No-Risk Job Track

No-Risk Job Track

Copyright 2003, Traffic World, Inc.

American manufacturing jobs may be being exported overseas but globalization also means greater job security for at least one group: logistics professionals.

Logistics executives have more seniority and responsibility in companies today than in the past, in part because globalization is pushing companies to focus on their supply chains, says Bernard J. La Londe, emeritus professor of transportation and logistics at Ohio State University''s Max M. Fisher College of Business.

"The risk exposure gets elevated as companies go global and as risk gets elevated, so does logistics," La Londe said in his university''s latest survey on career patterns in logistics.

La Londe surveyed 64 senior logistics/supply-chain executives who are also Council of Logistics Management members and presented the survey results at the recent CLM annual conference in Chicago.

Job titles have changed significantly since 1997 - more logistics executives are directors today, rather than managers or vice presidents. In the 1997 survey, 38 percent were managers, 30 percent were directors and 32 percent vice presidents. This year 24 percent were managers, 48 percent were directors and 28 percent were vice presidents. Executives also are newer to their jobs: almost two out of three senior logistics executives have been promoted since 1995.

La Londe has seen a consistent shift in titles, with fewer companies putting "supply chain" on a manager''s door. "That seems to have topped out. There are not as many supply-chain executives as there have been in the past. I don''t know if that is a trend coming to an end," he said.

The executives said they spend 50 percent of their time focusing on general management, warehousing and traffic management. A focus on general management suggests a broadening of the logistics executive''s role, again consistent with higher levels and responsibilities, said La Londe. This broadening of responsibilities has been happening since the 1990s, he said.

More executives are focusing on inventory and cost issues, said La Londe, who expects to see more emphasis on understanding cost accounting and activity-based costing. Executives need to know where costs are coming from to reduce them, and "a lot of executives today feel they don''t really understand costs. We''ve been kind of budget-bound as opposed to process-bound," he said.

What hasn''t changed, however, is salaries. These have remained relatively flat in recent years, probably due to lower bonuses since 2000 as a result of the economic downturn, said La Londe.

The mean median salaries for managers, directors and vice presidents are $124,000, $150,000 and $200,000, respectively. "Compared with salaries in 2002, the median salary for managers and directors increased but the vice presidents'' median salary decreased from $231,000 to $200,000. This may be due to reduced bonuses for senior executives in 2003," he said. La Londe predicts salaries will rise if the economy turns around, based on what he has seen in the past.

At the high end, salaries already are getting "pretty heady," he said. The highest paid managers, directors and vice presidents (in the 75th percentile) had salaries of $114,000, $200,000 and $290,000, respectively.

The age range remained flat, with respondents having a median age of 47.5 years, said La Londe. The median age of managers, directors and vice presidents was 43, 48 and 53, respectively. "In the 2002 survey, the median time that both managers and vice presidents worked in logistics was approximately 20 years while directors worked a median of 21 years," said the study. "Time worked with current firm is about seven years and time in current position is four years."

Another "striking" area of change is what topics executives want to study when pursuing continuing education, said La Londe. In the past it was always finance. But in the past four or five years, that topic has waned, he said. "I think that means now executives are more comfortable in the financial area. Executives reaching that role today have some financial background," he said.

Instead executives are focusing on learning technology, a trend that has been going on for the last three or four years, said La Londe. The top two curriculum topics selected by respondents for study were supply-chain integration (27 percent) and information technology and integration (22 percent). These were followed by international logistics at 17 percent and functional integration and development at 10 percent.

Ninety-five percent of those surveyed had baccalaureate degrees, 45 percent held master''s degrees, 5 percent held associate''s degrees and 17 percent held a professional certification from an organization such as APICS - The Educational Society for Resource Management.

The proportion of respondents with graduate degrees has dropped dramatically over the past decade, from a high of 51 percent in 1997. Those numbers probably reflect the size of the companies that responded to the survey, said La Londe. "MBAs sell better in larger firms than they do in smaller firms. It''s a reflection of that."

Seventy-six percent of the respondents were in manufacturing and 24 percent were in merchandising. An overwhelming majority of the respondents, 95 percent, were male.

The size of the companies responding to the survey was smaller than in the past, said La Londe. The median revenue of their companies was $925 million. The bottom 25 percent had revenue under $400 million and the top 25 percent had revenue of $3.9 billion.