The FLA invited David J. Frayer, Ph.D. Director of Executive Development Programs in the Broad College of Business at Michigan State University, to present on:
Supply Chain Knowledge & Expertise Avoiding Obsolescence.
I am very glad to be with you and I hope your conference is going well. Issa asked me to talk to you about how technology can help you enhance your knowledge. It is really becoming recognized across industries and across the globe that the pace of change is really accelerating and as a result we need to reflect on how to remain relevant in today’s environment and continue to invest in our own supply chain knowledge. So I will spend a few minutes explaining some of the things that I see happening in a supply chain environment and then open it up for questions.
As we think about what the concept of supply chain management is really all about what we find is that a lot of people think of supply chain management as a very tactical activity, closely related to and purely focused on saving costs. They think about it as simply ensuring execution. But at MSU, we think about it as a way to link together major business processes within and across businesses in the supply chain to create a high-performance business model. This means that supply chain management is very strategic and it is really about how we think about integrating supply and demand on behalf of our organizations.
As a result we see a great deal of change taking place in the supply chain environment that is going to have a tremendous impact on us in the future. First, we see new technologies emerging. They are transforming not only the way we perform supply chain but also the way we think about supply chain activities. We see new ways in which data and information can transform activities. Things like predictive and social analytics are becoming commonplace and we see how many of the decisions that we used to have to make are now being informed by a much greater data set. We see traditional and non-traditional competitors that are entering our markets and they are driving new business models that are frankly going to define value and the way we think about value as organisations.
In research we are conducting here at Michigan State we hear a lot about the "Amazon Effect." This idea that Amazon can deliver anything anywhere in the world and in a matter of hours or days, so why can’t you in the context of your business? What are the barriers to your business that do not allow you to perform like Amazon?
And then third, customer expectations are really increasing at an exponential rate. We see tremendous change in what the customer wants and we have to segment our supply chains. Customer intimacy is the keyword here, to really focus on unique needs of customers. And, we need to focus on solutions, not just deliver a product or service, but thinking about a bundle of activities to create value propositions for our ultimate customer.
When you think about changes taking place in our market spaces you realize that the education that most of us have received will not sustain us. Your careers have become a race between obsolescence and retirement and increasingly if we do not invest in educating and transforming ourselves, we are going to become less and less relevant to our organizations, our customers and our ability to create value. Many people say they cannot afford to go back to school, they have a family, work, responsibilities. That is where technology comes into place. We see consistent messaging from across the business community that online is actually the preferred learning method.
We have spent a lot of time thinking how our e-learning strategy is going to be, grown by our research and defined by our reputation to improve knowledge. And so we have made a number of significant investments to create skill-driven and knowledge-driven, online non-credit certificate programs and we began moving more of our degree programs into the online space, in particular our Master of Science in Supply Chain Management degree. We are actually bringing unique capabilities and putting together a very authentic, self-paced online learning approach where we try to connect our faculty with those folks around the world who are seeking this type of knowledge.
We have developed a number of non-credit Master Certificate Programs that are basically built from individual courses with individual components. It is available for everyone in the world any time they need it. It should be an enhancer and extender of your existing knowledge.
Issa’s request to me was how can FIATA make world class knowledge available for individuals? As you sit there in the room I am sure you are sharing many insights with the variety of speakers and you should be thinking: What does this mean to me? How does this enable me to ensure that I remain relevant to my organization? And so I would now like to open the microphone and hear from you what this accelerated pace of knowledge really means for you.
Questions and Answers Section
Issa Baluch: Ladies and Gentlemen, time for question and answers here. Who wants to have the first shot.
Mark Bibeau: I’d like your view on the omni channel e-comm learning-transfer-knowledge and credible information for our industry where they can actually get a snapshot view and understand the pit-falls or the cost accelerations that no one can really put a true price on when it comes to fulfillment on onmi-channel.
Dave Frayer: Excellent question. We are actually engaged at the moment in a major research project looking at the future of integrated supply chain management and what is it that is really driving organizations for the future. And one of the critical issues is omni-channel supply chains and how can companies really think through what it takes. Historically the way we have managed our supply chains is “this is our warehouse distribution channel,” “this is our e-comm channel” and we really have thought in very segmented ways about how to serve customers and yet we are seeing from a customer standpoint a recognition that we want products to be able to come to us and to return back through any one of a number of different channels seamlessly. That creates great challenges. Not because of the fulfillment activity, but because of the way manage inventory, the way we think about our business. So, as we talked with lots of organizations about this omni-channel issue, it has become very clear that companies are needing to step back and say “how do I understand inventory, how do I define inventory, how do I track inventory, and how can I really rethink my distribution network to allow product flow seamlessly between different customer types and sets?” Now the question you have asked is “how do I get credible information about what to do? How do I understand the real cost implications?” I love to tell you that a definitive study has been done on this and all you need is to look it up and it will give you all of the answers. From the research that we are doing at MSU, quite frankly, even the innovators are literally going through these activities with almost limited visibility and limited insight into what the true cost implications are. However, what they recognize is that customers don’t really have a choice and therefore they are trying to figure out what’s the right flow.
Dao Ratanachinda: Regarding the Logistics and SCM Course that you offer I wonder if this is a pre-access course for a Master or PhD Programme?
Dave Frayer: At MSU, we have divided our courses into two categories: those that are really knowledge, skill-driven and those that are degree-driven. Our certificate programs do not have graded assignments, they are really designed to convey knowledge and information that you can use in a practical way in the context of your job. Academic degrees have greater assessment requirements. Degree programs are something very separate. You can enter a certificate program regardless of your previous education. Degree programs require a long application process and admission. We find that in the global space, that’s a barrier. So, we try to create two separate pathways, one that leads to a degree and one that leads to certificates. They are not really transferable.
Stanley Lim: Thank you very much, Professor. You gave a good overview. You mention about customers and companies, I would like you to elaborate the type of organizations that have subscribed to your course.
Dave Frayer: What we have found is actually very interesting. Roughly 15% are international students, a nice diverse group. The rest are coming from US locations with large corporations. But then, we also have lots of individuals who sign up because they have recognized a skill gap. We have consultants, freight forwarders, all sorts of functional roles among our students. It is really a very diverse audience. From several sectors as well, reflecting all different parts of the supply chain. We try to do a one hour live discussions where we start to see the diversity.
Issa Baluch: A follow-up question on the "Amazon Effect." They are now a competitor of ours. That was a surprise, at least to me. What about you?
Dave Frayer: I would love to tell you that we saw it coming. We certainly did not see it coming. We did actually see how it is a function of history. Every time you see a particular commercial format, whether retailer or manufacturer, become a very dominant player you know that other people will enter the market place and are going to attempt to disrupt that business model, the customers and the success that it’s having. For years at MSU, we were focused on retailer dominance, e.g. Walmart. The question kept emerging what is the alternative to Walmart? We saw suppliers to it becoming really dependent. You ask the question, what is next? What will disrupt the traditional Walmart retail channel? Well, it is online shopping. And what Amazon has done is to take online shopping and turned it into a robust business model. We can see this historically. For example, around personal computers. The question is, what is going to disrupt Amazon? The reality is something will. Someone will come up with a better way to deliver customer value at some point in the future than what Amazon is able to deliver. They are becoming a dominant retail consumer player, a much larger player in the commercial space with business to business transactions, we didn’t expect that. We are talking to a lot of large industrial firms who are terrified of Amazon. You know they are not competing directly with them but they see the potential. Then of course they are moving into the logistics and transportation space, they have decided that the FedEx’s and UPS’s of the world don't have the capacity to serve their peak demand and they are taking control. All of these things are suggesting huge investments by Amazon to support its business model. So, one of the threats is a new market player saying, “I’ve got a better way. You do not have to have all this investment to be successful.” We do not know what it will be, but we see it coming. And I think the differentiator of our online program from a lot of the other online programs available is that we are focused on strategic issues. We are trying to help people think through: What does this mean? How can I think more strategically? How can I be more proactive in how I think about our business, our business processes, our value proposition, what customers are looking for, and really think about ways to deliver it? I can’t tell you today who it is that is going to disrupt Amazon, but I guarantee someone will. Maybe it is 3D printing. You all say that is never going to happen, that it’s too space age. But I tell you, we have companies today printing food using 3D technology. This is the type of thinking that we are trying to embed in participants.
Francesco Parisi: When did MSU offer the first online course? Where will the utilization of online courses grow more in the world?
Dave Frayer: Our first movement into this space was in 2012. Since then we have dramatically expanded in several subjects. We have a broad portfolio. Regarding your question about the future, it is a difficult question because we are not so sure that online learning is driven by a particular country or region. We think it is much more driven by the business needs of the people. As businesses around the world move into new regions that creates new demand. Online learning is driven by business needs and where business is happening around the world. Probably over the next decade it will be Africa. MSU is making significant investments in this region. Learning there is going to be more capacity building before it becomes more sophisticated. There seems to be less willingness to invest in a generic program, as a business. It is pick and choose, selecting specific elements. Supply chain space serves unique customers, learning will also see much more individualized learning to identify individual skill gaps and fill those gaps. Progress is happening in this direction. You see it with the millennials today, they want to learn what they think is relevant.
Issa Baluch: Why should FiATA Members look at MSU for these courses?
Dave Frayer: There are a lot of options, I am not going to tell you we are the only ones. The unique differentiator is we take a very strategic orientation to how we teach and define supply chain. Very value and customer driven. Not about learning facts or individual skills, its is really about how you think about supply chain, how you create greater value for your organizations. One of the disruptive forces takes a unique ability to understand supply chain management and transcend individual decisions. We work with people all the time whose view of supply chain management is focused on execution. If that is all you are focused on, others will come and take advantage. What Issa is creating at the FLA enables you to think differently. Information is found anywhere. But you need to think about the implications and how you can take them and create greater value. This generation of people is used to finding answers in Google. But we also need to learn how to think.
Issa Baluch: Thank you so much, it is highly appreciated. Let’s give a round of applause.
Dave Frayer: Thank you Issa. The work you are doing is phenomenal. At the end of the day all we really have is the knowledge and capabilities of our people. I hope this was a valuable discussion and enjoy the rest.
The bio of Dr Frayer is herewith shared:
David J. Frayer, Ph.D. leads a group responsible for design, development and delivery of executive and professional education programs and two executive education and corporate learning facilities (The James B. Henry Center for Executive Development in Lansing, Michigan and the Management Education Center in Troy, Michigan). In addition to these responsibilities, he also co-directs the annual Purchasing and Supply Chain Management Executive Seminar in June each year. Prior to assuming these responsibilities, Dr. Frayer was involved in The Global Procurement and Supply Chain Benchmarking Initiative, a thirdparty procurement and supply chain benchmarking effort involving over 200 companies worldwide. He received his Ph.D. in marketing, logistics and international business at Michigan State University and previously received his B.A. and M.B.A. in marketing from Michigan State University. Prior to returning to Michigan State University for his Ph.D., Dr. Frayer was part of a product development staff group at Ameritech Publishing, Inc. (Troy, Michigan). Dr. Frayer is a co-author of Best Practice Model for ECR Alliances: Guidelines for the Development, Implementation and Maintenance of Alliances, a research report prepared for the Best Practices Operating Committee of the Joint-Industry Project on Efficient Consumer Response. He is also co-author of World Class Logistics: The Challenge of Managing Continuous Change, a research-based book prepared for the Council of Logistics Management and New Product Development: Strategies for Supplier Integration, a researchbased book prepared for the American Society for Quality. He has published articles in the Journal of Marketing Theory and Practice, International Journal of Physical Distribution and Logistics Management, Journal of Supply Chain Management, Supply Chain Management Review, Logistics Focus, The Logistics Handbook, The Distribution Management Handbook, The Handbook on Industrial Sourcing and Logistics Technology International as well as conference proceedings at the National Science Foundation, Decision Sciences Institute, Association of Marketing Theory and Practice, National Association of Purchasing Management, and the Council of Logistics Management. Dr. Frayer is a frequent speaker at professional meetings, academic conferences and executive development programs. His research interests include strategic alliances, benchmarking, supply chain integration, global procurement and logistics strategy. Dr. Frayer is a member of the Council of Supply Chain Management Professionals and the Supply Chain Management Council of West Michigan.