Supply Chain Competencies
15 Nov

12 Must Have Supply Chain Competencies

The underlying Supply Chain technical competencies are skills, knowledge, and characteristics that support effective performance as a Supply Chain professional.

 

Given the global demands of supply chains, supply chain professionals should never stop developing new skills and enhancing existing ones.

At SCMDOJO, we strive to make expert knowledge affordable and accessible. Supercharge your career by enrolling in the SCMDOJO Supply Chain Management Learning Track! With courses designed by experts covering all 12 supply chain competencies, best practices and E-books, this is the perfect certification you need to become a supply chain master!

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However, here are 12 core supply chain competencies that they need to master and continually improve (in no particular order!).

 

12 Technical Supply Chain Competencies

 

1.    Capacity Planning

 

Capacity planning ensures that needed resources (e.g., manufacturing capacity, distribution center capacity, vehicles, etc.) will be available at the right time and place to meet logistics and supply chain needs. Moreover, in other words, it focuses on determining the appropriate production levels the company can complete.

 

Do you want all your resources on time? You are in the right place. Kien Leong’s “Capacity Planning” will help you align resources with demand, optimize production schedules, and drive operational efficiency.

 

Capacity Planning Course

 

This also includes capacity planning with suppliers at all manufacturing cells and critical machines/equipment, as well as overall Equipment Effectiveness (OEE) and Sales Inventory and Operations Planning (SOP).

 

Sales and Operations Planning Blue Prints

 

You Should Watch 5 Things to Consider When Doing Capacity Planning for S&OP to learn more about Capacity Planning.

 

 

2.    Demand Management

 

Demand management is the process of determining what customers will purchase and when, in other words, predicting demand. Moreover, good demand management uses qualitative and quantitative methods to use customer data to reduce uncertainty and predict short-term incoming demand for use as input into the Sales, Inventory, & Operations Planning (S&OP) process.

 

To learn In-depth about How to Run an S&OP Process – Benefits, Process Steps, & Overcome Barriers, take our course as SCMDOJO Member.

 

Sales and Operations Planning Blue Prints

 

The competency includes using highly analytical techniques, Excel Spreadsheets, and maybe software to generate baseline statistical forecasts. In my view, demand management is one of the most essential Supply Chain competencies.

 

You can use this Demand Forecast Guide to take your Demand Management Skills to the next level.

 

Demand Forecasting Methods

 

3.    Order Processing

 

Out of all supply chain competencies, Order Processing is the most underrated competency. However, order processing entails the system that an organization has for getting orders from customers, checking the status of orders, communicating with customers about them, and actually filling the order and making it available for customers. Additionally, in some businesses, it also includes processes until invoicing.

 

Order Management

 

Part of the order processing includes checking inventory status, customer credit, and accounts receivable in some businesses. Moreover, because the order processing cycle is a key area of customer interface with the organization, it can have a significant impact on a customer’s perception of service and, therefore, satisfaction (Shapiro, B.P. et al. 1992).

 

In today’s competitive landscape, efficient order management is no longer a luxury – it’s a necessity. Moreover, for supply chain professionals, ensuring smooth order fulfillment from click to delivery is crucial for customer satisfaction, business growth, and profitability. To learn more about it, read our blog!

 

Read More About Order Management

 

The knowledge and skills are necessary to manage the receipt and scheduling of customer orders. Processes included in this competency include standard order receipt, exception identification, and exceptional resolution. However, key to the success of this function are:

1) The ability to work effectively with customers to clarify requirements and negotiate solutions when constraints exist.

2) They can effectively collaborate with other company functions to assess their ability to meet customer needs and develop workaround solutions when necessary.

 

4.    Master Production Scheduling

 

The Master Production Scheduling is a statement of the anticipated manufacturing schedule for selected items by quantity per planning period (Fogarty and Hoffman 1983; Higgins and Tierney 1990). It responds to the Forecast Demand described by the production plan and the actual demand in terms of received customer orders.

 

This supply chain competency also includes effectively evaluating plant capacity and attaining the business’s strategic objectives as reflected in the production plan.

 

Unlike a Forecast Of Demand, the master schedule represents a management commitment, authorizing the procurement, manufacturing, or materials in most cases.

 

Enroll in the course “Production Scheduling” by Kien Leong now to learn the fundamentals of production scheduling, including capacity planning, demand forecasting, and optimization techniques, to ensure efficient and timely production.

 

Production Scheduling

 

5.    Inventory Management & Optimization

 

Inventory management is the practice of managing inventory as working capital. The key objective of inventory management is to increase corporate profitability through improved inventory activities such as demand planning, inventory optimization, safety stock management, excess and obsolete inventory management, or the proper inventory levels to meet customer service expectations with a minimum possible inventory.

 

You can read another practical, The Ultimate Guide to Inventory Planning Methods and Excess and Obsolete Inventory Policy Guide – Revised & Updated, to gain in-depth knowledge of inventory management and improve this move competency.

 

Lastly, you should try the Inventory Optimization Tool in Excel.

 

Inventory Optimization Tool

 

Output You Will Get from Inventory Optimization Tool:

 

  • The total cost of goods sold
  • Current inventory had
  • Planned Safety stock value
  • Inventory Turns
  • Days on Hand
  • The current on-hand inventory (in $ value and % of total) is grouped by the number of months of stock available.
  • Inventory optimization proposals (A. Stock to stock with new safety stock levels; B. Stock to non-stock; C. Non-stock to non-stock; D. Non-stock to Stock with new SS levels)
  • Current on-hand inventory profile in terms of (A. Usable inventory; B. Excess inventory; C. Obsolete Inventory)

 

Paul Denneman’s course, “Inventory Management Fundamentals for Supply Chain,” can help you learn more about the impact of inventory management on the supply chain, optimizing inventory levels, and stock counting procedures.

 

Inventory Management

 

You can also refer to 18 Targeted Inventory Reduction Strategies for Supply Chain Professionals.

 

6.    Materials Replenishment Planning

 

SAP has defined this competency very well as,

 

“the main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.”

 

In doing so, material requirements planning tries to strike the best balance possible between

 

  • Optimizing the service level and
  • Minimizing costs and capital lockup.

 

The material requirements planning process needs all the information on stocks, stock reservations, and stocks to calculate quantities. It also requires information on lead times and procurement times to calculate dates. The process defines a suitable MRP and lot-sizing procedure for each material to determine procurement proposals.

 

 

Material Management competencies

 

This supply chain competency includes the ability to take the Master Production Schedule replenishment quantities and “explode” quantities through the bill of materials to create component requirements, which are compared against on-hand and on-order and forecast.

Check out SCMDOJO’s expertly designed MRP Tool by Kien Long.

MRP Tool

For a full guide into MRP and how this tool works, check out the course by Kien Long on How MRP Works

Purchasing or manufacturing orders are subsequently planned and either placed or deferred by pull in or push out messages.

To Improve this competency, I have developed an Inventory Planning Pack containing tips, tricks, and theories on Managing Materials Replenishment, excess, And Obsolete Inventory.

 

inventory planning method ebook

 

7.    Logistics, Warehousing and Distribution

 

One key supply chain competency is managing the physical flow of goods. This means having the knowledge and skills necessary to effectively manage logistics communication, warehouse and storage management, material handling, and the distribution of goods (including reverse logistics).

 

Learn the history of the Industrial Revolution, eCommerce in warehouse & distribution, material handling equipment, technology in supply chain, and the future of fulfillment with Paul Denneman!

Modern Warehousing & Distribution Centers Operations and Management

 

This includes activities like Goods-in (receiving), put-a-way to stores, picking, packing, shipping, and managing return goods from the customer. However, competency consists of the knowledge and understanding of the activities mentioned above, creating the right processes, and practical application. Moreover, you should refer to the blog 5 Basics Warehouse Activities You Should Focus on Improve to understand more details.

 

Furthermore, you should use this Self-Assessment warehouse audit tool, which enables you to identify areas for improvement.

 

However, we have developed a comprehensive Logistics KPIs Dashboard that explains in detail the six essential Logistics KPI attributes for any business shipping physical products.

 

Logistics KPI Dashboard

 

8.    Knowledge of Continuous Improvement Processes or Methods

 

As the name suggests, knowledge of the processes or methods that seek to improve performance assumes more and smaller incremental improvement steps. In general, learning and implementing the best known of these are those above: Lean Manufacturing (JIT), Six Sigma, Lean Six Sigma, and Agile.

 

By learning these philosophies, it is not the rate of improvement that is essential; it is the momentum of progress in the area you want to improve.

 

If you are looking for Six Sigma Project Examples, you can Find Them Here. Refer to this 5S Kaizen Guide (shown below) to eliminate clutter by Sorting, arranging it with straightening, showcasing it with shine, creating a proper guideline by standardizing, and inspiring it with sustain.

 

supply chain competencies

 

9.    Supply Chain Strategy

 

Competence in Supply Chain Strategy involves the ability to design, implement, and optimize supply chain structures that align with business objectives. This competency ensures that supply chain operations contribute to overall business success by integrating demand forecasting, procurement, production, inventory management, logistics, and distribution into a cohesive strategy.

Effective supply chain strategy development requires a balance between cost efficiency, service levels, and risk mitigation, enabling organizations to remain competitive in dynamic global markets. Professionals in this area must leverage data analytics, industry trends, and emerging technologies to drive long-term supply chain resilience and adaptability.

Check out the full course on How to Create a Supply Chain Strategy by Dr. Muddassir Ahmed.

Supply Chain Strategy

 

10.    Supply Chain Technologies

 

Competence in Supply Chain Technologies focuses on the integration and application of digital tools and advanced systems to enhance supply chain efficiency, visibility, and responsiveness. This competency includes the utilization of Enterprise Resource Planning (ERP) systems, Warehouse Management Systems (WMS), Transportation Management Systems (TMS), and emerging technologies such as Artificial Intelligence (AI), Internet of Things (IoT), blockchain, and cloud computing.

At SCMDOJO we’ve developed specialized courses to help professionals understand Supply Chain Digitalization needs.

Additionally, we offer a special course on Supply Chain Information Systems (SCIS) for Success. Check out the course below!

Supply Chain Technologies

 

11.  Supply Chain Risk Management

 

Competence in Supply Chain Risk Management involves identifying, assessing, and mitigating potential risks that can disrupt supply chain operations. This competency includes understanding and managing risks related to supplier reliability, geopolitical factors, economic fluctuations, cyber threats, and natural disasters.

At SCMDOJO we’ve developed a comprehensive Supply Chain Risk Assessment Tool to help you identify and manage risks. Check out the tool below:

Supply Chain Risk Assessment

Professionals must develop proactive strategies, including supplier diversification, contingency planning, and predictive risk analytics, to ensure supply chain resilience. Effective risk management enables businesses to maintain continuity, minimize financial losses, and adapt to unforeseen disruptions while maintaining operational excellence.

 

12. Supply Chain Resilience

 

Competence in Supply Chain Resilience involves the ability to design, implement, and manage strategies that ensure the supply chain can withstand, recover from, and adapt to disruptions. This competency focuses on identifying vulnerabilities, creating contingency plans, and enhancing agility to mitigate risks and maintain operational continuity.

Professionals in this area leverage proactive risk management, supplier diversification, digital tools, and real-time monitoring to enhance supply chain robustness. An effective resilience strategy ensures long-term sustainability, financial stability, and customer satisfaction in the face of global uncertainties.

Check out Vera Rozanova’s course on Supply Chain Resilience for SCMDOJO! Packed full of expert insights and knowledge. Enroll Now!

Supply Chain Resilience

Final Thoughts on Supply Chain Technical Competencies:

 

I believe those are the eight most essential Supply Chain competencies. Each has definitely given my career a huge technical edge. I hope some of them are helpful to you, too.

 

Which competency is your favorite of the above?

OR

do you want to add any more technical competencies I have missed?

 

You might want to reflect on the above supply chain skills and Design An Awesome Custom Resume.

 

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Reference:

Benson P. Shapiro, V.K. Rangan, and J.J. Svioka, “Staple Yourself an Order, “Harvard Business Review 70, no. 4 (July – Aug. 1992), pp. 113-22.

 

Recommended Supply Chain Guides to Improve Your Supply Chain Skills.

 

 

About the Author- Dr Muddassir Ahmed

 

Dr MuddassirAhmed is the Founder & CEO of SCMDOJ. He is a global speakervlogger, and supply chain industry expert with 17 years of experience in the manufacturing industry in the UK, Europe, the Middle East, and South East Asia, as well as various supply chain leadership roles. Dr. Muddassir has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and founded the leading supply chain platform SCMDOJO to enable supply chain professionals and teams to thrive by providing best-in-class knowledge content, tools, and access to experts.

You can follow him on LinkedInFacebookTwitter or Instagram.

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