur echoes the sentiment and adds, “Organizations are investing heavily in technology to effectively manage their supply chains and this has been accelerated by the pandemic. In addition to a core course in Digital Supply Chain Management, we have also incorporated the role of technology in other core supply chain subjects such as logistics, strategic sourcing, and procurement, etc. We also realize that the managers of today need to be comfortable with data and we, therefore, offer courses in analytics both as core subjects and electives. All our courses are augmented through guest sessions delivered by supply chain experts from industry. We have consciously gone down this road whereby our students understand supply chain both in theory and in practice.”

Industry exposure
Governments and industry alike globally have acknowledged the tremendous need for professionals and mid-level workers in the sector and have helped flag courses, sponsor projects, and give endowments in the wake of this demand.

“Industry is, of course, an essential partner in our programme and in the institute. Our dean at Marshall, Geoff Garrett, refers to business education as a “three-legged stool” that balances great research, the best teaching, and quality engagement with industry to provide the best outcomes for our students. Whether it is Carl Mount from Starbucks, who serves as Chairman of the institute, or our deep connection to the leadership of the Port of Los Angeles and the Port of Long Beach, the access to industry shared by our faculty and our students continues to be a vital part of the program,” says Vyas.

Academic partnerships, guest speakers, and access to industry leaders are some other avenues that varsities across the world are actively exploring to up the industry quotient of their management programs. “We (at ZLC) have on the one hand multinationals (firms) that adhere to the ZAP programme (Zaragoza Academic Partnership). This programme allows companies to sponsor students’ thesis projects. It is an initiative to enhance applied research and bring industry-academia relationships closer together in the field of supply chain management. Each year students are required to complete thesis projects and many of them work with our partner companies on challenging and innovative research projects. We also have speakers from various multinational (companies) and different business units in SC come to talk to our students, either alumni or industry experts and we also count on the student’s efforts (women in SC and SC Committees) to bring in speakers for masterclasses or presentations on their companies and specific supply chain roles,” avers Marta Romero.

She adds that another way of having close ties with industry is, “By being in close touch with companies and learning about their needs through our partners and alumni, as members of the MIT Global Scale Network and also by attending educational and professional fairs.”

On IIM-Udaipur’s industry engagement, R Chandrashekhar adds, “The Centre for Supply Chain Management which facilitates this programme (GSCM) is guided by an advisory board that is constituted of eminent industry experts from the supply chain space. Ensuring that the course curriculum is aligned to the expectations of the industry is a constant endeavor and we take inputs from the Advisory Board members as well as other experts in this field who are involved with the institute and the programme in some way.”

Placements - a case of plenty
With retail, e-commerce, and logistics sectors exploding worldwide, experts agree that there seem to be a lot of jobs for supply chain professionals at all levels who can begin contributing from day one. Romero adds, “A big percentage of our graduates work in the pharma sector but also in consumer goods, chemical, 3PL, consulting, really across the board. The conditions given they are placed across the globe vary a lot but the ROI is huge and their salaries increased exponentially after the programme.”

Meanwhile in India, with the manufacturing, auto, pharma, retail, e-commerce, and IT industries taking wings in the past few decades, there has been a spurt in jobs in the logistics and supply chain sector with almost every company that is into these domains hiring top professionals exclusively to manage the warehousing, logistics and supply chain component.

Chandrashekhar adds, “IIM-Udaipur has a campus placement programme for the students of GSCM. The students elect a placement committee that works in coordination with the placement office of the institute. The placement record of this programme is quite impressive in that, in most years, all the students have been placed before leaving campus. In fact, the entire 2020-21 batch was placed about a month before the convocation in spite of it being a pandemic year. The companies that come for placement include some big names from manufacturing, e-commerce, consulting, core logistics and other supply chain services providers and IT solutions providers. The median annual salary of the last batch was in the range of Rs. 19.50 lakhs (about USD26,000) and the average increase was more than 2 times the last drawn salary of the students.”

The hybrid MBA
While the world order was in a way upended and disrupted by the pandemic, it also changed the way education was imparted. Vyas says, “The reality is that going forward, everything we do as a programme and an institute will have some “hybrid” component to it – that is, some in person and some virtual. We just accomplished this with great success at our 9th Annual Global Supply Chain Excellence Summit, the first offered in a hybrid format. At the same time, the virtual piece cannot be just looking at videos on a laptop for three hours. There must be a real effort to make that content engaging.”

Vyas adds, “One of the benefits we have is a deep connection to industry experts – the people students often most want to hear from when it comes to real-world challenges and solutions – and a virtual format provides even greater access. Speakers no longer have to come to campus or even be local in Los Angeles. The whole notion of the ‘brick-and-mortar’ educational model needs to be challenged in the way we did with the retail model. Regardless of how the subject is taught, educational institutions must take into account the progress of globalization, faster cycles of change, digitization, and the need to optimize every stage of supply chains.”

So does that mean the end of the brick and mortar educational model or the beginnings of a hybrid model that can cut through academic silos of the pre-pandemic past?

Romero bats for strategic alliances as she says, “Definitely, a strategic alliance is key as are networking opportunities which allows flexibility and agility when making changes to the curriculum.”

To put things in perspective, in European universities, the course fee for an MBA or a Masters programme in SCM and other courses ranges from 5000 to over 50,000 Euros a year. While in American varsities and B-schools, a full-time supply chain management degree could have a duration of anywhere from 9 months to 2 years and the cost of pursuing the same could range from 26,000 to 80,000 in USD including tuition and programme fees. An MBA or a Masters in India could cost upto Rs 25 lakhs (33,743 in USD) for a full time programme, while the course fees for the premier institutes namely the IIMs range from Rs 9- 23 lakhs (from 12,000 to 31,000 in USD) respectively.

This article was originally published in Logistics Update Africa' November - December 2021 issue.