Increasingly complex economic relationships, greater use of technology, and higher customer demands mean that supply chain management positions are developing into real jobs of the future. But what exactly does a supply chain manager do? In this article, we provide extensive insights into the job profile – from duties to academic pathways and salary expectations!
What is supply chain management, simply explained?
Supply chain management (SCM) affects the entire organization, as it attempts to make the complete process of corporate value creation, from the procurement of raw materials through production to the sale of a finished product or service, as effective and efficient as possible.
In many respects, SCM means the process-related unification of logistics, procurement, marketing and sales. The goal is to improve the supply chain from an economic and timing perspective by sharing information about demand and inventory levels, building relationships and trust, and seeking to minimize and manage supply chain risks. By having producers (original equipment manufacturers), suppliers, and customers work together in more transparent systems, the intended benefits can be achieved.
Job profile: What does a supply chain manager do?
In reality, supply chain managers are often assigned tasks that actually fall within the scope of logistics or purchasing. The most important tasks of a supply chain manager are to plan, coordinate and optimize medium- or long-term supply processes with the help of information from product development, marketing and the procurement markets. The aim is to manage the supply chain as efficiently and effectively as possible. In contrast to classic logistics and purchasing, whose tasks relate to just one part of the supply chain and are often of a short-term and tactical nature, supply chain management deals with the entire value chain in a strategic and long-term manner. As a result, supply chain managers work across departments and often at the interface between IT and logistics.
Due to changing value creation approaches, such as a focus on core competencies, a simple tactical purchasing department is no longer sufficient. Supply chain management must be more actively involved in shaping the corporate strategy process. The competitive advantages created by an efficient and effective supply chain department reflect to some extent the core duties of a supply chain manager:
- Preparation of market analyses and, based on these, purchasing strategies (in some cases even participation in the overall corporate strategy)
- Optimization of resources and processes, including digitalization and Industry 4.0
- Negotiation of contracts
- Initiation and management of long-term customer and supplier relationships
- Management of A-parts suppliers
- Minimization of business risks by securing production factors in the medium and long term
- Involvement in product and/or service development
Skills and requirements: What makes a good supply chain manager?
The requirements for a supply chain manager with the range of tasks described above are very broad. In order to analyze complex processes, read out data records, track down problems and ultimately improve processes, people in this profession should have a strong analytical mindset and an understanding of IT and finance. Since supply chain managers have a classic interface function and work with various departments and employees both within and across companies, organizational skills, teamwork and communication skills are also required. Due to globalization, the company’s contacts also extend abroad, which is why supply chain managers should feel comfortable on the international stage and have an awareness of the challenges arising from geopolitical developments. Finally, supply chain managers should be self-confident and master the basics of negotiation in order to enter into new contracts with suppliers.
Academics requirements: How to become a supply chain manager?
There is no predetermined academic pathway for the profession of supply chain manager. However, it is recommended to pursue a degree in economics or industrial engineering paired with appropriate internships in the areas of purchasing, logistics and supply chain management.
Munich Business School is one of the few universities in Germany to offer a bachelor’s program in International Business with a focus on Supply Chain Management. In the fifth and sixth semesters, students of the SCM specialization learn how to design flows of goods and services so that they arrive at the end customers at the right time, at the right cost, in the right quantity and with the defined quality, and meet their expectations.
In order to join a company in supply chain management or strategic purchasing, applicants should have practical experience from study projects, internships or a working student position. Companies also appreciate candidates who have written a practice-oriented bachelor’s or master’s thesis with a focus on supply chain management.
Career prospects: Is there demand for supply chain managers?
The challenges many companies are facing – geopolitical problems, allocation of components, modules and semi-finished products, and rising energy prices – have once again highlighted the importance of good employees in the areas of supply chain management, purchasing and logistics in recent years. The career opportunities for applicants and employees in these areas are therefore excellent.
Supply chain managers are sought in almost all industries and companies, both nationally and internationally. Job and career prospects are therefore just as good at the classic large companies such as Siemens, BMW, Infineon, Huawei or Airbus as they are in the supply industry. Companies worth mentioning here include Webasto, Knorr-Bremse and Hirschvogel. Hidden champions and/or family-owned companies, such as DELO, VEIT Maschinenbau or Hilti, are sometimes overlooked as employers, especially by international students, but are also extremely attractive.
Salary: How much do supply chain managers earn?
Salaries for supply chain managers vary greatly, depending on the industry, size of the company, or individual experience of the employee. Gehalt.de indicates an average range of €48,000 to €90,000 as annual gross salary in Germany. Read in this article about how the different factors influence the salary.
While in the past starting salaries for employees in purchasing or supply chain management were often lower than in other functions such as finance, accounting or engineering, this is no longer the case. Salaries for SCM employees in many industries have not only caught up with salaries in other functions, but have often surpassed them.
For bachelor’s graduates with little or no work experience, starting salaries at most German companies range from €45,000 to €55,000. As already pointed out above, practical experience in SCM is key, meaning that more experienced supply chain managers earn between €55,000 and €80,000. The salaries of supply chain managers in management positions can even reach a range of €80,000 to €110,000.