What is supply chain management (SCM)? Mastering logistics end to end

Supply chain management enables enterprises to source the materials necessary to create a product or service and deliver that product or service to customers. Here's how to make the most of your SCM strategy.

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A smart contract automates the “if this happens then do that otherwise do something else” part of traditional contracts. Computer code behaves in a predictable way without suffering from the linguistic nuances of human languages. In theory, a smart contract allows enterprises to sign a normal paper contract that includes a pointer to computer code encapsulated in a blockchain. The parties agree that both will abide by the results the code produces as long as the contract is in force.

The objective of the smart contract is to reduce the time and cost of contract enforcement by defining contract terms so precisely that they can be enforced by a set of computer rules. This eliminates the lawyers, notaries and other middlemen who facilitate the creation, storage, and administration of legal documents. Even better it minimizes the opportunity to sue, since contract terms have to be standardized and precise in order to render them as computer code; no clauses can be left to human interpretation.

Smart contracts have a great deal of potential. However, widespread use is some time away.  Few smart contracts have actually been put in place and few people have real experience turning contract terms into computer code.

While proponents remain optimistic, there is a growing realization that legal-to-computer translation is a difficult problem. Concerns include:

  • It is difficult to anticipate every detail of all possible events that could happen under the terms of all but the simplest contracts. This level of specificity is needed to convert a written legal contract into computer code.
  • A blockchain must be completely deterministic, with no opportunity for differences. Since smart contracts are executed by every blockchain node independently, if the blockchain requires data for processing that is not already present in the blockchain, it is difficult to guarantee that each node will receive the same data. For example, if an external source provides different answers depending on the time the request is received, blockchain consensus will fail, resulting in contract failure.
  • Smart contracts have been hacked. In theory, a contract encapsulated in a blockchain should be more secure than a paper contract. Unfortunately, the Distributed Autonomous Organization (DAO), a leading proponent of smart contracts operating on the Ethereum blockchain, has been hacked several times.

For more on blockchain and smart contracts, see Getting started with blockchain smart contracts.

How is electronic data interchange (EDI) impacting the supply chain?

The Transportation Data Coordinating Committee was formed in 1968 to develop EDI formats for shipping companies that operated ocean going vessels, railroads, airlines, and trucks to exchange electronic messages.

EDI has matured over the years. The Accredited Standards Committee maintains the EDI X12 standard (sometimes known as ASC X12), which is widely used in the U.S. for supply chain, health care, insurance, government, and transportation. In addition, the ASC contributes to the UN’s EDIFACT messaging schema that is widely used outside of the U.S. Other EDI standards include The Organization for Data Exchange by Tele Transmission in Europe (ODETTE), VDA which supports the German automotive industry, and GS1 for global retail, healthcare, and transportation.

EDI will continue to speed communication through the supply chain. Messaging standards are well defined and incorporated in supply chain software. Standards committees continue to expand message types and keep the technology up to date.

Supply chain management master's degrees

You can start a career in supply chain management (SCM) with a bachelor’s degree, but if you’re looking to climb the ladder and push your career forward, you will want to explore a master’s degree in the field. SCM is becoming an important role in multiple industries, including retail, manufacturing, technology and the federal government.

Here are ten supply chain management programs worth a look:

  1. USC Online — Master of Science in Global Supply Chain Management
  2. University of Washington — Online Master of Supply Chain Transportation & Logistics
  3. Boston University — MS in Supply Chain Management
  4. The University of Maryland - College Park (UMCP) —  Management Master's Degree with Acquisition and Supply Chain Management Specialization
  5. University of San Diego — Master’s in Supply Chain Management
  6. Michigan State University — Master of Science in Supply Chain Management
  7. Air Force Institute of Technology — Distance Learning Master of Science in Logistics
  8. Rutgers University Business School — Master of Science in Supply Chain Management (Online)
  9. Florida Institute of Technology — Master's in Supply Chain Management
  10. Embry-Riddle Aeronautical University — Master of Science in Logistics and Supply Chain Management 

To learn more about each of these programs, including the length of the program, who they're for, whether they're offered online, and tuition rates, see "10 best graduate programs for supply chain management."

Supply chain management certifications

SCM pros with at least one certification get paid on average 19 percent more than those who aren’t certified, and those with two or three certifications earn salaries that are 39 percent and 50 percent higher than the median, respectively.

Whether you’re already making a career in supply chain management, or want to break into the field, here are eight supply chain management certifications that can round out your resume and give you a leg up against the competition.

  1. APICS Certified Supply Chain Professional certification (CSCP)
  2. APICS Certified in Production and Inventory Management (CPIM)
  3. APICS Supply Chain Operations Reference (SCOR-P) Endorsement
  4. ISM Certified Professional in Supply Management (CPSM)
  5. ISM Certified Professional in Supplier Diversity (CPSD)
  6. SCPro Council of Supply Chain Management Professionals (CSCMP)
  7. SOLE Certified Professional Logistician (CPL)
  8. NCMA Certified Professional Contract Manager (CPCM)

To learn more about these certifications, including requirements and fees, see "The top 8 supply chain management certifications."

More on supply chain management:

Copyright © 2017 IDG Communications, Inc.

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