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Industry wants you

While salaries across much of the economy remain stagnant, supply chain and logistics professionals are seeing steady growth in pay. The reason: Skilled professionals are in high demand.

Industry wants you

News reports tell the story of flat wages across most of the economy. Logistics professionals tell a different story.

The results of DC Velocity's annual salary survey, where we ask readers about their jobs, career satisfaction, and pay, show that 62 percent of those responding received raises in 2012 and that those raises averaged just under 6 percent.


Not that 2012 was that good for everyone. About 31 percent said their salaries stayed the same, and 7 percent suffered decreases.

Overall, DC Velocity readers are well compensated. Average compensation, based on 977 usable responses, was $108,296. That's up about $2,000 from the previous year's numbers. The median income for respondents—that is, the midpoint of salaries among all of those reported—was $90,000. That means half of those responding make above that number, half below. (For a breakdown of average salaries by position, see Exhibit 1.)

Exhibit 1



Exhibit 2



Exhibit 3



Exhibit 4



Exhibit 5

Opportunities—and compensation—are especially strong for managers and executives with solid experience. "Frankly, just about every search we go through, the top talent generally has multiple opportunities to choose from," says Dave MacEachern, leader of the executive search firm Spencer Stuart's worldwide transportation and third-party logistics practice and a member of its global supply chain practice.

Supply chain professionals are also happy with their jobs and with the profession, according to the survey. Nearly 86 percent say they are satisfied with their careers, while 87 percent would recommend the profession to a young person entering the job market.

Not that the job is easy. About 77 percent of respondents report working more than 45 hours a week, and 39 percent say the amount of time they put in has increased over the past three years.

What makes it hard for many firms seeking top talent is that large companies with well-established supply chain organizations don't let top people get away easily. As Exhibit 2 indicates, it's the large companies that tend to pay best. (To provide as accurate a comparison as possible, Exhibit 2 only looks at the average salary for managers, as nearly half of all respondents are managers.)

It's at those large firms where the best opportunities for advancement lie, and where young and ambitious folks should go to cut their teeth, MacEachern adds.

"There are well-established organizations—P&G, GE, Frito-Lay, Dell—that have really institutionalized supply chain knowledge and where a lot of good people are developed," he says.

Supply chain skills have become so crucial that the chief supply chain officer has, at many companies, assumed the role of chief operating officer, MacEachern says. "That whole role of COO has almost disappeared, supplanted by the chief supply chain officer because now the plants are reporting to supply chain guys, not operating guys," he says.

WHAT EMPLOYERS LOOK FOR
What are firms looking for in supply chain talent? First on the list, says MacEachern, is leadership. "This is a function that as recently as 10 years ago was a fairly technical role, and technical skills were at a higher premium than leadership," he says. "But what we're seeing today is that the supply chain is being elevated to the executive committee and reporting to the CEO. It is very often managing 60 to 70 percent of the cost of goods sold. It is such an integral part of a company's success today. The leadership element—the ability to build a team, the ability to integrate a team, the ability to have that team working together—is so vital."

Those skills now extend to managing third-party logistics service providers (3PLs), a capability MacEachern says will only grow in importance as outsourcing becomes a bigger part of the logistics landscape. "That whole partnership model and the ability to integrate and work closely with third-party providers is huge," he says.

IT skills remain a relevant part of the supply chain executive's resume, according to MacEachern. Given the importance of technology in the modern-day supply chain, no manager can succeed and advance without a strong grounding in that area, he says.

Education pays off, too; not surprisingly, pay escalates with the level of education. Historically, though, even high school graduates who climb to management positions do quite well. That group reports an average salary of just under $88,000. (See Exhibit 3.)

International experience is another must for anyone looking to work at a large corporation, MacEachern says. "Global experience is a given for almost every assignment we undertake. If you don't have exposure and experience working in Asia, China—it's tough to move from a purely domestic role into a global role," he says.

MacEachern says that professionals with an engineering background are in particular demand. "A lot of them go into engineering, then move into the supply chain," he says.

In addition, he urges young professionals with ambitions for a career in supply chain management to spend some time in a manufacturing environment. "If we're building the perfect supply chain executive, you'd almost always like to see somebody that's had manufacturing experience," he says. "Manufacturing has now gotten to the point that everybody's engaged in pretty sophisticated continuous improvement programs—lean, Six Sigma. You get great training from a technical perspective. Moving into leading a production organization, leading an hourly group, is a great way to start a career. You could be 25 years old managing a hundred people who are all older than you. It's a great experience.

"If you decide procurement is your profession of choice, do you need manufacturing experience? No. But manufacturing keeps it wide open for you. A lot of companies want to see manufacturing in the background."

MacEachern suggests that young professionals pursue work with companies noted for their training and development programs. "If you can get in on the ground floor of one of the Fortune 200 or Fortune 300 organizations that have training and development programs, you really are going to give yourself a leg up," he says. "You probably need to make a couple of moves early on to make sure you're getting into the right company. And if you have landed in the right organization, then do your best to move across functional roles. If you're in procurement, move over to ops, move into planning, move into distribution, into transportation. Get some diversity early on. It becomes a little tougher as you get older."

MacEachern admits today's job prospects are bleak for those starting out. But he remains confident in the future of the profession. He says opportunities for logistics and supply chain professionals will only expand as more companies realize they need to improve suboptimal supply chains in order to compete in the future.

In addition, the rapid growth of online commerce demands responsive and efficient supply chains—and the professionals to run them, MacEachern says.

"One of the biggest trends we're seeing is [an uptick in hiring] in the business-to-consumer world," he says. "We're seeing a lot of activity over how to manage the back office. For brick and mortar retailers, most of the growth is coming online. There will be a lot of opportunities for people coming out of master's or undergrad programs in supply chain and logistics."

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