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April 5, 2004
Supply Chain Management Takes Hold at McCombs
by Erica Grieder
In the past 10 years, supply chain management (SCM) has emerged as a compelling new strategy in operations management—or perhaps it would be more accurate to say set of strategies, as SCM comprises a number of activities. And according to Doug Morrice, a professor of management at the McCombs School and director of the school’s Supply Chain Management Consortium, SCM is here for the duration. “I guess that sort of surprises me because sometimes these things have a shelf life and then it’s on to the next thing,” he reflected, “but companies have really grabbed on to supply chain management. It’s holding, and it seems to be growing.”
Morrice recently took some time to talk about supply chain management as a field and its standing at the McCombs School. The process required to produce a consumer good, from raw materials to final product, can sometimes look like a Rube Goldberg device—the number of steps and parties involved result in a system that seems to be maximally inefficient. According to Morrice, a guiding principle of supply chain management is to reduce that chaos by coordinating “physical activities, informational activities, financial activities or any intermingling of those.”
“That’s a broad set of activities,” acknowledged Morrice, “But depending on the organization, I think some companies view it that broadly.”
Largely driving this trend are the increased capabilities of information technology. We tend to take widespread, inexpensive internet access for granted these days, but it is a relatively recent technological development, and has allowed companies to coordinate more activities and systematize more processes than ever before.
“With more sophisticated information technology, companies are able to go outside their old boundaries and connect with their customers, their suppliers, their customers’ customers, their suppliers’ suppliers, and so forth. They can go so much more deeply into the supply chain than they ever could before,” said Morrice.
Adopting supply chain management technology is not necessarily smooth sailing. “Despite the potential benefits supply chain management software can provide,” noted ComputerWorld, in its Apr. 2 coverage of the Supply-Chain World North America 2004 conference in Chicago, “experienced users…said that installing the technology is fraught with challenges, especially when it comes to revamping business processes within companies.”
On the other hand, the fact that so many businesses are adopting supply chain management techniques despite the short-term challenges of revising existing management procedures may be taken as a testament to SCM’s perceived long-term benefits.
Not Just for Managers
Supply chain management first became a hot topic at the McCombs School in the early 1990s. “Proctor & Gamble came to us in 1994 working on some very, I would say, advanced things, with Wal-Mart and other customers,” said Morrice. “As companies go, they were fairly far along by 1994 when they came here. But they wanted to see a program developed here in supply chain management, and that was really the genesis of it.”
A McCombs MBA who plans to pursue a career related to SCM may choose to specialize in Operations Management, a heading that includes courses in supply chain management and strategy as well as operations. “There are certain things in operations management that don’t necessarily just fit all under supply chain management,” explained Morrice. “For example, new product development and innovation—that impacts the supply chain, but I think the issues there are separate.”
It might seem that SCM would interest primarily those MBAs who plan to pursue careers in management at companies such as Dell, Motorola or ConocoPhillips, but Morrice emphasized that courses in supply chain management are of interest to many MBAs beyond those who have a direct interest in the topic. About half of the students taking these courses each semester are students concentrating in finance, marketing or MSIS who still expect that they will need to be familiar with supply chain management in their job.
Knowledge of supply chain management can also, Morrice said, help students who eschew the Fortune 500 route altogether. “People who go directly into these courses probably do gravitate towards larger companies,” he said. “However, there have been cases in the past where I’ve had students who’ve gone through MOOT CORP® [the McCombs School’s international business plan competition] and started their own companies. There are entrepreneurial opportunities, opportunities at smaller companies, and opportunities here in Austin.”
Supply Chain Management Consortium
Two years ago, Morrice oversaw the formation of the Supply Chain Management Consortium.The consortium produces research on the industry and its corporate partners select relevant projects, which students tackle during semester-long practicums. More generally, the consortium seeks to raise awareness of supply chain management at the McCombs School among students, faculty and corporate partners through semiannual roundtables.
So far, Morrice considers the consortium a success, in terms of both facilitating study of the discipline and attracting corporate recruiters. “We’ve had good participation with the consortium companies, such as Dell, Applied Materials, and Motorola,” he said. “And they are very interested in hiring students from our graduate and undergraduate programs.”
This may sound like a lot of activity, but Morrice thinks this is an area in which the McCombs school has room to grow—which is likely, since the new strategic plan calls for the management department to grow in the next five years. “Really,” reflected Morrice, “In my mind, this is just the beginning because we have so much potential to take this supply chain management program a lot further.”
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
