By Frank Quinn, Editor

Supply Chain Management Review

October 1, 2006

For close to 50 years, Dr. Donald J. Bowersox has been in the forefront of our profession. In the early 1960s, he was advocating advanced transportation and logistics practices as an executive for the Railway Express Agency and E.F. MacDonald Company. He was there at the beginning of the National Council of Physical Distribution Management, the organization known today as the Council of Supply Chain Management Professionals (CSCMP), as a founding member and as the group's second president.

Bowersox was also among the early evangelists who spread the word about the business value of logistics, and later supply chain management, through such breakthrough books as Logistical Excellence: It's Not Business as Usual and World Class Logistics: The Challenge of Managing Continuous Change. And in his 40 years as an educator, he was often the first person to open the eyes of a student, practitioner, or corporate executive to the potential of logistics and supply chain excellence.

In short, he's been one of the most influential and prolific voices in our field. In addition to the two books just mentioned, Bowersox has authored more than 150 articles on marketing and supply chain management and is the author or co-author of more than a dozen books. He has consulted for many Fortune 500 companies and has lectured and taught logistics internationally in more than 20 nations. His enduring association, of course, is with Michigan States University (MSU), where he joined the business school faculty in 1967 and also served a term as dean of MSU's Eli Broad College of Business.

Bowersox's far-reaching contributions to the field — and the people working and studying in it — have not gone unnoticed. His awards and tributes fill pages. But two deserving special mention are the Distinguished Service Award presented by CSCMP and the MSU Distinguished Faculty Award.

Now after five decades as educator, author, practitioner, and consultant (to say nothing of a stint in the U.S. Air Force as a pilot), Don Bowersox is retiring…well sort of. He'll participate in executive seminars both at MSU and aboard; he'll be working on a new book; and, in his words, he'll “continue delivering the message of how supply chain excellence contributes to corporate success”.

SCMR Editor Francis Quinn recently visited the MSU campus in East Lansing, Mich., to speak with Bowersox about his views on the past, present, and future of supply chain management.

Q: You've witnessed the evolution of the profession from traffic management to physical distribution to logistics management to supply chain management. Where are we headed next?

A:

It's difficult to predict in terms of the transitions we've seen in the past. There's still a lot of work to be done, that's for sure. But from the standpoint of organizational structure, I honestly believe that we may be at the end of the road. The job of supply chain is clearly a senior management challenge, and it's one that sits right alongside the other C-level jobs in the corporation. We may call it something different going forward, but basically it will remain the stewardship of moving products from the material origin points all the way through the process of conversion to the end consumers efficiently, effectively, and relevantly. That challenge is a big one and will continue to be for a long time. So I don't see a next organizational evolution. Instead, I see the supply chain manager becoming more deeply involved in the corporate strategic initiatives and being part of the C-team management.

Q:What about the traditional functions that take place within the broader supply chain process?

A:

They will be important as ever, maybe more so. There still is a traffic management job, for example — we don't want to forget about that. As a matter of fact, the most common calls I get are from companies looking for people who are accomplished in very specific functional areas like warehouse management, transportation management, customer service management. And there still is a tremendous need for logistics executives within the supply chain. In fact, our annual seminar here at Michigan State is designed to improve the managerial talents and knowledge of logistics managers within the framework of the supply chain organization. So simply because we have higher levels of integrated management responsibility that doesn't mean we can neglect the functions.

Those functions have to be performed in an excellent manner or we aren't going to have a good supply chain. I use a football analogy a lot in the classroom. I remind the students that the blocking and tackling opens up the hole for the runner to see or protects the quarterback to throw the pass. If you don't have good blocking and tackling, you're not going to have a good team. The functional areas of the supply chain, drilling all the way down to the jobs within traffic, are the blocking and tackling. They are still very viable — and they have a lot to do with career progression.

Q: Do you feel that the supply chain and logistics folks have finally gained the respect of top management?
A:

I don't think that's a mission accomplished to date. A big reason is that in most cases top management doesn't really understand what we do. When many of these executives went to college, supply chain courses weren't generally part of business school curriculum. They did not have the benefit of learning about integrated management across the supply chain. What they did learn about the supply chain came as part of manufacturing, or purchasing, or logistics — but not as a process that can be part of a corporate strategy.

That's gradually changing. For the last decade and a half, we've had more people breaking into the senior management ranks who have spent legitimate time in supply chain management or have studied it in school. But until we have more of the senior people who have had the benefit of formal training and work experience in supply chain, there will be companies that still don't quite get the opportunity that's there. This will take a while. But I predict that over time, supply chain management will be on a par with finance and marketing as strategic parts of the corporation.

Q: When do you see that happening?

A: It will probably take another decade before this becomes commonplace in most organizations.

Q: If you're not lucky enough to work in a company where top management understands and appreciates the supply chain, what can you do to get their attention?

A:

This is a huge opportunity area for supply chain professionals. Most senior management that I’ve had the pleasure of knowing over the years are very searching people. They’re always searching for new ideas. They’re very intelligent, well-educated people. They’re individualists who are looking for ways to create meaningful differences in their businesses. If a good business case is made for supply chain management, they will listen to it. But when that doesn’t happen, quite frankly, I put the blame more on the incumbent supply chain leadership than I do on the senior management. We have a tremendous story to share. There are great success cases. There are also significant business disruptions that can hurt a company when the supply chain mission is not executed properly. So there’s enough evidence, case studies, and books and articles to help make the business case.

Q: You wrote an article for us a little while back about the need for supply chains to make a "digital transformation." [See "The Digital Transformation: Technology and Beyond" from the January/February 2005 issue].
Would you elaborate on that?

A:

First off, I’m convinced that this is more than a supply chain issue; it’s a corporate survival issue. It’s all about reinventing the totality of businesses to operate in the Information Age as opposed to the Industrial Age. Obviously, the supply chain is part of this, but it’s much broader than that. Most of our "best" business practices were invented to overcome problems that we fundamentally don’t have anymore.

These problems were associated with closing the Western frontier or overcoming resource scarcities in certain areas or creating a distribution system that kept food from spoiling. From the Industrial Revolution forward, we developed a business approach that said if we overcame these challenges in an excellent manner, the end result would be an increasingly more efficient operation.

We rode that wave from the beginning of the Industrial Revolution through the era of mass production. But by the late 20th century, it became obvious that we had a whole new set of capabilities — the computer and then the Internet — to move the business forward. But we underestimated the power of those capabilities. We fundamentally saw them as ways to do those old things even better. But seldom did people stand back and say those old things may have lost their relevancy.

What are the new things that we might do?

Within almost all of our corporations, from the Industrial Revolution forward, we’ve focused on building excellence into the individual jobs themselves because we didn’t have the wherewithal to really look at the processes. But it’s more than business process engineering.

It’s really answering the question, what value does this activity add? If it doesn’t add value to our customers, then why do we do it? What is the purpose of our business? Our business is to attract, retain, and satisfy customers. That’s how you retain market share, increase profitability, and grow over time.

So the business transformation that I wrote about really starts with the process. Let’s look at everything we do and ask, does it add value to the customers? If it doesn’t, it’s a candidate to be eliminated. And if we eliminate it, then how can we reconstruct ourselves, both process-wise, organizational-wise, structurewise, whatever way you want to look at it so that we can improve our ability to make a customer impact. This is not a short-term journey.

Q: How close are most companies to realizing that transformation?

A:

The digital transformation means having a systematic plan to continuously reinvent yourself so that at some point down the road, maybe a decade away, you will be an Information Age company and not a dinosaur left over from the Industrial Age.

There are some icons that are clearly starting the journey. IBM is an example. IBM’s management is stepping back and looking at their human resources in an entirely different context — that is, they’re looking at them in terms of value contributors. They are moving away from thinking about their people in terms of jobs or functions or belonging to a particular division.

Q: Are there other examples of successful transformations you could site?

A:

Wal-Mart’s another good example. They stepped out of the mold of the standard retailer and recreated retailing in the image of the technology that had become available at that point in time. They didn’t want to do things the way other retailers had traditionally done them. Now Wal-Mart is seriously developing the next model of what retailing is going to be. They are not at all convinced that it’s going to be the kind of store that they’ve had so much success with already.

Q: To succeed in this new age, do you think that professionals in our field will require formal training in supply chain management as an undergraduate or graduate student?

A:

We’ve had a fair amount of discussion about this over the years. The first thing we need to do is define what you mean by formal training. If I have a degree in transportation, do I have formal training in the supply chain?

How about if I’ve taken courses in manufacturing or purchasing?

But going beyond the definition question, my basic position today it that is doesn’t matter whether or not you’ve had formal supply chain training. The reality is that education is a life-long process. So the number-one priority is to be a continuous learner. That continuous learning can be self-driven, which includes extensive reading of journals and books that explore the field of supply chain management.

It can be online through the Internet. Or it can be obtained by going through any one of the wide variety of structured courses or executive seminars that are available. We offer a wide range of supply chain courses at Michigan State as do other universities across the country.

Q: Are there any specific developmental areas in which supply chain professionals should be focusing?

A:

I'm tempted to answer your question by saying, yes I think they should all learn more about technology. But the truth of the matter is that what you need to know pretty much depends on what you don’t know. Some managers, for example, ought to know more about geography and world history. They may know an awful lot about executing the ABCs of logistics operations but know very little about the culture and how people think in different economies around the world. This will be crucial knowledge for supply chain managers seeking to move up to more senior management positions.

Q: Let’s discuss executive education specifically. What’s the role of executive education in supply chain?

A:

Executive education is extremely important. Maybe it’s named inappropriately because executives are educated and they can educate. But the real objective of executive education is to create a forum in which they can be stimulated by new thinking and they can share their experiences.

It’s a really fine balance, and it’s got to be more than a bunch of executives getting together and talking. I’ve observed situations where an inexperienced teacher will let the executives run away with the subject and the classroom. Now, they maybe talking about interesting things, but they’re not relevant to the subject at hand. The instructor’s job is to make sure that things stay focused.

In my executive education classes, I emphasize that we’ve progressed to the point where we now have a supply chain theory. And as Peter Drucker reminded us many times, when you finally have a theory, you’re able to understand causal relationships — you can see the relationship of the parts to the whole. You can predict certain inputs, outputs. You can move the discussion from the purely descriptive to an analytical — and I will use his word — theoretical framework.

What attracted me to the field initially was that in marketing we talked about a great deal of seemingly important things that couldn’t be quantified. But in logistics or physical distribution, we talked about location, we talked about time, we talked about physical assets, and we could quantify them all. That’s what really attracted me to the field: I saw the potential for measurement.

Q: With regard to the younger people, the undergraduate and graduate students, do you see any major differences between the students entering the field today compared to when you first started teaching?

A:

To answer that question properly, I have to go back to my days as an undergraduate in liberal arts in the fifties.

Back then the prevailing attitude about business schools was that it was a place to go and learn an applied trade, a higher level shop skill if you will. And the people who went into business weren’t necessarily candidates to be Rhodes Scholars.

After I came out of the Air Force and entered into a Master’s in Business program, I noticed that things had changed. The MBA was starting to gain real prominence.

The business schools went from being the place you went if you couldn’t get in anywhere else to being one of the hardest colleges to get into on campus. The quantitative requirements — the math, statistics, computer science — began to parallel those required for the engineering courses. The grade point averages and test scores for business undergraduates and graduates were among the highest on the campus. I’ve had the pleasure of teaching in business schools for a lot of years. I’ve become used to having excellent students, and I’m proud of what many of those students went on to accomplish in industry and government.

Having said that, the composition has definitely changed.

The students have retained their academic excellence, but we’ve seen a shift from people who were fundamentally interested in behavioral matters to people much more interested in the quantitative things. So we’ve had an increase in the amount of applied mathematics in the business schools, and that’s come hand in hand with the technology.

Q: What about the demographics of the classroom?

A:

That’s changed, too. In my earlier years of teaching, most all of my students were the first in their families to have gone to college. But in my later years, almost all of my students’ parents were college-educated. And many of these students were the second and third children in the family to go to college. So that changed their approach and sophistication about college.

In the logistics and supply chain field in particular, we began to see a steady increase of females and minorities. Today, a typical business school class looks pretty much like a snapshot of the American population. Overall, today’s students also are better prepared than they used to be. Coming into the classroom, they have more experiences in their life.

We also have far more liberal cross-pollination between cultures and more and more students traveling abroad. At Michigan State, we encourage students to take advantage of an experience overseas at some point in their studies. There are many overseas programs available. Our professors also travel to other countries and conduct classes there. So you may have a situation where a Michigan State student is taking a class from a Michigan State professor in a university abroad.

The students are gaining valuable experience from living in another culture, visiting other countries, going on field trips, and also learning from instructors from those other cultures.

With regard to cross-cultural learning, I’m always in wonderment of my foreign students who come here to study in what for them is a foreign language. For example in our recent M.S. course where I teach the lead supply chain class, we had four students from overseas whose native language was not English. I was impressed with how they could take in everything that was given to them in English, process it in their own language, and speak or write a response in English.

It makes me wonder whether we’ve really let ourselves down in this country in the long run by relying on the fact that English is the universal business language.

Q: Have the types of jobs these students are entering into changed as well?

A:

The pace is a lot quicker today. There are various career tracks, and the really aggressive companies are setting up challenging entry scenarios for the students. The new hires come in and rotate through a variety of jobs, giving them experience in different areas — and not just within the supply chain. Increasingly, we see young people being transplanted within major areas of the company. They might spend some time in sales or marketing or finance because the company is not really hiring a transportation, or logistics, or supply chain specialist, but rather a future leader. And to be a future leader, you need to learn the business.

Companies have progressed dramatically in terms of how students are accepted at the start. And if there’s a problem in a particular organization, the word gets out. There’s nothing stronger than the network of big brothers and little brothers, cousins, and fraternity brothers. These kids talk, and in today’s world with the information technology of the 21st century, they talk continuously, in real time, in chat rooms. So if a company really goofs up with a couple of young people, I guarantee you that other people in universities across the United States hear about it. It’s a society where the benchmarks are pretty clearly written.

Q: Is logistics and supply chain management a good field for young people?

A:

It’s good, it’s growing, and it’s getting better. It’s our most popular major today in the business school at Michigan State.

Q: Looking beyond Michigan State to other institutions as well, how would you assess the state of supply chain education overall?

A:

It’s improving continuously. More schools have introduced programs and at a faster rate than probably any other discipline in recent history. In fact, most schools today have at least an introductory supply chain course. In addition, more and more schools are offering degrees in supply chain. In the state of Michigan alone, we have four or five different universities that offer supply chain degrees. That’s just in one state, so think about what’s happening across the United States. The students are coming to this field because they see the opportunities.

Q: What do you see going forward as the role of professional associations in the development of the profession generally and the individuals in particular?

A: The association’s role will be to continue to serve as beacaons of the relevancy for their disciplines.

They will need to foster a broad understanding of the discipline and its contribution to society. They will also need to continue providing forums where practitioners can share and debate different issues and directions for the future. When the associations venture into the field of professional education, I think they may be on shaky ground. I’m not sure that they’re really well-positioned to be educational organizations. Of course, I’m biased on this point. But I think we can learn from the experiences of other disciplines such as medicine.

What role does the American Medical Association play? What role do the journals play? What role do the medical schools play? They all seem to do best when they stay in their own domains.

Q: Is the networking component of the professional associations still as strong as ever?

A:

I don’t know. I'm not a blogger or a chat room person. But I’m finding that more and more people are sending me e-mails and asking if I will get in a chat room to talk about a specific topic. The most recent one that I’ve been asked to join is a global business chat room. Each week or so, this particular chat room will address a different subject where academics and business leaders around the world will share their opinions. It’s foreign to me, but I’m learning the relevancy of this kind of networking. In any case, the younger people in our field are very comfortable with this mechanism.

So is networking via the associations in the sense of gaining knowledge as important? Maybe not. But networking in the sense of knowing a person and being able to pick up the telephone is just as important as ever. Countless times over the course of my career, I’ve brought together people who I met through CSCMP who had knowledge in one area with others who could benefit from that knowledge.

I could not have done that had I not networked though the association’s roundtables and annual meetings.

I don’t know for sure what’s the right course of action for the future for any of these organizations. But I do know this: If they don’t add relevancy, if they don’t make a value contribution, they will not exist for very long.

Q: Let’s circle back to our earlier discussion around the leading companies. Could you talk a little more about who you consider to be today’s supply chain leaders?

A: Ten years ago I would not have had much difficulty answering that question. But now it’s becoming harder and harder for me to make those assessments because it seems like we have created so much information and misinformation about everything.

Sometimes I’ll read about a company that supposedly is doing all these great things. But I know for a fact, either because I’ve worked with that company or worked with carriers serving that company, that what’s written in the article doesn’t match the reality. The company might be having a serious customer service issue or a longstanding operational problem. It just seems like we’ve gotten to the point where some people believe that we can talk our way to success as opposed to perform our way to success.

So I’ve become far more reluctant to spotlight particular companies because the challenges are greater today and they all have vulnerabilities. But as I look out, I see companies starting this transformation we talked about earlier and beginning to work their way through to a new level. IBM, for example, has made some remarkable progress in reinventing their company and their supply chain operations. Motorola’s doing some important work to restructure their business as is Kroger in their business sector. I see Publics Supermarkets moving forward on new business propositions that are beginning to challenge some of the mass merchants. I look at some of the stuff I see going on at Home Depot and I really think that that’s exciting. I’m very impressed with some of the supply chain initiatives that Toyota and Honda are undertaking.

Look at what Whirlpool is doing in terms of how they’ve integrated Maytag and reinvented their whole supply chain. The focus at all of these companies is on continuous improvement, continuous progress.

When you look at the pharmaceutical sector, Johnson & Johnson comes to mind as a supply chain innovator. In consumer goods, Procter & Gamble always manages to stay on top of the bubble. They are willing to take a program like streamlined logistics that was already leading edge and then totally reinvent it.

So they end up creating a new approach that has an even bigger impact than the previous breakthrough. Another company that I would put in that category is Kimberly-Clark. Since their legendary CEO Darwin Smith left in 1991, they’ve gone through a number of challenges and transitions. But they’ve always been able to keep their long-standing virtues in place as they change how they go to market and continuously strive to upgrade their performance.

Q: Do you see any overarching commonalities among these leaders?

A:

Yes, they are led by people who are not content with their current level of success. These leaders fully understand the importance of continuous improvement and understand what causes failures. They do the right kind of root-cause analysis to avoid or address these failures. Most importantly, they do all of this with integrity. There are stories all over the business pages about companies who don’t do this. It’s too bad we don’t have a similar degree of emphasis on the companies that have been able to maintain their integrity and succeed because there are an awful lot of well run, good organizations out there.

In terms of our particular discipline, it’s going to be harder to point to the supply chain as a differentiating factor as it becomes more closely integrated with the business. The supply chain is part of the success factor overall — the ability to grow and sustain profitability. It is no longer an end in itself.

Q: What’s next for you personally?

A:

I remain committed to contribute to the field in any way that’s possible and that makes good sense for my time, my health, and my family. I will continue to spend some time teaching classes and executive seminars at Michigan State. I also plan to do some overseas teaching and am looking into opportunities in Russia and France.

I also want to do a little bit of writing. For a number of years, I’ve been working on an article on business transformation.

Today, business transformation means a lot more that reengineering. It really involves broader strategic concepts and new performance measures. As part of the research, I would like to spend some time with a company that has actually gone through such a transformation.

So I’ll stay busy. I spent a lifetime on a particular mission — and it’s still not done.

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