Many businesses underestimate the importance of supply chain logistics to their bottom line. Some assume that a supply chain professional with skills and expertise might not make a big impact on operations compared to other factors. Others underestimate the importance of their supply chain professionals, who can remain in the background even as they ensure the business runs profitably and efficiently. But it turns out, almost nothing is more important to a company’s bottom-line. There's a strong connection between logistics expertise and profitability - as well as many other KPIs. Learn about all the benefits of hiring a CCLP in the complete guide for employers.
A number of significant research studies with thousands of companies have explored the links between the supply chain and corporate performance.1-3 Sound supply chain logistics management was consistently related to corporate success.
In fact, research by the Richard Ivey School of Business concluded that uninterrupted supply chain operations are more closely linked to a company’s overall financial performance than any other operational factor.1 It also found that a significant amount of companies didn’t pay attention to risk of supply chain disruptions – despite their tremendous impact - because those companies didn’t know the consequences of a disruption, or thought they didn’t happen often. So, in light of this research, increased focus on supply chain logistics is an obvious way of positively impacting the bottom line. But what can you do as an employer? Hire or train the right people.
Research conducted by MIT found that supply chain operations are more sensitive to the expertise and skills of people than they are to other, uncontrollable factors such as energy costs. That fact, taken together with the Ivey study gives smart employers a clear message—having logistics expertise is the biggest factor in a resilient, uninterrupted supply chain, and a resilient supply chain is the biggest factor for profitability. While surprising, that’s also great news for businesses. That’s because, unlike commodity pricing or oil costs, skill set is a factor that employers are in control of and can develop with a program like CITT’s. And skill gaps might be more common than employers think, as the MIT research found only 41% of the companies in the study had the mature expertise needed to effectively address incidents. And sector HR research indicates that the already shallow talent pool is set to diminish further, as the majority of supply chain employees are aged 40-59 and are approaching retirement age.4
For both supplier specialists and client-side roles involved in managing or procuring services, CITT’s CCLP® program develops the knowledge and skills required to keep supply chain operations stable and profitable. Students gain an operational and managerial understanding of how to assess the financial impact of supply chain strategies on the income statement, balance sheet, and overall corporate profitability.
Plus, CITT’s educational program also includes economics of logistics, advanced decision modeling, as well as laws governing transportation and logistics, which covers financial and contractual risk management – all of which can have big implications on a company’s bottom line.
To learn more about the CITT program of study and all the abilities-based outcomes, take a look at the CITT Abilities Guide.
1. Hendricks K, Richard Ivey School of Business, University of Western Ontario, Singhal VR, DuPree College of Management, Georgia Institute of Technology. Supply Chain Disruptions & Shareholder Value, 2005.
2. D’Avanzo RL, Starr CE, Von Lewinksi H. “Connecting with the Bottom Line: A Global Study of Supply Chain Leadership and Its Contribution to the High-Performance Business. Summary Results”, Outlook Journal, Feb 2004, Accenture, INSEAD and Stanford University
3. Simchi-Levi, D., Kyratzoglou IM., Vassiliadis CG., Supply Chain and Risk Management: Making the Right Decisions to Strengthen Operations Performance, Study by MIT Forum for Supply Chain Innovation and PwC, 2013.
4. Canadian Supply Chain Sector Council 2012 HR Study Update.