Supply Chain Management: Definition, Jobs, Salary, and More

Written by Coursera Staff • Updated on

Learn what supply chain management is, why it is important, what the job duties are, and the key elements that make an effective supply chain manager.

[Featured Image]:  Supply chain manager,  wearing a black dress and with long black hair, preparing and planning the delivery network for products of the company.

Supply change management aligns product supply with customer demand. As the world becomes more interconnected and manufacturing resources are spread across the globe, supply chain management ensures production remains cost-effective, customers remain happy, and deliveries are consistent.

If you enjoy looking at the bigger picture and have a knack for helping companies run efficiently, you might consider a career in supply chain management.

In this article, you'll learn what supply chain management is, why it's important, and how it works. You'll also explore jobs in the field, learn some of their salary expectations, and find suggested cost-effective courses that can help you get started today.

What is supply chain management?

Supply chain management refers to the coordination and oversight of various activities involved in the production, distribution, and delivery of goods or services from their source to the end consumer. This entails everything from sourcing the raw components for a product to delivering the final result directly to the consumer.

Part of working in supply chain management is figuring out how your company can maximize productivity, sustain production, grow within the market, and provide the most convenient experience for the customer.

Supply chain managers have two key responsibilities:

  1. Ensure that customers can obtain products.

  2. Ensure that the manufacturer can obtain the materials they need to create the product.

The consumer market can be competitive. So, it's important for businesses to make sure their products are in-stock when a consumer wants to purchase something. In addition, if a customer orders an item online and it takes a long time to arrive (or worse — it never arrives), they will be less likely to order from the same company again. 

To make sure that happens, supply chain professionals must source materials, locate manufacturing partners, coordinate delivery services, and offer convenient methods for returns. Having a supply chain that maximizes productivity and efficiency gives the company opportunities to expand and keeps revenue flowing.

Read more: A Look at Product Lifecycle: Management, Tools, Careers

Why is supply chain management important?

Effective supply chain management is important for all companies that distribute goods, services, and products because supply chains can quickly break down and delay production if not managed well. This creates internal stress in the company and a loss of revenue. It can also lead to detrimental customer loss and a lower company reputation. Certain suppliers and manufacturers are particular about the types of companies they work for, so having a solid company reputation with reliable key players will help to secure beneficial supply chain partners.

As a supply chain manager, you are one of the key people responsible for promoting business sustainability and positive experiences for customers. This is essential for the business's productivity and the company's success. Supply chain management plays a key role in staying on top of the market and sustaining a loyal customer base. According to a survey conducted by Deloitte, almost 80 percent of businesses with high-functioning supply chains performed better than their competitors [1]. 

How does supply chain management work?

Supply chain manager responsibilities typically include five critical areas of work: planning, sourcing, organizing, delivering, and managing. Each area has specific tasks for the supply manager.

1. Planning the supply chain network

Before solidifying any contracts with suppliers or putting the product on the market, you carefully plan each “link” in the chain. You want to ensure that the transition between steps will be seamless and that every stakeholder knows their responsibilities. Another aspect of this is efficiency. If one component of the supply chain lags behind the others, it creates a “kink” in the chain and slows the entire production. This can delay the product getting to consumers and create downstream difficulties in production.

2. Sourcing materials

The next component is sourcing the materials needed for the product or service. This involves determining the supplier, figuring out how much of the supply to order, keeping track of the supply, and paying the suppliers.

You also want to ensure your supplier meets the regulations needed to continue producing the product and ensure it is safe for the consumer. To keep product prices in the anticipated range, supply chain managers pay attention to any price changes and keep an eye on the pricing of alternative suppliers. 

3. Organizing manufacturers

The next step is to find the proper manufacturer for your product. This organization, company, or person turns the raw materials into the end product.

Supply chain managers arrange quality testing to ensure each product meets the expected standard, potentially from an outside organization. The manufacturer is in charge of packaging the products and handing them off to the delivery service. In this space, it’s essential to manage communications between material sourcing, manufacturing, and delivery. These three components need an established flow to keep production moving.

4. Delivery of the product

Next is managing the delivery of the product. Supply chain logistics are an essential consideration. Whether you deliver to retailers or the customers’ homes, the delivery service must be reliable and effective. Having damaged products, delayed delivery, or incorrect orders can damage the company's reputation and cause a loss of customers.

5. Managing return services

If a customer is unhappy with the product or would like to exchange it for an alternate one, it is essential to have an effective and convenient return service. This reduces product waste, as other customers can receive the returned items.

Learn more about the importance of supply chain management from experts at Rutgers:

Supply chain management jobs

The modern supply chain is a complex system composed of countless interconnected parts. To make sure it all goes off without a hitch, management professionals across the world perform a variety of logistics, planning, and buying duties. Here are some common jobs you can expect to encounter as you’re exploring a career in the field: 

  • Supply chain manager 

  • Logistics manager

  • Materials manager

  • Buyer planner

  • Sourcing manager

  • Master planner 

  • Master scheduler

Read more: Supply Chain Manager: What They Do and How to Become One

Supply chain management salary

Supply chain managers are essential to ensuring the timely operation of manufacturing and distribution processes around the world. And, they’re well rewarded for their efforts. According to the US Bureau of Labor Statistics (BLS), logisticians earn an average annual salary of $77,030. This is significantly higher than the median wage for all occupations in the country, which the BLS pegs at $45,760 as of May 2021 [2]. 

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Supply chain management responsibilities

Supply chain managers have diverse responsibilities and a wide range of job duties. While the exact job description will vary depending on the company and type of industry in which you work, key elements of a supply chain manager career typically include:

  • Continually integrating new information and data into your company’s supply chain processes.

  • Managing communication between supply chain sectors

  • Protecting and managing supply chain data

  • Reducing human error with strategic planning

  • Planning for future obstacles and developing creating solutions

  • Provide accurate information to company employees

  • Reducing supply chain costs and maximizing revenue

  • Simplifying the supply chain as able

  • Integrating new technologies into supply chain functions

Supply chain management software

Supply chain managers use many types of software to manage different components of the supply chain and keep things running smoothly. In this career, you have the exciting task of finding new and useful technologies to help the company expand. As the product, market, or company grows, you can integrate more advanced software systems to keep track of large volumes of data. Building your technical skills can help you build the knowledge base to manage large projects and add value to your company team.

Automatic Requisition Tracking Management Information System (ARTMIS) is one such platform. Developed by IBM and Chemonics, ARTMIS is a common system that tracks shipments throughout the supply chain. This allows supply chain managers to schedule shipments up to two years in advance and promote long-term coordination of the supply chain elements. 

Another growing use case of supply chain management is integrating artificial intelligence (AI) and machine learning. Platforms such as BASF use these concepts to help supply chain managers make informed decisions, improve current systems, and track progress over time. 

As a society, we are in an exciting era of technological development. As your experience in supply chain management expands, you’ll quickly learn to use your creative and problem-solving skills to design innovative supply chain systems that use new technologies to improve function and efficiency. This creative thinking process serves to help you stay ahead of the competition and keep your organization at the top of the market.

Read more: Supply Chain Analytics: What It Is, Why It Matters, and More

Get started on your career

As the world becomes more interconnected, the need for supply chain management professionals grows even more. If you're interested in a career in supply chain management, consider taking an online specialization through Coursera to gain job-relevant skills today.

In Rutger's Supply Chain Management Specialization, you'll master the fundamentals of the profession, including logistics, operations, planning, sourcing, and strategy. By the end of the program, you'll not only have a certificate to put on your resume and job-relevant skills, but also a richer understanding of the complexities that companies are facing in today's global networked economy.

Article sources

1

Deloitte. “Supply chain leadership Distinctive approaches to innovation, collaboration, and talent alignment, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-cons-supply-chain-leadership-report-040914.pdf.” Accessed April 27, 2023.

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