What is more important?
In what areas should a logistics education program concentrate – imparting knowledge or gaining skills?
In my last blog, I mentioned the Trans-Pacific Partnership (TPP) trade facilitation agreement that has been provisionally agreed by 12 countries of the Pacific rim. This is but one of a number of trade facilitation agreements being negotiated between countries, due to the inability of nations to agree on a new multinational round under the World Trade Organisation (WTO).
These multiple agreements will most likely affect regional and possibly global supply chains; but when and to what degree can be a difficult question to answer. So, should logistics students be expected to understand the potential flow-on effects of a trade agreement at some time into the future? In a similar vein, supply chain planning should incorporate factors for countries where business is done, such as:
- population growth and demographic change
- forecast inflation and currency exchange rates
- developments in trade agreement and taxation/duties regulations and
- legal frameworks and cultural influences
Again, there is the question of how valuable for prospective logisticians is an understanding of demographics, finance, law and even some anthropology. The counter argument is that the immediate day job is providing availability of items (materials, goods and services) for customers and this requires skills in scheduling resources, handling specific documents and forms and managing people.
The education challenge
From an employment perspective, the challenge is that new logistics graduates are expected by employers to have ready to use (typically operations) skills, yet if they show promise, be capable of growing into a higher level position that requires wider knowledge to be effective. So, a logistician requires both ‘how to’ skills and ‘why’ knowledge.
This challenge is one that I have been working through with a university in designing a new undergraduate degree in Logistics. An advantage in the development of the program is that a vocational college (community college in America) operates within the university’s structure; this is called a dual sector university.
This enables the program to be structured with Year 1 providing skills; it consists of ‘how to’ units. Study in the following years is the knowledge period, containing the ‘why’ courses. The proposed program has the following themes:
- Logistics Operations: The effective and efficient movement and storage of items is a critical operational aspect of the logistician’s role. The focus of Year 1, is attaining the skills required to provide availability of items for customers. Successful completion of Year 1 awards students with the Diploma of Logistics. This qualification provides direct entry to Year 2 of the program, but also allows a student to enter the workforce with a qualification and the opportunity to resume more advanced studies at a later date.
Supply chains are the environment in which logistics functions; therefore knowledge of an organisation’s supply chains informs, then enables the strategy and defines the framework for logistics operations. Therefore, the following years of the program provide knowledge and skills of supply chains and expand on the competencies gained in the Diploma:
- Supply Network Capability: The supply network of an organisation can be global, complex and fragmented. To better understand an organisation’s supply network requires logisticians to work with customers, suppliers (including logistics service providers (LSP)) and other business parties from around the world. The objective is to de-risk supply chains within the network, through identifying and wherever possible, reducing complexity, which comprises uncertainty, variability and constraints. This requires knowledge of Procurement and Logistics management. The same level of knowledge is required by logisticians working within LSPs, so they can relate to their client’s supply chain team.
- Analytical Skills: Lower cost IT and the availability of relevant supply chain applications means that understanding supply chains is becoming more about analysing numbers – moving items is an outcome of the analysis. Evaluating patterns and trends in the flows of items, money and information will become a critical feature; therefore Logisticians need the ability to analyse numbers. The output from analysis helps to drive planning applications. This knowledge, together with information about customers, suppliers and an organisation’s supply network is an asset to be leveraged by Logisticians for the organisation’s benefit.
- Business Knowledge: In addition to the numbers, Logisticians must use their wider business and general knowledge when making decisions. This requires an understanding of international trade, transport economics, accounting within supply chains and marketing and how these areas can influence the effectiveness of supply chains. The outcome of this study should be the capacity for critical thinking and ability to analyse the acronyms and latest hype associated with supply chains and logistics.
- Business Relationships Development: An organisation’s success is dependent on customers, suppliers and governments that interact within the supply network. Logisticians must therefore be comfortable building global relationships and working with different organisations and cultures. This requires writing and speaking skills to express the organisation’s objectives and ideas.
This university program has a different approach, as students will gain skills in logistics operations and analysis. The level of competence must be to a level that at a job interview the student can confidently say (and demonstrate) “I can do this …”. The knowledge part will come from the capability to comprehend the wider context of supply chains within a network, an understanding of the multiple factors in business and the important element of building business relationships.
Employers like the approach, but only time will tell if sufficient students enrol in the program and employers hire graduates.