The escalating crisis in global supply chains, ignited by a potent combination of soaring costs and labor shortages, coming on top of the pandemic disruption, is helping to turn the once niche discipline into a theme of growing significance for companies and business schools.
Rising threats are forcing organizations to reorder their supply chains, and prompting business school professors to overhaul MBA curricula to reflect the shifts, and place more emphasis on practice-based teaching with real companies. Covid, along with trade tensions, cyber-attacks and climate risks from heatwaves to hurricanes, are exposing companies to increasingly costly disruptions.
In turn, this has prompted a rethink on the ‘just in time’ production on which the global economy has come to depend. Instead, there is a renewed focus on regionalization and resilience inside companies, a trend that was building before Covid struck last year.
In response, business school academics are refining their textbooks. “Supply chain management is constantly evolving. Covid-19 or not, the courses constantly need to be updated, be it about new technologies, resilience or reshoring,” says Svenja Sommer, associate professors of information systems and operations management at HEC Paris business school.
That being said, the pandemic disruption and factory shutdowns have created more awareness and more understanding among students on why supply chain management and resilience are important. “Before Covid, the awareness was often limited to supply chain managers and less so to general management,” says Sommer. “Now, the subject has gained a broader platform and audience.”
More demand for MBAs with supply chain skills
Rudolf Leuschner, associate professor of supply chain management at Rutgers Business School in New Jersey, agrees that Covid has raised the profile of global supply chains, mostly because of failures. He says that the field had been neglected and the dominant strategies had grown rigid, so a fresh focus was long overdue.
“The lack of suitable literature has been a known topic for decades, but it wasn’t yet bad enough to cause large-scale delays as they do now,” he says. “More companies have realized that they need to become more serious about supply chain talent than before.”
Corporations have started placing more focus on their supply chain managers, who once toiled in relative obscurity before global threats started intensifying. As their status is elevated, the job prospects for MBA students in this once specialist field are increasing.
Rutgers runs a course for working professionals. “A couple of years ago 20-30 percent of students might have been promoted or received a raise while in the program,” says Leuschner. “Now more than half have been promoted or received a raise before graduation. This shows how much demand there is for supply chain management talent.”
MBA students, who might once have focused more on finance, are now keener to explore supply chain management. About 10-20 percent more MBA students are taking supply chain management courses at Rutgers than before Covid. “I think some of that is driven by the strong labor market, but there is also increased interest from professionals in the field,” Leuschner says.
Covid is prompting a new take on supply chains
If interest from students is rising, so is the interest from academics. Rutgers’ curriculum is well-established, but the pandemic forced the school to be more timely in what it teaches. Fresh classes on supply chain resilience were launched with external speakers from companies such as IBM, Siemens, Boeing and Estee Lauder.
For decades, these companies had rapidly expanded supply chains that became longer and leaner with products and components manufactured in numerous countries, driven by cheap mostly Asian labor. The focus is now on “shorter” supply chains and reducing dependency on China, which has become known as the world’s factory, or any other single country.
“Supply chain managers are paying more attention to improving responsiveness and resilience to deal with disruption, in addition to increased focus on cost and quality of service,” says Zhao Xiande, professor of operations and supply chain management, at Shanghai’s China Europe International Business School (CEIBS).
Supply chain management is now considered as more important, he says. “Before Covid it was to a large extent invisible or taken for granted by those not directly involved in it. But we have seen a definite uptick in learning about supply chain management from our students.”
CEIBS held extensive discussions on the supply chain challenges created by Covid, and spent time taking a look at the real world to see its impact and the innovative responses different companies formulated to deal with it. “Even just being able to use Covid 19 to illustrate how supply chain management influences the GDP of a country is a useful lesson,” says Xiande.
The exact implications for those interested in a supply chain-oriented career have yet to become completely clear, but there’s no doubt in his mind that more companies are recruiting supply chain managers than before Covid. “I think this trend looks set to continue for the foreseeable future.”