IJOPM Supply chain professionals...skills and competencies of their supply chain professionals, their use of appropriate technologies and the challenges they perceive in the future.

Supply chain professionalsA study of competencies, use of technologies,

and future challenges

Daniel Prajogo and Amrik SohalDepartment of Management, Monash University, Melbourne, Australia

Abstract

Purpose – This paper aims to report the results of a study focusing on the competencies and skills ofsupply chain managers, their use of supply chain technologies and future challenges in supply chainmanagement (SCM), including issues relating to globalisation, environment, and supply chain integration.

Design/methodology/approach – The study uses a questionnaire survey to collect data fromAustralian supply chain professionals. A total of 921 surveys were mailed out and 148 responses werereceived, giving a response rate of 16 per cent.

Findings – Communication and teamwork is identified as the most important competencies forsuccessful supply chain integration. Knowledge of a broad range of technologies is considered essential;however, their use remains somewhat low. Environmental issues relating to the management of scarceresources are identified as having a significant impact on supply chain strategies.

Research limitations/implications – The study adds to the literature on the above issues byproviding empirical findings from an Australian context which can be used for comparativeassessment against similar studies from other countries.

Practical implications – The study provides insights for firms, industry associations, andgovernments by identifying the competencies and skills that are required to be developed for supplychain professionals. The findings also indicate the level of awareness and the extent of the adoption ofinformation and communication technologies as well as the perceptions of supply chain professionalson the future challenges of SCM.

Originality/value – The study is timely given the highly dynamic environment that businessescurrently operate in and the challenges that it presents to supply chain professionals.

Keywords Supply chain technologies, Australia, Competencies/skills, Future challenges,Supply chain professionals

Paper type Research paper

1. IntroductionSupply chain management (SCM) has emerged as one of the primary factors indetermining the competitiveness of organisations. In today’s competitive environment,businesses have realised that the competition is no longer dependent solely on thecapabilities of individual businesses but on the capability of a tightly integrated supplychain. SCM has experienced significant and rapid changes in recent years. Thesechanges are driven by several factors including business environment, globalisation,technological advances particularly internet-based systems, and increased demands fordelivering superior operational performance.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0144-3577.htm

The authors would like to thank GS1 Australia for their support in conducting this study and toMs Christine Alemao and Ms Sanaz Bayati for providing research assistance during variousstages of this project. The authors also thank the Guest editors for this special issue for theirvaluable feedback and recommendations on the earlier version of the manuscript.

Received 15 August 2010Revised 30 May 201130 March 2012Accepted 30 April 2012

International Journal of Operations &Production ManagementVol. 33 No. 11/12, 2013pp. 1532-1554q Emerald Group Publishing Limited0144-3577DOI 10.1108/IJOPM-08-2010-0228

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From a business point of view, the changes required by supply chain members are tomove from a reactive mode to a planning mode, from risk avoidance to risk management,from hoarding information to sharing information, from transactional relationships tomanagerial relationships, from bureaucratic behaviour to creative behaviour, and teamdecision-making involving all supply chain members (Giunipero et al., 2005). A numberof authors have highlighted the need for supply chain professionals to transform from amore transactional and clerical task orientation to a planning and strategic taskorientation (Johnson et al., 1998; Carr et al., 2000; Faes et al., 2001; Giunipero et al., 2006).Giunipero et al. (2006) identified five major trends in SCM:

(1) strategic relationship management with suppliers;

(2) strategic cost reduction;

(3) integrated systems and collaboration;

(4) greater focus on total cost in supplier selection; and

(5) strategic versus tactical purchasing orientation.

The trends and changes highlighted above require businesses to regularly assess theskills and competencies of their supply chain professionals, their use of appropriatetechnologies and the challenges they perceive in the future. This paper reports theresults of an Australian survey examining these three areas. Specifically, the paperaddresses the following three questions:

(1) What are the competencies and skills of supply chain professionals toeffectively manage global supply chains?

(2) What is the extent of usage of supply chain technologies?

(3) What are the future challenges perceived by supply chain professionals?

While these three issues appear to be independent to each other, we believe that theyrepresent the key issues managing supply chains. Therefore, it is necessary fororganisations to understand these three issues as interrelated and should be addressed inan integrative manner. The recent study by Ngai et al. (2011) based on three case studiesshow that the combination of management competencies, IT integration, and supplychain integration have strong and positive effect on supply chain agility. We believethat agility, as one of the future competitive strategies, would require firms to havecompetent supply chain professionals as well as effective supply chain technologies.We did not set out to propose/test a model or a framework in this study but to examinethe current status of the profession with respect to the three questions presented above.

The remainder of this paper is structured as follows. Section 2 reviews relevantliterature relating to the three questions presented above. Section 3 describes theresearch methodology. Section 4 presents the results and compares our finding toearlier research. Section 5 presents the conclusions.

2. Review of relevant literature2.1 Supply chain competencies and skillsLike any executives of the future, supply chain professionals should be more flexible teamworkers with leadership abilities (Faes et al., 2001) and possess good communicationsskills to be able to communicate across functions and organisations in order to promote

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and coordinate SCM, as well as to manage the upward and downward communicationwithin the organisation (Carr et al., 2000; Gammelgaard and Larson, 2001).

Over the past decade, a number of authors have discussed the skills requirement ofsupply chain managers, including purchasing/buying professionals. Giunipero et al.(2006) highlight five key skills required by supply chain professionals for a morestrategic management approach. These are:

(1) team building skills – leadership, decision-making, influencing, andcompromising;

(2) strategic planning skills – project scoping, goal-setting, and execution;

(3) communication skills – presentation, public speaking, listening and writing;

(4) technical skills – web-enabled research and sourcing analysis; and

(5) broader financial skills – cost accounting and making the business case.

Van Hoek et al. (2002) examined 300 European companies to determine the importantfactors for reconfiguring the supply chain. The availability of qualified people was themost important factor, even more than physical infrastructure and information andcommunication structure. In other words the “people dimension” has criticalimportance for success of SCM and design.

Murphy and Poist (1991, 2007) conducted longitudinal studies and investigated83 skills in three groups: business skills, logistics skills and management skills. Thefindings of their surveys of executive search firms indicated that management skills werethe most important, followed by logistics skills and business skills. Both studiessuggested that “logisticians should be managers first and logisticians second”. Theranking of some skills in business and management skills groups changed over the16-year period but there were no significant changes in ranking of skills in logistics skillsset. In business skill group, SCM was the most important business skill in 2007 while thisskill was unknown in the 1991 study. Oral communication, production management andinternational business got significantly better ranking in 2007. The large rankingimprovement in business skills was related to future opportunities and threats. Theranking of five skills in the business group decreased significantly includingself-confidence, self-motivation, ability to plan, managerial control and ability to organize.

Purchasing/buying are key responsibilities related to SCM. In this respect, Carr andSmeltzer (2000) examined the relationship between purchasing skills with strategicpurchasing, financial performance and supplier responsiveness. They divided purchasingskills into three groups: people skills, technical skills and analytical/communication skills).Their analysis indicated that analytical/communication skills were related more tosupplier responsiveness whilst both technical skills and analytical/communication skillswere related to performance. It means that purchasing professionals should havetechnical knowledge and be able to communicate technical ideas (Carr and Smeltzer, 2000).

Giunipero and Pearcy (2000) asked 136 purchasing professionals to rate30 purchasing skills in seven categories: strategic skills, process management skills,team skills, decision making skills, behavioural skills, negotiation skills, andquantitative skills. They introduced the “World-class skill set” including ten mostimportant skills: interpersonal communication, ability to make decisions, ability towork in teams, analytical, negotiation, managing change, customer focus, influencingand persuasion, strategic, and understanding business conditions.

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Closs and Mollenkopf (2004) describe the twenty-first century logistics frameworkwhich was developed at Michigan State University in 1999. This framework identifiessix firm competencies critical for logistics and SCM which can be grouped intooperational, planning, and behavioural processes. The operational process comprisesfirm competencies which include customer integration, internal integration, andsupplier integration (for both goods and services). The planning process includescompetencies of technology and planning integration and measurement integration.The behavioural process includes one key competency, namely relationship integrationwith customers and suppliers.

It is clear from the above that supply chain professionals must possess an appropriateset of competencies and skills to manage global supply chains and be in a position todeal with a wide variety of issues and challenges in an effective and responsive manner.In our study, we examine competencies/skills relating to communication and teamwork,technology, initiative and enterprise, and compliance and legal issues. From theoreticalperspective, the managerial skills and competencies for supply chain processes requireboth technical as well as inter-personal elements. In this regard, we draw from thesocio-technical system (STS) theory which suggests that organizations are seen asconsisting of two independent but linked systems: a technical system and a social system(Manz and Stewart, 1997). The technical aspects comprise of both material technologiesas well as related knowledge which refer to a broader sense of technicalities, while thesocial aspects refer to people’s behaviours and social interrelationships. Therefore, STStheory is focused on the interrelatedness of social and technical aspects of an organizationas a whole as well as the joint optimization of the social and technical components of thework environment (Cummings, 1978; Fairhurst et al., 1995; Manz and Stewart, 1997).Such joint optimization is considered more desirable than sole optimization of eithersystem (technical or social) at the expense of the other (Taylor and Asadorian, 1985).Therefore, the management of organizations must find a fit between their coretasks/technology, formal organizational arrangements, informal organization, employeecharacteristics, and the external environment of the firm (Nadler and Tushman, 1980). Inthe light of STS theory, we hold that supply chain managers need to acquire skills andcompetencies in dealing with both technological aspects as well as social aspects inmanaging supply chain activities within their firms as well as with other firms.

2.2 Supply chain technologiesThe role of IT in supply chains has changed from a competition weapon to acooperation enabler (Hong, 2002). Use of technologies in supply chains could bringoperational benefits like cost reduction and service improvements and strategicbenefits such as improvements in product planning and innovation (Lancioni et al.,2003; Williamson et al., 2004). Information technology enables six major areas of SCMincluding:

(1) strategic planning;

(2) virtual enterprise;

(3) e-commerce;

(4) infrastructure;

(5) knowledge and IT management; and

(6) implementation (Gunasekaran and Ngai, 2004).

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Lancioni et al. (2003) suggest that the internet provides supply chain managers theability to be agile. This ability includes quickly adjusting inventory levels, adding orreducing carriers when needed, increasing the speed in reacting to customer serviceproblems, more effectively managing distant facilities, reducing the level of paperworkin a supply chain system, adjusting material throughput when necessary, trackingshipments more accurately, developing cost effective purchasing strategies, improvingproduction scheduling and reducing operational redundancy in supply chain systems(Lancioni et al., 2003).

As the concept of supply chain develops, the information and communicationtechnology (ICT) based systems required to support it emerge. Supply chains thatproduce or use such systems are more successful than ones that could not adopt the newtechnologies (Kumar, 2001). A noticeable shift can be observed in supply chains, as the“build to order” model replaces the “build to forecast” method (Dawson, 2002). PrimaryICT technologies in supply chains were quantitative model-based like “advancedplanning systems” (APS) to optimize demand forecasting and inventory management.These decision support systems rely on historical data to forecast demands within astable supply chain. While in emerging “demand-driven supply networks” with constantinnovation and short product life cycle, there are not sufficient data about productdemand. On the other hand with new IT based communication channels, the previousbarriers like geographical proximity and partners’ availability are not important. Thenew generation of ICT-based supply chain applications improve cooperation andcoordination in horizontal and vertical directions in supply chain (Kumar, 2001).

Recent years have witnessed a tremendous growth in SCM softwares likewarehouse management, transportation management systems and supply chainplanning and execution. The use of third party software systems, collaborativetechnology and use of expert systems are some of the emerging trends (Green, 2001).Technologies like electronic data interchange (EDI) are used by companies as a tool forefficient replenishment and improved coordination with suppliers (Hill and Scudder,2002) and as a key technology enabler for integrating different functions across thesupply chain (Boubekri, 2000). However, since EDI is expensive and can restrict theexchanged information, the retail sector, for example, is moving towards new ways ofinformation exchange like electronic marketplaces (Sparks and Wagner, 2003). Wefurther examine the use of internally focussed and externally focussed supply chaintechnologies and compare their usage between SME and large enterprises.

From a theoretical perspective, the need for supply chain integration increases asthe competition has shifted from the firm level to supply chain level. This means thatthe competitiveness of individual firms is no longer solely determined by theirindividual capabilities, but also significantly influenced by their supply chain network(Flynn et al., 2010). Therefore, building integration within supply chain partners hasbecome a necessity that firms cannot afford to ignore. In this regard, supplychain-related ICTs enables real-time collaboration and integration between supplychain partners by providing organizations with forward visibility which allows themto improve their production planning, inventory management and distribution. Inessence, firms need to build both internal and external integration of information intheir supply chain processes (Sanders, 2007; Savitskie, 2007) with one of the keybenefits of having information integration being that firms can now operate with realtime and accurate information (Narasimhan and Kim, 2001; Devaraj et al., 2007).

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Furthermore, Frohlich and Westbrook’s (2001) concept of “the arc of integration”suggests that firms which are capable of expanding the arc of integration in theirsupply chain will be able to improve their performance. In this regard, ICTs allows forthe transmission and processing of information necessary for synchronous decisionmaking between supply chair partners. Such integration will enable these supply chainmembers to coordinate the flow of materials to be smooth; thus, reducing the need fordecoupling points (i.e. inventory) due to risk of disrupted supply (Childerhouse andTowill, 2003). As such, this study examines the extent to which various supply chainICTs have been applied in building information integration between firms and theirsupply chain partners.

2.3 Future challengesThe changes in the business environment have also resulted in a significant impact onSCM. The rise in fuel costs and the recent pressure (from a market and regulatoryperspective) for adopting “green” operations will have major consequences for allbusinesses along the supply chain. One of the potential effects of this new policy is thatit will increase the cost of doing business which will undermine the competitiveness ofbusinesses that will force firms to either close their local operations or relocate to othercountries with less pressure on environmental issues.

A number past studies have examined future directions and trends in purchasingand supply management as well as future challenges for supply chain managers(Carter and Narasimhan, 1996; Murtaza et al., 2004; Sohal and Perry, 2006; Storey et al.,2006; Ballou, 2007; Jain and Benyoucef, 2008; Hameri and Hintsa, 2009).

Carter and Narasimhan’s (1996) paper based on the purchasing futures researchproject develop ten propositions and the future of purchasing and supply managementwhich they conclude have implications for organisational structure, policies, practicesand procedures, and education and training needs. Using the Delphi method, Hameri andHintsa (2009) discuss the drivers of change and their implications for global SCM. Theirfindings highlight “increased off-shoring of operations” through truly globalmanufacturing, characterized by its intercontinental supply of materials; increasedproduct complexity with shorter product life cycles; increased importance ofbusiness-to-government networking for operational and security efficiency;introduction of new supply chain services integrating financial, physical andinformation flows leading to further consolidation in the logistics markets; and theoverall increase in risks and vulnerabilities in international supply chains (p. 741).

Based on an extensive review of the literature and a survey, Jain and Benyoucef(2008) discuss the complexities, gaps and challenges associated with long supplychains and offer suggestions as to how the emerging enabling technologies can beapplied to support these gaps and challenges. Murtaza et al. (2004) discuss theopportunities and challenges facing e-marketplaces as well as the concerns facingpotential participants. These authors identify integration issues, security issues andantitrust issues as the major concerns facing existing and potential buyers andsuppliers in e-marketplaces.

Sohal and Perry’s (2006) research using face-to-face interviews examined theAustralian cereal products supply chain and highlighted a number of major businessand environmental challenges. These include the impact of globalisation, changingclimate conditions and demand trends; industry complexity and realignment; power

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relationships; and the information economy. Based on a three-year study of six supplychains in Europe which encompassed 72 companies, Storey et al. (2006) also identifiedfour key challenges for SCM along with its future prospects. First, SCM must now beconsidered as a wider set of activities which entails outsourcing, cross-boundaryinterrelationships, flattened organisational structure, teamwork and empowerment.Second, the understanding of SCM has increased as firms now move towardsoutsourcing and are focused on their core competence. Third, as products are becomingmore and more fragmented, there is a need for stronger skills in managing agility inSCM that can deal with issues relating to increasing variety. Fourth, as firms areentering global markets, they should give greater attention to the key components ofsupply chain processes in addition to their internal capabilities.

A more recent study by Ballou (2007) identifies the following major challengeslikely to confront SCM in the near future:

. a revenue generation strategy for the supply chain will be as important as a costreduction one;

. boundary-spanning benefits of SCM may be easy to identify but will be hard torealize;

. coordination and collaboration, along with trust, will be the most importantelements to realizing boundary-spanning opportunities;

. information sharing among channel members is likely to continue withadvancing technology and may be called coordination, compromise, andcooperation;

. boundary-spanning metrics will be needed to identify supply chain benefits andtrack their location in the supply channel;

. methods of benefits sharing will need better definition and refinement;

. supply chain relationships are not inherently steady-state, so examples of goodsupply chain coordination among a few firms will be selective and short-term;

. logistics curricula transforming to a supply chain curricula will need to beexpanded to include the subjects of relationship and trust building; and

. operations, purchasing, and logistics will merge organizationally, probablyunder the supply chain banner.

Understanding the future challenges and then developing appropriate strategies is akey aspect of the job of supply chain managers. In our study, we examine challengesrelating to environment, globalisation, integration, training and development, use of ITand supply chain responsiveness/agility.

3. MethodsThe research was conducted by means of a postal questionnaire survey which wasdeveloped in consultation with GS1 Australia which is part of GS1 Global – anot-for-profit organisation that supports companies in areas such as supply chainefficiency, traceability, inventory management, etc. The targeted respondents weresupply chain professionals who are members of GS1 Australia. A total of 921 surveyswere mailed out, and 148 responses were received, which constitutes a 16 per centresponse rate.

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3.1 Survey instrumentThe questionnaire was designed based on a number of sources, including academicjournal articles, public media, and GS1 Australia’s competencies training curriculum.The survey instrument was reviewed by a number of personnel from industry with thepurpose being to assess its readability, clarity, and feasibility. The individuals whowere involved in this review included three representatives of GS1 Australia, onesenior executive from efficient consumer response (ECR) Australasia and one seniorexecutive from the Supply Chain and Logistics Association of Australia (SCLAA).

3.2 Industry sectorsAs shown in Table I, respondents to the survey represented a number of differentindustry sectors. These can be roughly divided into two groups namely production andservices. The largest production group consists of manufacturing companies, inclusiveof food and beverage, accounting for 47 per cent of the sample whilst construction andagriculture businesses account for 5 per cent of the sample. The largest sectors makingup the non-production or services group is wholesale and retail trade, accounting for21 per cent of the sample. The remaining sample comprises of medical and healthcare(7 per cent), information technology and telecommunications/electronics (6 per cent) andtransport and distribution (5 per cent). The industry sectors represented in the studysample mirrors the GS1 Australia membership, where approximately 52 per cent arefrom manufacturing and 31 per cent from wholesale/retail.

3.3 Organisational sizeThe distribution of data, as presented in Table II, with respect to the number of peopleemployed in the responding companies reveals a roughly even spread across small-,medium- and large-size companies. One-third of the sample is represented bycompanies employing less than 50 people whilst another one-third employs more than

Industry sectors %

Manufacturing/food and beverage 47Medical and healthcare 7Information technology and telecommunications/electronics 6Transport and distribution 5Wholesale/retail trade 21Construction and agriculture 5Services others 7Not specified 3

Table I.Industry sectors

Number of employees %

Less than 50 3350-99 13100-499 22500-999 61,000 or more 25

Table II.Organisational size

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500 people. Within the large-size category, 25 per cent employ more than 1,000 people.Combined, small and medium enterprises (SMEs) make up two-thirds of the sample.The sample is reflective of the GS1 Australia membership profile where the vastmajority of members fall in the SME category.

3.4 Respondents positionAs shown in Table III, just over one-fifth (21 per cent) of the respondents to the surveyrepresented top management (CEO/GM/MD/supply chain director) with the remainderrepresented by middle management. Almost 60 per cent of the respondents had directresponsibility for SCM with 9 per cent holding the position of supply chain director and49 per cent having the title of supply chain manager. A significant proportion of thesample was represented by production/operation managers and quality managers(12 per cent) and accounting/finance and information system managers (9 per cent). Thisprovides an appropriate sample for this study with respondents having both knowledgeof strategic goals of their companies and understanding of supply chain activities.

4. Results4.1 Competencies and skills for supply chain professionalsThe competencies and skills examined below are primarily based on the GS1Australia’s skills requirements matrix. This was developed by a consortium ofacademic and industry partners under the GS1 Australia SCM futures forum. In thissection, respondents were asked to indicate the level of importance of a number ofdifferent skills and competencies for managing supply chain activities. Responses werepresented on a five-point Likert scale where 1 – “not significant” and 5 – “critical”. Theresult is presented in Table IV.

4.1.1 Communication and teamwork skills. Table IV shows the means calculated forthe three different soft skills included in the survey for managing supply chainactivities. The “ability to work effectively with individuals and groups/teams –cross-culturally, intra and inter organisationally” was considered the most importantcommunication and team work skill with a mean score of 4.39, followed by the “abilityto manage relationships in diverse contexts – cross-culturally, intra and interorganisationally” (4.23 mean score). These skills were identified as the most importantand demonstrate the respondent’s perception of the requirements for the successfulintegration of different firms along the supply chain, both domestically and globally. Inparticular, the ability to manage cross-cultural teamwork stands out compared to otherskills, indicating that the scope of supply chain network has been expandinginternationally, and, therefore, demands competencies in communicating and dealingwith other parties from different cultural backgrounds.

Position of the respondents %

Supply chain director 9Supply chain manager 49CEO/GM/MD 12Production/operations/quality manager 12Accounting/finance/information system manager 9Others 10

Table III.Position of therespondents

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4.1.2 Technological skills. The respondents conferred a “high” degree of importance totechnology skills such as the “ability to make use of numerical techniques for decisionmaking (e.g. forecasting and scheduling)” and “project management skills and ability tolead major projects” with mean scores of 4.10 and 4.09, respectively. Other skills such asthe “ability to solve complex and novel SCM problems (e.g. issues of tracking andtracing, product authentication)” and “understanding of the interconnection of SCMwith other disciplines (e.g. information systems, industrial engineering and humanresources)” were given “medium” to “high” scores. The results suggest that supply chainprofessionals require knowledge of a broad range of technologies. Without thisknowledge they are unlikely to achieve a high level of integration along the supply chain.The increasing scope and complexity of supply chain issues and problems must behandled by managers having broader skills in data analysis techniques as well as toolsand technologies to perform the analysis (which cannot be done manually) andsupporting the decision-making processes.

4.1.3 Enterprise skills. In the initiative and enterprise skill category, respondentsidentified the “ability to manage risks in supply chain and their associated issues” as themost important skill with a mean score of 4.11. Other skills such as the “ability to

Mean SD

Communication and teamworkAbility to work effectively with individuals and groups/teams – cross-culturally, intraand inter organisationally 4.39 0.61Ability to manage relationships in diverse contexts – cross-culturally, intra and interorganisationally 4.23 0.68Communicate effectively through different media and styles 3.81 0.92Technology skillsAbility to make use of numerical techniques for decision making (e.g. forecasting andscheduling) 4.10 0.78Project management skills and ability to lead major projects 4.09 0.71Ability to apply continuous improvement and customer focus concepts 4.00 0.62Ability to apply supply chain technologies and application software 3.92 0.71Ability to solve complex and novel SCM problems (e.g. issues of tracking and tracing,product authentication) 3.85 0.75Understanding of the interconnection of SCM with other disciplines (e.g. informationsystems, industrial engineering and human resources) 3.76 0.80Initiative and enterprise skillsAbility to manage risks in supply chain and their associated issues 4.11 0.65Ability to manage change within the local context 4.00 0.75Ability to develop and implement long term business strategies 3.93 0.79Understand the importance and value of sustainable business practices (e.g. triplebottom line) 3.67 0.85Understanding of basic accounting and budgeting 3.64 0.75Ability to manage change within the global context 3.56 0.89Advancing SCM knowledge through professional engagement 3.42 0.75Compliance and legal knowledgeAwareness of ethical issues at the national and international level 3.52 0.96Respect for diversity, social justice principles, the environment and corporategovernance 3.51 0.88Understanding of contractual and legal/regulatory aspects of the business 3.77 0.84

Table IV.Competencies and skills

for supply chainprofessionals

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manage change within the local context” and “ability to develop and implementlong-term business strategies” were considered to be of high importance with meanscores of 4.00 and 3.93, respectively. Advancing SCM knowledge through professionalengagement was assigned a “medium” level of importance. A similar finding wasbrought to light in a survey conducted by Krishnan and Shulman (2007) whereinexecutives in operational roles perceived a higher increase in the degree of supply chainrisk over the past five years, indicating the rising challenges in SCM due to a number offactors discussed previously. As firms enter global markets and operations, theynormally expand the scope of both upstream and downstream supply chain networks.This expansion, while bringing advantages (e.g. cheaper supply bases and broadermarket penetrations), also presents greater risks due to increased uncertainty on bothsides. For example, distant geographical locations between suppliers, manufacturers,and customers could create delay in the flow of materials and products along the supplychain pipeline which put firms’ performance at risk. Based on current thinking in SCM,these figures suggest that Australian supply chain professionals have not yet fullyrecognised the strategic importance of SCM in the overall success of the network ofcustomers and suppliers.

4.1.4 Compliance and legal knowledge. As shown in Table IV, the respondentsconferred a “medium” level of importance to the “understanding of contractual andlegal/regulatory aspects of the business”, “awareness of ethical issues at the national andinternational level” and “respect for diversity, social justice principles, the environmentand corporate governance” with mean scores ranging from 3.51 to 3.77. In manyorganisations these activities are the responsibility of specialists with a legalbackground and may explain the lower response obtained in this survey. However, webelieve that supply chain professionals of the future should be reasonably conversant inthis area, particularly when dealing with trading partners from different countrieswhich have different laws and regulations relating to supply chain matters(e.g. export/import, tax, chemical substances, etc.).

4.2 Supply chain technologiesThe technologies analysed below encompass a broad range of technologies available toSCM. The respondents were asked to report on the usage of a number “internallyfocussed” and “externally focussed” supply chain technologies in their company.Responses were provided on a five-point Likert scale ranging from 1 – “not at all” to5 – “very large extent”. The results are presented in Table V.

The major technologies that were used to “some extent” are primarily “internallyfocussed technologies” and include “warehouse management system”, “data capturesystems (e.g. barcode scanning)” and “enterprise resource planning (ERP)” with meanscores of 3.47, 3.27 and 3.14, respectively. These findings are quite surprising given thefact that data capture is at the heart of any technologically based supply chainintegration initiative. In the “externally focussed technology” category,“EDI/e-messaging” was reportedly used to “some extent” with a mean score of 3.40.It is important to further examine the way EDI has been used; what kind of informationis exchanged using this technology. Past studies show that while firms do builde-communication with their trading partners, the level of shared information is stillfairly low, for example, purchase orders and other general information relating to thetransactions. In contrast, mean scores for technologies like “global positioning system”,

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“radio frequency identification (RFID)”, “online reverse auction/e-auction”, “onlinebidding/tendering” and “public e-marketplaces (e.g. global healthcare exchange)” werevery low, indicating less degree of the adoption of these technologies.

Overall, there are only four technologies that are used on average at above mediumlevel (i.e. 3.00). Out of these four, three of them are internally-focused. This suggests thatAustralian firms have yet to embark on “e-business” in their supply chain activities at abroader scale. One problem might be a low level of awareness and knowledge possessedby firms on the benefits of these technologies as well as the large financial investmentrequired for installing the technologies. This may create negative perceptions amongstmanagers with respect to the risks and returns associated. At the same time, withvarious versions and levels of telecommunication technologies and systems developed(particularly in different countries) can cause a problem of compatibility of the systemsand technologies between global supply chain trading partners, resulting in failure tolink their supply chain processes via information and communication technologies(ICT). Much lower scores for adoption appear for other (more advanced) technologieswhich overall indicate that Australian firms are relatively at the “beginner” level asusers of these technologies.

4.3 Future challenges for supply chainsIn this section, respondents were asked to assess the level of future challenges for supplychains over the next three to five years. A total of 31 potential challenges were listed inthe questionnaire. The responses were presented on a five-point Likert scale rangingfrom 1 – “none” to 5 – “critical”. The results are presented in Table VI under six majorheadings namely environment, globalisation, supply chain integration, training anddevelopment, information technology and supply chain responsiveness on the future ofsupply chain. None of the challenges were identified as absolute critical for the future.

Mean SD

Internally focused technologiesWarehouse management system 3.47 1.47Data capture systems (e.g. barcode scanning) 3.27 1.43Enterprise resource planning (ERP) 3.14 1.52Transportation management system 2.88 1.30Scan-packing applications 2.78 1.54Advanced planning and optimization (APO) 2.44 1.34Externally focused technologiesEDI/e-messaging 3.40 1.38Electronic/online product catalogue 2.94 1.29Electronic/online purchase order system 2.91 1.35Private B2B exchange/extranet between your company and your customers 2.56 1.40Private B2B exchange/extranet between your company and your suppliers 2.27 1.26Electronic customer relationships management (e-CRM) 2.16 1.22Electronic supplier relationships management (e-SRM) 1.83 1.05Global positioning system 1.68 1.06Radio frequency identification (RFID) 1.64 1.02Online reverse auction/e-auction 1.60 1.00Online bidding/tendering 1.58 0.95Public e-marketplaces (e.g. global healthcare exchange) 1.24 0.59

Table V.Supply chaintechnologies

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4.3.1 Environmental issues. As shown in Table VI, “transportation costs (due togeographical distance and petrol supply/price)” is identified by the respondents to havethe highest impact on supply chains in the future with a mean score of 4.28. A similarfinding was highlighted in a recent survey conducted by Enkvist et al. (2008), whereinsenior executives from around the globe credited the rising prices of energy to have animportant impact on their supply chain strategies. Other environmental issues relatingto the management of scarce resources, such as “lean concepts in supply chain”,“environmental (‘green’) impact of products and processes” and “limited naturalresources” are perceived by the respondents to have “medium” degrees of impact withmean scores of 3.67, 3.65 and 3.47, respectively.

Mean SD

Environmental issuesTransportation costs (due to geographical distance and petrol supply/price) 4.28 0.74Lean concepts in supply chain 3.67 0.95Environmental (“green”) impact of products and processes 3.65 0.77Limited natural resources 3.47 0.86Reverse logistics 3.17 0.95Closed-loop supply chain 3.10 0.90Impact of globalisationGlobal supply and distribution channels 3.66 0.99Complexity of the structure of supply networks and distribution 3.55 0.81Streamlining global and multiple supply flows 3.40 0.95Vulnerability and risk with globalisation 3.22 0.91A shift of centre of gravity of supply chain activities to China and India 3.21 1.17Challenges in international trade, including legislation and tariffs 3.10 1.06Supply chain integrationGreater visibility requirements of supply chain 3.86 0.84Lead time compression (end-to-end supply chain pipeline) 3.74 0.92Integrating processes with supply chain partners 3.74 0.75Managing trust-based relationships with supply chain partners 3.61 0.89Intensify strategic partnerships with supply chain partners 3.61 0.91Integrating organisational functions through supply chain processes 3.55 0.85From firm’s competition to supply chain’s competition 3.29 0.88A shift in outsourcing supply chain activities from 3PL to 4PL 2.90 1.02Supply chain training and developmentSupply chain education, training, and careers development 3.67 0.83Skills shortage and aging population 3.52 1.04Impact of information technologyReal-time operating data to reduce time and cost 3.84 0.91Technological adoptive capabilities 3.50 0.78Balancing transparency and security of information flows and exchanges 3.27 0.87Maximising ICT as a leverage for supply chain performance 3.17 0.96Supply chain responsivenessMeasuring supply chain performance (qualitative and quantitative metrics) 3.77 0.90Responsiveness and agility to fragmentation and variety of customers’ needs 3.76 0.80Volatile demands and markets 3.66 0.84Responsiveness of standards development to business requirements 3.40 0.83Shortened and more complex product life cycles 3.32 1.02

Table VI.Future challengesfor supply chains

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The environmental issues are strongly related to supply chain activities. Greensupply chain (GSC) practices have recently emerged as an important topic whichintegrates the various aspects of SCM with an emphasis on sustainability. The activitiespertaining to these include from product design, material sourcing and selection,manufacturing processes, delivery of the final product to the consumers as well asend-of-life management of the product after its useful life. Today, customers, suppliers,the public and other stakeholders are increasingly demanding manufacturing firmsminimize any negative impact of their products and operations on the naturalenvironment (Gonzalez-Benito and Gonzalez-Benito, 2006). Overall, the challenge here isto reconcile the demand of the two aspects of sustainability; being “green” on the onehand and being “profitable” on the other hand.

4.3.2 Impact of globalisation. Effects of globalisation such as “global supply anddistribution channels” and “complexity of the structure of supply networks anddistribution” are identified by the respondents to have a “medium” to “high” degree ofimpact on supply chains in the future. In contrast, effects such as “a shift of centre ofgravity of supply chain activities to China and India” and “challenges in internationaltrade, including legislation and tariffs” are recognised to have a “medium” level ofimpact on supply chains with an average mean of 3.16. As competition becomes moreglobal, value chain functions become more geographically dispersed, and supply chainlinkages between supply chain members become more complex. These changes havebrought about a need for greater understanding of coordinating these linkages, andfirms that are unable to coordinate their global supply chain networks will be unable tosucceed in the emerging international economy. In this regard, the awareness ofAustralian supply chain professionals on global issues does not suggest strong andcompelling views. This is surprising given the geographical location of Australia whichis somewhat disadvantaged from major markets, such as North America and Europe.

4.3.3 Supply chain integration. Challenges relating to “greater visibility requirementsof supply chain”, “lead time compression (end-to-end supply chain pipeline)”, and“integrating processes with supply chain partners” are identified to have a “medium” to“high” impact on the future of supply chains, with mean scores of 3.86, 3.76, and 3.74,respectively. In contrast, “shift in outsourcing supply chain activities from 3PL to 4PL”was identified as having the lowest level of impact amongst all the challenges listed inthe survey. The concept of integrated logistics has changed the view of competition;from between individual firms to between supply chain networks which reflects abroader view of operations from intra-firm level to inter-firm level. The findings in thisregard indicate that Australian supply chain professionals have acquired awareness ofthe importance of building supply chain integration in order to coordinate the flow ofmaterials from their suppliers. This will allow firms to have a smooth (seamless)production process which produces a seamless connection between the firms and theirsupply chain partners. However, the low usage of various supply chain technologies(presented in the earlier section) indicates that supply chain professionals may not haveyet fully recognised the major challenges of integration.

4.3.4 Supply chain training and development. SCM has become very complex due to anumber of challenges that affect business in general. The respondents to this surveyperceived “supply chain education, training and careers development” and “skillsshortage and aging population” as two areas to have a “medium” degree of impact onsupply chains in the future, with mean scores of 3.67 and 3.52, respectively. This is

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further validated by a recent study (Guthridge and Komm, 2008), wherein seniorexecutives from around the global identified the difficulty of attracting and retainingtalent as a key challenge in managing supply chain talent globally. Education andtraining providers must respond accordingly by attracting the right people to undertakethe right supply chain programs that will prepare them as leaders and managers of thefuture. This will require the education and training providers to work closely with therelevant industry associations, employers and government departments. Anotherchallenge in supply chain training is the learning process that all supply chainprofessionals need to engage (Spekman et al., 2002). This is because learning aboutsupply chain is affected by both internal factors (internal organisations) as well asexternal factors (supply chain partners). Spekman et al. (2002) suggests five factorswhich perform as pre-condition for supply chain learning, namely trust, commitment,communication, shared culture, and integrative mechanism. These relational andorganisational factors can facilitate or inhibit supply chain learning which in turn willaffect competence of supply chain professionals and firm’s performance.

4.3.5 Impact of information technology. Respondents identified informationtechnologies such as “real-time operating data to reduce time and cost” and“technological adoptive capabilities” to have a “medium” to “high” level of impact onsupply chains in the future with mean scores of 3.84 and 3.50, respectively. These resultsindicate that the strategic benefits of information and communication technologies maynot be fully recognised. Coupling this finding with the previous section on the adoptionof supply chain technologies, it conveys a message that not only is the level of adoptionof IT across supply chains is low, but the awareness and the need for adoption are alsonot very high.

4.3.6 Supply chain responsiveness. An agile supply chain is required for companies tostand above their competitors. As shown in Table VI, top areas of concern identified by therespondents to have a “medium” impact on supply chains in the future related to“measuring supply chain performance (qualitative and quantitative metrics)”,“responsiveness and agility to fragmentation and variety of customer’s needs”, and“volatile demands and markets”. Supply chain responsiveness is one of the expected effector outcomes of supply chain integration. Comparing the scores between this section andSection 4.3.3, it seems that Australian firms have yet to foresee the challenges of globaldynamic markets which require them to be more agile in responding to changes in thedemand and expectations of customers and suppliers.

5. ConclusionsGiven the highly dynamic and rapidly changing business environment as well as thefact that more and more businesses are now engaged globally, it is essential that firmsplace greater emphasis on their supply chains in addition to their internal operations.In this regard, the competencies/skills of supply chain professionals, their use ofrelevant technologies and their awareness of future challenges are critical. The resultsreported in this paper add to the literature on these three aspects.

The results of this study highlight a range of competencies and skills perceived bysupply chain professionals as important for the successful integration of differentbusinesses along the supply chain, with the most important being communication andteamwork skills. The results also suggest that supply chain professionals requireknowledge of a broad range of technologies, both intra-company and inter-company

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technologies, to realise the strategic importance of SCM in the long-term success oforganisations. The greater level of adoption of internally-focused supply chaintechnologies compared to externally-focused ones could indicate the mindset ofmanagers who might still adopt an old way of thinking in managing supply chains. Thisold way suggests that competencies are primarily based on the internal resources thatindividual firms possess. In this way, they might still perceive that competition isbetween firms instead of between supply chains. With respect to future challenges forsupply chain professionals, the results indicate that environmental issues relating to themanagement of scarce resources have a significant impact on supply chain strategies.Supply chain professionals will need to possess a diverse set of skills to tackle the variedperceived challenges expected in the future, including cross-cultural communications.More importantly, it is essential to understand that supply chain competencies should becustomised and utilised in different ways to create different performance advantagesacross the various business environments (Closs and Mollenkopf, 2004).

The findings of this study have implications for a number of stakeholders. The resultsof our study indicate that there is considerable room for improvement and that Australiansupply chain professionals need to take urgent and positive actions to respond to theglobal challenges. The findings presented above are relatively similar to the earlierstudies reviewed. What is absolutely essential is that practitioners be made aware of theweaknesses that exist within their business with respect strategies, use technologies andtheir own level of knowledge on a whole range of issues surrounding their internaloperations and that of the extended supply chains that they are part of. It should be wellunderstood that supply chain technologies will not by themselves improve firms’ supplychain performance, no matter how advanced they are. As the study by Wu et al. (2006) hasshown, IT advancement needs to be accompanied by IT alignment before it can performas effective resources for supply chain capabilities. In building IT alignment, firms needto integrate both internally-focused and externally-focused supply chain technologies,and this requires high level of competencies of supply chain professionals.

Top managers must recognise the strategic importance of SCM and the need forbuilding a highly integrated and effective supply chain that can respond to the changingenvironment and hence contribute to business performance. In order to achieve this, theymust commit themselves to appointing highly competent supply chain professionals andprovide the right infrastructure (including the use of appropriate technologies andsystems) that will enable supply chain processes to be performed in a highly collaborativeand integrated manner. At the same time, there is a need for government, educationproviders, industry associations and business organisations to work together to developleading edge educational and training programs that will produce supply chainprofessionals who can meet current and future challenges head on. As shown by thefindings reported in this paper, Australian supply chain managers still need to acquirestronger awareness on the impact of globalisation on supply chains as well as the need forhigher level of competencies necessary in managing global supply chains. This lack ofawareness is reflected in the responses to the key issues listed in Table VI. This problemneeds to be addressed by various stakeholders in an integrated manner. Increasing thisawareness will requires significant support from government and industry associationswhilst improving the skills will need support from education and training providers.

Linking the three major findings of this study, we draw a number of key insights. First,the results suggest that Australian supply chain managers have acquired good awareness

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of the issues relating to globalisation of supply chains. This is reflected in the top rangeof skills and competencies considered as critical for supply chain managers which includesthe ability “to work effectively with individuals and groups/teams – cross-culturally, intra-and inter-organisationally” and “to manage relationships in diverse contexts –cross-culturally, intra- and inter-organisationally”. Therefore, in terms of the socialaspects of the competencies, these managers appear to be ready for entering globalmarkets. However, these social (soft) aspects seem not balanced with technical (hard)aspects as suggested by the STS theory. While there is an awareness of the need for havingthe necessary skills in utilising supply chain technologies, this is not matched with the levelof adoption of supply chain ICTs in the organisations which is shown to be relatively low.

At the same time, there has been concern shown with the transportation issue amongAustralian supply chain managers. We believe that to a large degree, this concern isstrongly related to the situation where Australian firms must deal with global markets. Inthis particular context, of Australia, supply chain managers consider that geographicaldistances have been a major challenge in managing supply chains domestically andglobally. The Australian population is concentrated in a few major cities that are manyhundreds of kilometres apart; making transportation an important factor which couldsignificantly affect costs and time. From a global perspective, Australia’s isolation,particularly from Europe and other Western markets, make transportation issues equally, ifnot more, important than production issues. As expressed by the respondents, the challengeof managing transportation is accompanied by another issue of compressing the lead-timeof end-to-end supply chains. In addition, the challenges of attaining greater visibilityand real-time operating data clearly suggest that supply chain integration is paramountimportance for Australian industry. Both visibility and real-time data are the keyelements of developing a responsive (agile) supply chain system to serve an increasinglyfragmented and diversified customer base (Barratt and Oke, 2007; Kim and Lee, 2010).

One of the key solutions to addressing the integration issue is by implementing ICTs,as mentioned earlier. However, we also found that Australian firms are still at an earlystage in capitalising on the potential of ICTs in building supply chain integration. Thelevel of supply chain-related ICTs, as mentioned earlier, is still relatively low. Morespecifically, Australian firms appear to be less familiar with externally-focused ICTswhich have the potential for building information integration with supply chain partners.This problem is further reinforced by the low perception that supply chain managers haveon the need for maximising ICTs as leverage for supply chain performance. In sum, ourstudy provides preliminary evidence which highlights the need for the adoption of supplychain ICTs in Australian firms along with managerial skills required for capitalising thepotential benefits of these technologies. As suggested by Ngai et al. (2011), theimplementation of ICTs for SCM must be accompanied by strong managerial skills andcompetencies without which the benefits of ICTs will not be fully realised.

Finally, we acknowledge the limitations inherent in this study. In particular, while ithas provided a snapshot on the perceptions of Australian supply chain professionals onthe key issues surrounding SCM in a global context, the descriptive nature of this studydoes not aim to examine specific links between these issues. Therefore, we stronglyrecommend that future research should examine more closely the relationship between thecompetencies of supply chain professionals, supply chain processes and supply chainperformance.

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(The Appendix follows overleaf.)

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Appendix

Company and Respondent’s Profile

Industry sector: ________________________________________________________ or ANZIC:

How many people does this company employ?

Less than 20 20 to 49 50 to 99 100 to 249 250 to 499 500 to 999 1,000 or more

What is your current position in this company?

Supply chain Director Production/Operations Manager Quality Manager

Supply chain Manager Sales/distribution Manager Marketing Manager

Purchasing Manager Accounting/Finance Manager Information System Manager

Chief Executive Officer (CEO) General Manager Managing Director

Other, please specify ____________________________________________________________________________

Competence and skills for supply chain professionals

Please indicate the level of importance of the following skills and competencies for managing supply chainactivities:

Not significant Low Medium High Very high

Communicate effectively through different media and styles

Ability to manage relationships in diverse contexts - cross culturally, intra and inter organisationally

Ability to work effectively with individuals and groups/teams - cross culturally, intra and inter organisationally

Ability to apply supply chain technologies and application software

Ability to make use of numerical techniques for decision making (e.g. forecasting and scheduling)

Understanding of the interconnection of SCM with other disciplines (e.g. information systems, industrial engineeringand human resources)

Ability to solve complex and novel SCM problems (e.g. issues of tracking and tracing, product authentication)

Understand the importance and value of sustainable business practices (e.g. triple bottom line)

Awareness of ethical issues at the national and international level

Advancing SCM knowledge through professional engagement

Respect for diversity, social justice principles, the environment and corporate governance

Ability to manage change within the local context

Ability to manage change within the global context

Project management skills and ability to lead major projects

Understanding of contractual and legal/regulatory aspects of the business

Ability to develop and implement long term business strategies

Understanding of basic accounting and budgeting

Ability to apply continuous improvement and customer focus concepts

Ability to manage risks in supply chain and their associated issues

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Supply chain technologies

Please indicate to what extent your company has been using the following supply chain technologies

Not at all Small extent Some extent Large extent Very large extent

Electronic data interchange (EDI)/e-messaging

Electronic/online product catalogue

Electronic/online purchase order system

Online reverse auction/e-auction

Online bidding/tendering.

Public e-marketplaces (e.g., Global Healthcare Exchange).

Private B2B exchange/Extranet between your company and your suppliers.

Private B2B exchange/Extranet between your company and your customers.

Enterprise Resource Planning (ERP)

Radio Frequency Identification (RFID)

Electronic Customer Relationships Management (e-CRM)

Electronic Supplier Relationships Management (e-SRM)

Advanced Planning and Optimization (APO)

Data Capture Systems (e.g. barcode scanning)

Scan-packing applications

Warehouse Management System

Transportation Management System

Global Positioning System

Future challenges of supply chain

Please assess the level of future challenges you perceive in supply chain areas over the next three to five yearswith regard to the following issues

None Low Medium High Critical

Environmental (“green”) impact of products and processes

Limited natural resources

Reverse logistics

Closed-loop supply chain

Global supply and distribution channels

Complexity of the structure of supply networks and distribution

A shift in outsourcing supply chain activities from 3PL to 4 PL

Real-time operating data to reduce time and cost

Transportation costs (due to geographical distance and petrol supply/price)

Volatile demands and markets

Technological adoptive capabilities

Integrating processes with supply chain partners

Managing trust-based relationships with supply chain partners

Intensify strategic partnerships with supply chain partners

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Corresponding authorDaniel Prajogo can be contacted at: [email protected]

Please assess the level of future challenges you perceive in supply chain areas over the next three to five yearswith regard to the following issues

None Low Medium High Critical

Streamlining global and multiple supply flows

A shift of centre of gravity of supply chain activities to China and India

Balancing transparency and security of information flows and exchanges

From firm’s competition to supply chain’s competition

Measuring supply chain performance (qualitative and quantitative metrics)

Integrating organisational functions through supply chain processes

Lead time compression (end-to-end supply chain pipeline)

Responsiveness and agility to fragmentation and variety of customers’ needs

Maximising ICT as a leverage for supply chain performance

Shortened and more complex product life cycles

Challenges in international trade, including legislation and tariffs

Greater visibility requirements of supply chain

Responsiveness of standards development to business requirements

Skills shortage and aging population

Lean concepts in supply chain

Vulnerability and risk with globalisation

Supply chain education, training, and careers development

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