Supply Chain Can Make a Difference in the World

Since 2006, Abe Eshkenazi has served as CEO of APICS, a trade association focused on offering research, education and certification programs in supply chain management. Coming from a corporate background as the managing director of the Operations Consulting Group of American Express Tax and Business Services, Eshkenazi arrived on the scene at APICS just in time to see the global economy nosedive into a recession, which eventually resulted in what some refer to as the “always-on” marketplace.

Whereas APICS itself once was focused largely on production and inventory control (the “PIC” in what used to be known as the American Production & Inventory Control Society), since its acquisition of the Supply Chain Council in 2014 the organization has reestablished itself with a focus on helping its members achieve supply chain excellence. The organization currently serves 45,000 professional members in 100 countries, with 190 chapters in North America alone. APICS also boasts that over the years it has certified more than 125,000 professionals in various programs and disciplines.

IW sat down with Eshkenazi at the recent APICS 2017 conference in San Antonio, TX, and learned more about how APICS is helping to prepare the next generation of manufacturing and supply chain leaders.

IndustryWeek: What are the most pressing issues that APICS member companies are dealing with right now?

Abe Eshkenazi: Chief among them is the pace of change that’s occurring right now in supply chain. Whether you’re talking about the technology—artificial intelligence, augmented reality, bitcoin, blockchain— or the workforce development, or the changing nature of manufacturing, it used to be a fairly stable environment. The disruptions that are occurring right now in supply chains—both on the positive and the negative sides, when we talk about disruptions—are having a dramatic impact on the individuals who are responsible for executing and leading and designing supply chain programs.

IW: Are companies ready for these disruptive technologies right now? Do they have the infrastructure ready to take on those kinds of technologies? And do they have the people who can implement them?

Eshkenazi: For many years we’ve trained individuals to be functional and technical experts in their organizations, and that used to be sufficient. Now that’s the price of entry into the field—now you also need the advanced management skills. This is where, specifically to your question, the challenge is: Are we ready for the new technologies? Are we training individuals to apply those concepts and those new technologies?

This is where APICS, on the certification side, focuses on business-accepted practices on what individuals have to know on their jobs. We’d like them to be aware of other issues, but what they have to know are the things they apply on the job. And we’re not seeing, for instance, the implementation of AI and blockchain just yet. Across the industry we’re seeing it at the forefront, sometimes the bleeding edge, but the certifications are not bleeding-edge. The content we have is to enable an individual to not only get a job but to succeed on the job.

I can use the analogy of sustainability. Back about 10 years ago, sustainability was a “nice to know” for a lot of supply chain professionals. Today, it’s a “have to know.” So when we take a look at the new technologies, I think many of them are at the “nice to know” stage, and it’s good individuals have an awareness of them, but they’re not a “need to know” right now. I think, though, we’re seeing a very short transition period from the “nice to know” to “have to know,” specifically when it comes to AI, and the impact that digitization and technology and the Internet of Things are going to have on the supply chain.

We can also extend it to the consumer because it used to be that the organizations were the ones that designed and implemented supply chain solutions, and the consumers were the beneficiary of the supply chain. Consumers now are much more aware of all aspects of the supply chain—will they care about where the products are made? Will they care about how it’s made? Will they care about how it got there? The simple answer is yes. The new consumer does care. And so they’ll start impacting supply chain through their purchasing and buying power and their brand selection.

The technologies and the availability and transparency of information are going to have a dramatic effect on supply chain in the future. The question is: Are supply chain professionals prepared for that? I’d say, not yet. We need to get more alignment with the organizations in terms of their willingness to be more transparent, and then that’ll start to drive into the knowledge base for the individuals and the workforce to say, “Ok, I now need to be aware of AI or augmented reality or blockchain, and the impact they have on the supply chain.”

So it goes back to your first question: The pace of change is much shorter right now in terms of implementation and impact. We’re not looking at 5-10 years to realize the impact of the changes.

IW: Define APICS’ role right now. Who are its members? What types of people are applying for certifications?

Eshkenazi: If you roll the clock back, probably 15-20 years, I’d say 95% of the individuals that came into supply chain as a career did not graduate from a program that had a supply chain focus. Back in 1995 there were probably a half-dozen to a dozen schools in the world that taught supply chain. Now there isn’t a school that has any credibility that doesn’t teach supply chain. So the difference is that the individuals graduating right now are coming into the workforce with supply chain awareness and background.

The majority of individuals that are in middle management and senior leadership roles right now came out of a very different environment. The challenge is that we have a workforce that clearly understands supply chain, and a leadership that didn’t grow up in supply chain so the generational issue in the workforce right now is having a dramatic impact. You can see it with the students here at the conference—these are individuals who know supply chain and are ready to execute on it. The question as to whether the schools are teaching them the right things, and how much do the companies have to train them after they hire them—we can leave to another time.

The workforce is coming up much more prepared and aware of the impact of supply chain, and are looking to make a difference in their organizations. They want to be out front. In the past it used to be okay to be in the back office. It used to be okay just to do your job. You didn’t have to worry about the rest of the organization. That’s not the case anymore. You need to align with the supply chain strategy

No company worth its salt right now doesn’t have a supply chain strategy to differentiate themselves in the marketplace. Whether you talk about Amazon, Zappos, or Walmart—these are supply chain organizations. They’ve found a way to enable and differentiate themselves based on their supply chains. So the awareness of supply chain right now is much higher, but we still need these young professionals to develop advanced management skills in addition to the technical skills that they have.

IW: At what stage in a person’s career would someone typically come to APICS for certification?

Eshkenazi: For certification we generally recommend that an individual work for two to three years in the industry before they come back for certification. I go to a lot of schools and I share with them the salary difference between individuals who are certified vs non-certified. Depending on the certification it can be anywhere between 10% to 25%. When I say that, their eyes just pop open, and they’ll ask, “Oh my gosh! Does that mean I get a raise by getting a certification?” and I say, “No, you don’t. What you do is, you get the certification. You enable your organization to be more successful. Then you get the raise. Then you get the recognition.”

The influence that the certification has and the impact it has on the individuals is significant, but we recommend that they go into the industry for two to three years, get a much broader understanding of the supply chain, see where their interest and their passion lie, and then come back and get a certification. They’ll be a much better student and a much better employee, and a much greater asset to their organization.

IW: Looking at the SCOR model of plan-source-make-deliver and the different disciplines that are covered under the umbrella of supply chain management, would you generally say that APICS members are in one or two of those buckets, or are they spread around through the whole gamut of supply chain functions?

Eshkenazi: In 2010 we laid out a strategic imperative to be an end-to-end supply chain organization because our members were predominantly on the plan and on the make side. That’s where APICS had its roots as an organization. Now we have content on logistics, on distribution, on warehousing, and while there are other organizations that do provide much deeper content in some areas, we endeavor to be an end-to-end organization because individuals don’t stay in one linear function their entire career. They may start in procurement and then go on to production, and then they may go on to logistics. Organizations that are looking for leaders are looking for that broad-based knowledge, not just specific content in one particular supply chain function. So in order for individuals to be that kind of leader, they have to have exposure across the entire enterprise.

I say this often to students: There are two functions in an organization that have to know everything that goes on there: one is finance. Nothing occurs in an organization without finance being engaged. The other one is supply chain. Nothing happens in an organization without supply chain having a role or an impact on it. So we expect individuals to not only understand the entirety of the organizational process but to move into leadership, because they have the capability to evaluate the entire enterprise. We encourage supply chain professionals to get that broad-based knowledge and then to use it. Advance the organization. Stand up. Be a leader in your company.

IW: Do you find that idea is catching on? It seemed like for a long time companies thought they could get everything connected just by hooking it through their ERP system. But it seems like today the message is that technology isn’t going to run your supply chain for you—you have to take charge of it yourself.

Eshkenazi: Absolutely. There’s a keen awareness at the most senior level of an organization that it’s not plug-and-play. ERP systems are a part of the system; they are not the system. Having knowledge workers being able to understand and execute on what is happening behind the scenes in the technology is a critical component of an organization’s knowledge and expertise.

Those organizations that truly understand the impact of what supply chain can be, understand that it’s the connectivity and the integration of supply chain that’s critical to their success. While you may optimize a particular function or a particular technology, you’ll only realize the full value by doing it across the enterprise. So yes, I think leading organizations understand how integrated supply chains drive their business and differentiate themselves in the market.

IW: What’s been the impact of the push toward corporate social responsibility / sustainability on supply chain?

Eshkenazi: It really came out of the recession where we started to see an inflection point for organizations, and specifically on their supply chains. Sustainability used to be a “nice to know,” and it was more of a public relations statement than it was an actual impact that you can monetize. And right now you’re seeing organizations view sustainability as responding to disruptions both geopolitical as well as environmental.

When you speak in terms of the balance between margin and mission, organizations are finding that they have to have both. You need the margin to enable you to do the things to support a sustainable organization—no margin, no mission. That’s clear. But organizations also understand that they have a higher responsibility besides just the margin. They’re a corporate customer, a corporate citizen, as well as a consumer-driven or consumer–responsive organization. This goes being conscious of the impact you have on the environment as well as on people. I think organizations do care and they are recognizing that sustainability offers them a monetary advantage in the marketplace, not just the mark of being a good citizen.

IW: What’s been the biggest challenge you’ve seen coming from an organization like American Express to APICS?

Eshkenazi: Having consulted with dozens of associations before, both philanthropic as well as educational and healthcare associations—one of the things that stands out in associations is passion. You can see it in healthcare associations—nurses, doctors, individuals who treat children—they have a passion for what they do. So the question I had coming into APICS was: How do you get passionate about supply chain? How do you get individuals to embrace and make supply chain huggable? Through my first few years I saw it as a function: If we can enable supply chain, we can enable people. But then it really dawned on me that we can make a difference in the world—that supply chain can make a difference in the world.

It finally occurred to me how to do this. I didn’t come to APICS to develop a better supply chain. That’s not my background. What we do is develop people. People enable their organizations to be successful. It enables their careers. It enables them to lead in their organizations. And it enables their organizations to be successful.

Successful organizations develop successful economies. Successful economies develop better lives for people. So we can connect what we do, as an industry, to making a difference in people’s lives, and that’s what keeps me going and that’s what drives me. Every day I wake up and I think I’m going to change the world. And when we don’t get as far as we need to or want to, tomorrow we get another chance. And that’s what really drives me in this organization is that we get to make a difference in the world. Supply chain professionals do make a difference in this world.