It is no secret the supply chain management field is short of talent, and acutely short of talent in the areas that matter, such as high-tech and operations management. Schools like Texas A&M University are looked at to supply an ever-increasing flow of graduates into the field. But graduating with a degree is one thing. Graduating with the skills that fit the employment demand in 2017 and beyond is another.
That's where Gregory Heim comes in. Heim, associate professor in the department of information and operations management at Texas A&M's Mays Business School, brings decades of academic knowledge to the very real-world challenge of utilizing information technology to enable more efficient and productive DC operations. Because he works in a university setting, a large part of Heim's work involves nurturing supply chain management (SCM) talent and positioning students to prosper in a field that requires operations know-how and interpersonal skills along with IT knowledge.
Heim recently spoke with Mark B. Solomon, DCV's executive editor-news, about his mission, the opportunities that await young people and the obstacles that impede the academic-business pipeline, and why he calls himself an "IT curmudgeon."
Q: Can you describe the areas of research you are currently focusing on?
A: My research examines the impact of IT on manufacturing, service delivery, and supply chains. I studied e-retailers for my Ph.D. Later, I analyzed manufacturer ERP (enterprise resource planning) performance, collaboration IT for product development, RFID (radio-frequency identification), and retailer systems. After years of teaching my "IT for SCM" course, I realized that key topics were not being addressed. I wrote cases on CPFR (Collaborative Planning, Forecasting, and Replenishment), cloud services, "big data" analytics, warehouse management software, transportation management systems, electronic logging devices (ELDs) for trucks, and others.
Today, I am a department editor for technology management at the Journal of Operations Management. We encourage researchers to study manufacturing and logistics technologies such as 3-D printing, drones, driverless vehicles, and multimodal tracking.
Q: Technology's impact on supply chains has been profound. In some cases, the technology has sprinted ahead of the users' ability to fully utilize it. What are the main challenges for companies in getting their arms around technology?
A: An irony of technology management is that once managers resolve one set of process problems, an even more fine-grained level of precision and technological detail might need to be considered. I try to ensure that students recognize these issues are part of a non-ending cycle, so they will appreciate the difficulty of the task.
I hope students realize that technology choice and implementation activities are extremely challenging and human-impacting decisions. I cannot provide students with answers for all future IT project challenges. Yet if my students gain an appreciation of, and respect for, the many managerial challenges, they can be responsible managers who will reasonably address such challenges.
Q: What is the most important effect that e-commerce is having on facility design and operations management?
A: Modern e-commerce customer expectations and delivery requirements appear to enhance the pain of existing facility pain points. During my Ph.D. research in the late 1990s, I studied e-retailers in the food industry. The facilities we toured had simple layouts. The startup operations were not huge. E-commerce operations were designed to be separate from regular operations. Executives envisioned e-commerce division IPOs (initial public offerings). The scale of e-commerce often didn't match the rest of a firm's operations.
Early retailers that built well-integrated omnichannel systems have become difficult to catch up to. The e-commerce operations having troubles today suffered from design problems that have led to classic IT silo challenges. When touring traditional retailer DCs, I have seen such issues manifested as piles of packages hand-picked from the racks, waiting for carriers to pick them up for delivery to e-retail customers. The pile of e-commerce packages is a signal to me that the assumptions surrounding facility design and operations management should be reconsidered.
Q: There has been much discussion about the dearth of talent entering the warehouse/DC world for system design and maintenance. Has there been progress in increasing the supply of talent to meet the demand? If not, what needs to be done?
A: Universities have seen a huge increase in student interest in supply chain management jobs of all sorts. A decade ago, our program had 15 students. After the Great Recession, industry wanted more SCM hires. Students started to check out the field. Now, we have 350 to 400 students. Probably half take jobs in SCM system design and maintenance. The SCM major has the second-highest average salary at our school. We joke that it happened because we are great professors. However, this phenomenon has occurred at many universities.
Despite all that, we still face challenges with regard to staffing warehouse and DC managerial positions. Federal rules limit our ability to share student names and data with hiring managers. Companies hiring for DC positions offer below-market salaries, don't provide much training or a career development path, want guarantees that students will stay a long time, and want hires to immediately manage huge numbers of forklift drivers or pickers/packers.
Q: What is the blowback, and how can it be prevented?
A: Employers scare away potential hires. New hires are overwhelmed by lack of training or mismatched expectations about job responsibilities. It is a very competitive marketplace for warehouse/DC and SCM talent, even with larger talent pools. Students today spread word quickly via social media about what a company offers (salary and training). If it is below par, they move on en masse to other opportunities.
To address the situation, firms might create long-term relationships with targeted university programs. Many SCM professors love to create such relationships because it means career opportunities for students. Yet hiring managers show up irregularly, or they terminate a relationship if they have an instance where a new hire leaves. Doing so impedes the conversations regarding students who are truly appropriate for a DC position.
Firms might also develop training programs specifically for warehouse/DC system design and maintenance. Really, such positions are exciting internal consulting roles. Students recognize the value of learning that takes place during such a project. Hiring managers could communicate that value to students in an enticing way.
Q: Those entering the field today have grown up around all things digital, including commerce. Will that play a role in their ability to master the fulfillment work that relies so heavily on technology?
A: Today's generation has a very different IT experience due to its immersion in consumer technology. Students are more open to and familiar with emerging technologies and digital services. For the most part, they are technology optimists and pragmatic users. I expect these perspectives will lead to very different ways to buy, build, and adapt to workplace IT systems. It will also be a key factor in how they approach the management of fulfillment systems.
It's impressive how many of today's students, when asked to brainstorm solutions to an SCM problem, divine very creative potential solutions. While they are perhaps a little naïve about how easy it is to get new IT systems to work in a diverse corporate environment, their innate comfort with technology shifts, social IT, mobile IT, and instant messaging sets them up well for flexibly adapting SCM systems to ongoing structural changes in world economies.
Q: Do you see 2017 as the year when "disruptive technologies" move beyond the discussion board and into implementation? If so, what are one or two technologies that will change the game this year?
A: I'm an IT curmudgeon. I'm old enough to have experienced many waves of claims about "disruptive technology." Some of the IT has been "emerging" and "disruptive" since the 1990s. Many so-called disruptive technologies seem to be VC (venture capital)-funded nonsense, searching for a use case and hoping for an IPO. Academic researchers define "disruptive" in a scientific manner and only truly know what was disruptive after the fact. So I'd be pandering if I made predictions.
Q: What technology is overhyped?
A: All technology is overhyped to some extent. One principle I try to convey to students is to maintain a healthy skepticism about vendor and consultant promises. Many sell IT simply to book business. They focus on hype rather than on genuine process improvement.
As overhyped, I'd suggest "The Cloud" and "Big Data." Salespeople seem to promote every online service as "The Cloud." Universities promote "Big Data" analytics, when what sometimes is delivered is basic statistics. The principle of caveat emptor (let the buyer beware) applies here. I smirk when I hear consultants say, "We help our clients move their Big Data into The Cloud, and The Cloud then generates..." Few firms have such data. As a researcher, I know how challenging it is to create insights via data analysis. "The Cloud" does not magically do this stuff. Fundamentally, we are talking about human tasks, human research, and human process changes.