What should we teach our students?

Shams Rahman

Logistics and supply chain management is no longer just a discipline or an area of management: in today’s competitive environment it is the way of running a business. Martin Christopher defines supply chain management as ‘the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole’. The definition highlights the fact that supply chain managers face challenges of managing the flow of product, service and information through the entire supply chain. Thus the skills required by supply chain managers to face up to these challenges are no longer restricted to the understanding of how to perform inventory analysis or how to reduce cost of distribution.

Despite some recent developments, logistics management curricula seem to have the following main shortcomings:

• Lack of relevance to business.

• Lack of practical and professional skills development.

• Poor research capabilities.

These shortcomings point at needs for teaching skills of greater market relevance in logistics/supply chain management education. We can identify the following reasons why logistics and supply chain education needs to be upgraded and make curricula more relevant to business requirements:

• Globalisation of business enabled by the rapid development of information and computer technology (ICT) and intelligent transportation systems (ITS).

• Adoption of process-orientation to supply chain management as a competitive strategy. This is in line with Michael Porter’s value chain concept and Hammer and Champy’s business process reengineering principles.

• Incorporation and integration of concepts and content from other disciplines such as marketing and operations into logistics. Some examples are;

• Direct marketing/shipment strategy. Dell Computer is a good example of the adoption of such a strategy.

• Postponement and customisation strategy. Hewlett-Packard is well known for developing and adopting such a strategy.

• Development of research capabilities beyond the traditional logistics such as marketing, economics and social sciences.

D.J. Closs has warned that one ‘… of the major challenges to management in the next decade is the scarcity of trained supply chain managers. To meet these challenges, substantial change in logistics and supply chain education is necessary’. Recent publications on logistics and supply chain education and skill development programs highlight the fact that both researchers and professional logistics organisations have taken the logistics education issue seriously. Recent research into logistics and supply chain education has focused on three broadly categories:

• Skills that need to be developed.

• Modes of delivery of logistics education program.

• Difficulties in developing and delivering the programs.

Lancioni identified several barriers to the development and introduction of logistics programs, which include lack of trained faculty to teach logistics, and lack of support from the business community. Several authors have suggested methods for effective delivery of logistics education programs. For instance, Grant shared his experience of the use of block-mode teaching formats instead of the regular format in delivering a logistics course. RMIT University in Australia delivers its graduate logistics management courses in block mode. This method of delivery is highly flexible and has been proved to be beneficial to graduate students. RMIT logistics and supply chain courses are delivered using case studies, simulations, research projects and lectures. Recently, experts in the field have identified these approaches as the preferred teaching approaches for the graduate students. The purpose of this study is to identify the logistics skills required by current and future logistics and supply chain managers based on graduate logistics students’ perceptions.

Selection and categorisation of logistics skills

If supply chain management is considered as the management of upstream and downstream relationships with suppliers and customers, then logistics and supply chain managers require a broad knowledge and know-how to manage the interrelated functions of logistics systems. Aron has suggested that logistics managers must have a supply chain mindset, and develop cross-functional skills along with team orientation, people and technological skills. Minahan suggested that for efficient and effective running of supply chains, it is important that logistics managers acquire skills across all functional areas and across organisations, be team players and become expert in ICT.

One of the earliest surveys conducted to ascertain skills required by the logistics managers was performed by Murphy and Poist. In this survey they used three sets of skills: business skills, logistics skills and management skills. Business ethics was found to be the top-rated business skill, whereas, personal integrity was found to be of great importance amongst management skills. Razzaque and Sirat used the same three categories of skills to identify the knowledge and skills perceived as important by Asian logisticians in performing their tasks efficiently. Logistics management skills such as transportation, traffic/transport management, and an ability to plan were rated most highly in business skill, logistics skill, and management skill categories respectively. Gibson identified four categories of logistics skills. These are people, analytical, communication, and ICT skills.

A survey conducted amongst logistics managers in Ireland found logistics and supply chain management, information technology and computing, warehouse management, distribution and transport management, and negotiations as the key competencies in logistics. It highlighted the importance of personal skills, such as assertiveness, passion, and personal presentation. Other suggested skills include the ability to negotiate, creativity, networking skill, and awareness of organisational culture.

Environmental issues are becoming an increasingly important aspect of logistics. Many world class companies have realised that reverse logistics practices can be used to gain competitive advantage, and at the same time, can achieve sustainable development. Studies by Goldsby and Stank, and Rahman demonstrated the positive relationships between world-class logistics performance and environmentally responsible logistics practices. Previous studies did not include the skill items related to logistics and the environment. In this study we incorporated skill areas such as reverse logistics, salvage and scrap disposal, returned goods handling, awareness of environmental issues, and ISO 14000 standards.

Based on these studies and other relevant literature on logistics and supply chain management, a list with 61 logistics skills was developed. Three experts (academics) in the field of logistics and supply chain management were then invited to make an assessment and to select a set of logistics skills relevant to current and future business environments from the list of skills identified in this study. A set of 43 skills was suggested by these experts, who then grouped these skills to create four higher level skill-categories. These are logistics awareness (LA) skill-category, logistics analytical (LAN) skill-category, logistics information technology (LIT) skill-category, and environmental awareness (EA) skill-category.

Table 1 shows that twenty two, eleven, five and five skill items belong to LA, LAN, LIT and EA skill categories respectively.

Survey design

Following the literature review and based on the opinion of three experts, a logistics skills survey was designed with forty three skill items. The respondents were chosen from among the Master of Logistics Management students based on the following criteria:

• Students who have completed at least four core courses of the Master of Logistics Program. At the time of survey, the following four courses were considered the core courses within the curricula: Logistics Management / Logistics Systems / Strategy and Supply Chain Management / International Logistics.

• Students who have at least four years of work experience in management positions and of which minimum two years experience working for an aspect of logistics operations and systems.

A total of 73 students participated in the study, of which 58 per cent were male and 42 per cent were female. The average age of the respondents was about 29 years. The average work experience of the respondents was six years and the average work experience in the area of logistics was about three years. Approximately one-fifth of the respondents had previously taken a course in logistics.

The respondents were asked to rate the importance of 43 specific skill items on a scale from 0 (none) to 9 (very high). In this study, the word ‘importance’ refers to how important are the skills to perform logistics functions efficiently as perceived by graduate students.

Survey results

The results of the survey are shown in Figure 1. to Figure 5. It presents the skill items ranked in terms of the mean overall importance assigned to them by respondents (mean scores on a Likert scale ranking from 0 ‘not important at all’ to 9 ‘very important’. Figure 1 shows the top ten skills in terms of mean importance ratings. These skills are team orientation, management of inventory, supply chain awareness, ability to see the ‘big picture’, supply chain cost, distribution planning, demand forecasting, integration of information flow and systems internally, cross-functional coordination, and integration of information flow and systems externally. Given the greater emphasis on the technical aspects of the logistics in the program, it is not surprising to see the analytical skills such as distribution planning, inventory management, and demand forecasting within the top ten skill lists. It is also important to note that the respondents appreciated the soft skills of logistics management such as cross-functional coordination, supply chain awareness, ability to see the ‘big picture’.

LA (logistics awareness skill) category assessment

Figure 2. shows that the top five skills in logistics awareness (LA) category as viewed by the respondents are team orientation (mean = 7.96), supply chain concept (mean = 7.69), ability to see ‘Big Picture’ (mean = 7.63), supply chain cost (mean = 7.48), and integration of information flow internally (mean = 7.34). The least important skill is perceived ‘knowledge of the latest technology’ (mean = 6.45). However, the mean importance score of all the skills within LA-category is higher on the 9-point scale, i.e., mean is higher than 5.00.

LAN (logistics analytical skill) category assessment

Within the logistics analytical (LAN) category, respondents viewed ‘inventory management’ skill (mean = 7.93) as the most important skill (Figure 3). This is followed by ‘distribution planning’ (mean = 7.41) and ‘demand forecasting’ skill (mean = 7.35). The least important skill perceived is ‘transportation regulation’ (mean = 5.89).

LIT (logistics information technology skill) category assessment

Five skills belong to the logistics information technology (LIT) category. Respondents viewed the ‘statistical analysis’ skill (mean = 6.59) as the most important skill within the LIT-competency, followed by the ‘computer programming’ skill (mean = 6.20) (Figure 4). The mean importance score of all the skills within this category is higher than the mean of the scale (i.e., mean is higher than 5.00).

EA (environmental awareness skill) category assessment

Respondents considered the skill regarding ‘reverse logistics’ (mean = 6.89) as the most important logistics skill within the environmental awareness (EA) skill-category. Knowledge in ‘environmental issues in logistics’ (mean = 6.65) and improvement in ‘return goods handling’ (mean = 6.25) are also perceived to be very important (see Figure 5).

The results indicate that all individual skills are highly rated with regards to their importance. The findings also show that both soft skills such as ‘team orientation’, ‘ability to see big picture’, and hard skills such as ‘inventory management, ‘demand forecasting are important for logistics and supply chain managers.

Two skills, such as ‘reverse logistics’ and ‘environmental issues in logistics’, which belong to the EA category, are also rated highly. Environmental issues in logistics in general, and reverse logistics in particular, are becoming challenging areas for the corporate world. On one hand, environmental-related laws and legislation are forcing companies to be responsible for their wastes and on the other hand, waste disposal costs are increasing rapidly. As a result of depleted landfill and incineration capacities, the cost of landfill activities has increased by manyfold and is on the rise. Considering this evolving business environment, many world-class companies have realised that reverse logistics practices, combined with environmentally-focused logistics practices, could be used to gain competitive advantage.

Companies such as Xerox, Hewlett-Packard, Eastman Kodak, and Sears have successfully implemented reuse, remanufacturing and recycling programs. These initiatives not only have reduced waste and its adverse effect on environment, but have also lowered operating costs and improved profitability and the public image of these companies. Thus environmentally focused logistics practices have important environmental dimensions, as well as dimensions relating to value reclamation. The effective implementation of environmentally-focused logistics practices does not prelude achieving one goal at the expense of the other. Thus it is imperative that the future logistics and supply chain managers are trained in the areas of reverse logistics, and environmental issues such as closed-loop remanufacturing, life cycle analysis, product take-back policies.

Future research

Further research could be conducted among the logistics and supply chain managers and compare the results with the findings of this study.

This study did not include skills related to security issues in supply chains. Since September 11, 2001, issues relating to security have become critical in supply chains, particularly in the management of global supply chains. Working knowledge of new security measures such as Customs and Trade Partnership Against Terrorism (CTPAT),

Container Security Initiatives (CSI), and 24-hour Manifest Rules have become essential. Awareness and knowledge of these skills needs to be included in the future study.

Shams Rahman is the director of the Logistics and Supply Chain Program at the School of Management, RMIT University. Prior to joining RMIT University, Shams worked at other universities in Australia, UK and Thailand. He also held visiting fellowship at the Virginia Tech and University of Exeter. Please contact Shams at shams.rahman@rmit.edu.au for more information or if you would like to receive the full paper including detailed references.

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