Here are the 4 Biggest Misconceptions About Supply Chain

August 17, 2016




Supply Chain is a field that’s still often under-the-radar with the general public. And when people have heard of the function, it’s common for there to be misunderstandings about what the field actually does. The complex value chain that brings products and services to market is more vital than ever to companies looking to compete in the global economy, but its value – both as a career to work in, and its value to business – is still opaque to many.

So as part of our advocacy of the Supply Chain field in general, we put together this quick list of common misconceptions about Supply Chain with the goal of clearing them up for our readers – be they hiring managers looking to expand their Supply Chain function or candidates wondering what the field’s all about.

Misconception #1: Supply Chain is Logistics.

As we’ve written about, there’s a persistent misconception that Supply Chain is just a fancy word for a company’s Logistics function – Logistics being the part of the company that arranges for the physical transportation, customs clearance and warehousing of a company’s products. In fact, modern Supply Management encompasses Logistics, but it’s much broader: it also deals with Procurement, Strategic Sourcing, Demand and Supply Planning, eCommerce, and a whole host of concerns about how products come to market. It involves consideration of commodity prices, labour disruptions, sustainability, weather, supplier selection, data, seasonality, and many other issues that affect a company’s competitiveness.

Misconception #2: It’s a boring field to work in.

Many Supply Chain or Procurement professionals have encountered this perception when they tell someone at a barbecue or dinner party what they do for a living. “Supply Chain,” says the fellow attendee, “isn’t that kind of boring?” If they’ve heard of the field at all! This perception is rooted in the field’s transactional past – before it became the sophisticated and high-stakes function that’s often driving whether a company sinks or swims in today’s globalized world. These days, while it’s still more common for people to “fall into” Supply Chain than choose it as a career at the outset (although that’s changing), Supply Chain managers report high job satisfaction, and it’s no wonder: the field offers a diverse set of challenges, a fast pace, exposure to cutting edge technology and international travel. It has a real impact. Oh, and it’s well-compensated. More needs to be done to clear up this misconception.

Misconception #3: It’s all technical.

Another common misconception is that Supply Chain is an extremely technical field – in short, a field for math geeks. And it’s true that capability with software (such as SAP, JDA, and excel) and the ability to draw insights from vast amounts of data are very important to Supply Chain’s value, the field is actually about much more than the technical elements. So-called “soft skills” are even more important than the “hard skills,” and they’re what separates leaders in the field from the rest. The ability to communicate and present Supply Chain insights to corporate leadership is crucial, as is the ability to build relationships with internal and external stakeholders.

Misconception #4: It’s only about cost savings.

There’s a perception that Supply Chain managers (and people specialized in Procurement and Logistics) only offer cost savings. It’s another perception rooted in the field’s more transactional past, and another misconception that needs to change post haste. In fact, many companies now take that aspect of Supply Chain for granted because truly great Supply Chain professionals deliver so much more. First of all, they lead companies in terms of sustainability and corporate social responsibility. But more important to the bottom line, they can contribute to increased revenue as well – by enabling customization of products, reducing delivery lead times, finding local suppliers for expansions into new markets, and accelerating product launches as well.

The main takeaway here is that every company has some understanding of Supply Chain, but often that limited understanding leaves huge amounts of value and revenue on the table. Supply Chain delivers a lot more than people commonly think, both as a career, and as a function that makes companies more competitive.

Have any more common misconceptions to add? Let us know in the comments! logo_icon

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