NC State kicked off classes last week, and as usual our incoming group of MBA students were lined up with projects as part of their entry class into supply chain management, MBA 541. I have been teaching this class, called Supply Chain Relationships, for the last 15 years at NC State.
This class develops major themes and strategies of supply chain relationships. The focus is on establishing a basis for collaboration relationships with supply chain partners through focused supply market intelligence research, relationship assessment and management, negotiation, collaborative contracting, and on-going management of relationships in global supply chains. In this context, relationships may exist between internal functional groups, as well as with suppliers and/or customers. The curriculum emphasizes the importance of collaboration, through the application of practical tools and approaches that drive mutually beneficial outcomes. Students will learn core processes around initial exploration and assessment of supply chain relationships, establishing metrics/ expectations for the relationship, crafting and managing contracts, and sustaining continuous performance improvement in sourcing, logistics and operations. These concepts are based on the assumption that students graduating from the NC State MBA will enter positions where they will be managing relationships from the “supply management” end of the relationship, with less emphasis on the marketing/ sales perspective.
MOTIVATION FOR COURSE DESIGN:
Multiple interviews with executives who recruit MBA students at the Poole College of Management have led me to design this class, based on the key skills and competencies that they tell me they are looking for in our students. First, executives say they want students who have supply chain knowledge, business acumen, and can “speak the language” of SCM. The first part of the class deals with the common elements of strategic supply management, including creating the vision for the organization, organizational roles and structure, and the fundamental elements of the procure-to-pay process. Developing a deep knowledge of supply chain terms, vocabulary, analytical methods, and know-how is of primary importance in this section of the class. To achieve this, students are given assigned readings, but are also assigned specific readings based on their assigned company project. Class participation and discussion of concepts is an important part of the language of SCM. But much of the learning comes through the interface with executive speakers in the classroom, as well as with dialogue with their project sponsors. We will have speakers from John Deere, Excel Logistics, GSK, NSA, and others coming in this semester.
Second, executives say they want students who can perform supply chain analysis and have deep analytical skills. To ensure this is the case, the class’s primary focus is on category strategy development, focusing on developing deep market intelligence, supplier evaluation, identifying appropriate performance metrics for governing the relationship, as well as structuring the relationship based on macroeconomic and industry specific market conditions. Supply chain risk is an important subject in today’s environment, and a set of risk tools is presented and applied. An emphasis on strategic cost modeling and contract price mechanisms is also emphasized. The focus on execution is emphasized through a detailed discussion of negotiation, collaborative cost-based reduction, customer/supplier development, contract management, and conflict resolution. A take-home midterm exam provides students with an opportunity to demonstrate that they can apply these principles, and that you can effectively communicate them in a written memo to be turned in for grading.
Third, executives emphasize that to succeed in internships and entry level jobs, students must have a strong knowledge of cost models, negotiation and contract management. In the latter portion of the class, students will be involved in a comprehensive supply chain computer simulation exercise. Students are assigned to small groups (distributors and manufacturers of a pharmaceutical supply chain), and are required over the course of the semester to develop a relationship and execute a contract with another team. The simulation effectively reflects the profit or loss outcomes of these relationships, and also identifies the participants’ tolerance for risk and the consequences of doing so. Each team will develop a written contract with selected partner(s) that documents the agreement resulting from the negotiation process. The student teams then experience a one year simulated environment, which requires them to think about how to deal with conflict in the supply chain over a period of time, how to manage inventory, meet customer/supplier requirements, and do so profitably. A final presentation reflecting the final outcome of the experience will be made in class.
Finally, executives emphasize that they need people who have practical supply chain project experience. A number of guest speakers will visit the classroom to help infuse this into the curriculum. More importantly, a significant portion of the class requirement will therefore be dedicated to a supply management project with an SCRC partner company. The nature of these projects will vary but they all have a common set of attributes:
- They will require that students work with the partner to convert a vaguely defined problem into a tight project scope document, with project deliverables, due dates, and a final outcome. Bear in mind that the SCRC partner is the “client” in this case, and you need to define the project so it will meet their requirements.
- The project involves primary and secondary research, utilizing a variety of tools and techniques. As such, students are required to develop a report and presentation to the SCRC partner, and will also develop a “gallery walk” board display summarizing the key research outcomes, that will be presented at the SCRC meeting in late April.
An example of the projects to be completed this semester reads like a lineup of problems facing many companies, but are being sponsored by the following companies: John Deere, NACCO, Biogen Idec, GlaxoSmithKline, Quintiles, Bayer Crop Science, Laboratory for Analytic Science, and the General Services Administration.
- Best practices and trends in supply chain logistics that can be applied to a practical setting
- Researching the best approaches for identifying and developing diverse minority suppliers
- Exploring development of vendor management as a service for upstream customers
- Spend analysis for software across a major branch of government
- Identifying optimal approaches for managing leased space for new manufacturing facilities
- Developing best cost models for global manufacturing production processes
- Establishing process models for global aviation manufacturing
These and other projects will surely lead to some interesting insights for this group of bright young minds!