Every product we ever buy goes on a long journey before it arrives in our hands. The journey begins from the point where the raw materials (which the product is made out of) are extracted, and the journey ends when the customer pays for the product.
This journey never consists of one simple step, i.e. straight from extraction to consumption. Instead, a series of different steps have to be carried out. These steps often include: procurement, transport in, processing and production, storage, transport out, and then finally the sale!
This is called the ‘supply chain’. This tricky, little commercial adventure needs to be monitored and managed throughout the entire process to make sure that everything is done quickly and efficiently. This is where careers in supply chain, procurement and distribution management come in.
Why is it important? What does it involve?
Some career opportunities involve managing the entirety of the supply chain process, whilst others focus on specific areas of the supply chain, i.e. managing the procurement stage or the distribution activity.
Generally. though, people who work in these careers play an essential part in making sure the right product gets to the right customer, at the right time, in the right place, in the right condition, in the right quantity and at the right cost. It’s all about managing the individual parts of the supply chain, and coordinating the different links in the chain to make sure that the whole process runs smoothly, quickly and cost-effectively.
Without this lot, consumers would never get the quality products or services that meet their demands. For instance, if the supply chain was not managed effectively, the milk you bought from a shop might have gone off by the time you got it home. Delays and mistakes somewhere along the supply chain would mean that it took too long to get the milk from the cow’s udder to the bottle, and that’s why it turned sour.
Supply chain people are essential cogs in the production wheel – they simultaneously keep the business-end happy and the customers smiling.
Supply chain management doesn’t only affect commercial organisations. It can play a fantastically important role in making public services more efficient. Indeed, supply chain managers are vital to the NHS, international aid operations and the army.
Break it down for me a little bit!
Supply chain managers have a big task on their hands. These guys plan and manage all the different activities within the supply chain, including: sourcing, procurement, transport, storage and distribution. Consequently, to follow this career path you are going to need incredible organisational and communication skills. It’s all about coordinating the different links in the chain.
These managers collaborate with the various suppliers, third party service providers and customers, and make sure that their activities and business processes are integrated and consistent with each other. They may even introduce the same I.T. systems into all of the constituent organisations in the chain. This is an effective method of streamlining their interaction with one another.
People in these careers liaise with all the organisations in the supply chain, and also help to build relationships between the different suppliers and customers. This enhanced level of cooperation is vital to improving the fluidity of the various operations.
Supply chain managers need a good understanding of budgets, as they are also responsible for monitoring and managing the flow of money between suppliers. They also need to have excellent decision-making skills, as they are responsible for making important contract, production, inventory and transportation decisions.
They also tend to undertake administration tasks to help facilitate their planning and managerial responsibilities, such as monitoring financial data and analysing detailed logistics reports.
Understandably, people who work in procurement management careers focus their efforts on the procurement part of the supply chain. These guys are in charge of purchasing the right resources at the right time, in the right quantity, and at the right price. These careers are truly meant for decision makers. If the resources they procure are not fit for purpose then it can have devastating consequences on the whole supply chain.
Procurement managers need to have excellent commercial awareness and a head for figures. Especially during times of budget cuts and economic downturn, these guys need to use their expert cost-benefit analysis skills to maximise their procurement budgets to best effect.
The procurement management remit often involves the use of tendering processes. This has nothing to do with using a big hammer to make pieces of meat nice and tender! This is about bidding processes. Procurement managers use this tendering process to drive down costs on the resources or services they are purchasing.
Many different suppliers might offer the same service. However, if they want to get the business opportunity, they are going to have to provide an efficient service which is also competitive in terms of price. Procurement managers are thus in charge of facilitating a bidding war, and then picking the most efficient and cost effective supplier to do the job or provide the resources.
Simple? Not quite. Procurement decision processes are lengthy and complicated, so managers need to gather information, build up a network of contacts, conduct supplier background checks, obtain references, negotiate and ensure that suppliers deliver on time.
Distribution managers are obviously in charge of managing the distribution stage of the supply chain, including packaging, inventory, storage and outgoing transport operations. In a similar way to supply chain and procurement managers, these guys need to facilitate the final steps of the logistics activity.
This involves promoting inter-organisation communication, monitoring costs and transactions, and generally ensuring that the right products are distributed at the right time, to the right people, in the right quantity. Distribution managers don’t normally manage the supply of goods directly to the consumer. Instead, they tend to circulate them to a range of resellers (i.e. retail outlets) who then sell the products directly to the customers. Job done!
To get into these kinds of careers, candidates need to have strong commercial awareness, excellent organisational skills, the ability to communicate at all levels and a head for figures. Sure, these careers can be stressful, but incredibly rewarding if everything goes according to plan. Think you could keep a cool head with all that responsibility? If you answered with an assertive “yes!”, rather than a shrug, then you may be able to manage a career in supply chain, procurement and distribution.