Engaging With Industry to Help Reshape Supply Chain Design

Sophisticated supply chains have been around since the Egyptians started stacking stones to make pyramids in the deserts of the Giza Plateau. Today’s complex supply chains, however, would make a pharaoh’s headdress spin.

The industrialized, globalized, and digitized economy is largely powered by multi-faceted networks, not individual links in a chain. And with dozens of disparate but interrelated parts that need to work together seamlessly, modern supply chains increasingly demand an elegant, holistic design. By using the right tools and the right knowledge, however, supply chain managers can design systems that are predictable and efficient, even when linear chains turn into elaborate networks.

Preparing students to enter this dynamic world of supply chain management takes a rare combination of teaching and application, which is why the Sam M. Walton College of Business partners with industry leaders to create unique courses like Supply Chain Network Design.

Conversations between Walton College faculty members and supply chain professionals at Walmart led to a collaboration between the college, the retailer, and the supply chain software company Llamasoft. The result is a course that teaches students the basics of supply chain network design principles and competencies, while also providing hands-on application with a software tool commonly used in the corporate world.

By working together with employers, students, and faculty, we have created a unique class that not only teaches the theory of supply chain but one that uses the same tools our students will use as they begin their professional careers.

The approach to designing supply chain systems has evolved dramatically over the last 20 years. Managers now look for structures that help them analyze information and achieve the right balance between factors such as inventory, transportation, and manufacturing costs, not just for processes within individual supply chains but for the whole system.  

Benita Beamon, in an article for the International Journal of Production Economics, pointed out that this is “largely a result of the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies.” That article was written in 1998, and the complexity of the world – including supply chain systems – has increased at roughly the same pace as advancements in technology.

The Supply Chain Network Design course, which is taught by industry veteran Joel Tyler, teaches students broad end-to-end strategic network design so they can step into the workforce prepared to use current tools that meet these modern demands. As Josh Buchanan, the director of supply chain design and innovation for Walmart International, told me, that’s huge not only for the students but for their future employers.

“The rapid pace of change in today’s world means our businesses—and supply chains—must continuously recreate themselves to remain competitive,” Buchanan said. “Organizations like Walmart are developing supply chain design as a competency to leverage to create competitive advantages. The skills and tools that students taking the Supply Chain Design class at the Walton College of Business are learning will be invaluable for helping to shape the strategies that will drive the supply chains of the future.”

In the worst cases, supply chains today are chaotic – managers don’t know what’s going on across all the various systems as they interact, much less can predict what will happen next. Some systems are merely complex – everything can’t be known, but a good bit can be predicted by managers who are paying attention. Llamasoft helps eliminate the chaos and reduce the complexity by providing an end-to-end view of global supply chains. Managers at companies like Walmart, Tyson Foods, General Motors, Boeing, Whirlpool, and FedEx use the software to make better strategic, tactical and operational decisions as they build and manage their supply chain systems.

Teaching students sound theory while using this current software is good for everyone involved. Preparing students on a technology they will likely use in their professional careers reduces their learning curve when they show up for work and saves companies time and money on training costs. The partnership also provides valuable feedback to Llamasoft.

“We provide them the industry context and insights that they lack,” Tyler said, “so we allow them to have a better product than they did previously.”

The course not only teaches students to use the software, but also to apply it to case studies based on real scenarios from corporate partners like Kimberly-Clark, Johnson and Johnson, Walmart, Tyson, and J.B. Hunt. The class is divided into four sections – safety stock, transportation, algorithms, and value propositions – and integrates the entire supply chain so students can see the various touchpoints between different business units.

“The network design class has given me a foundation of the importance and benefits of optimization throughout the supply chain,” said Jonathan Rojo, a senior with a double major in supply chain management and marketing. “Being able to learn the basic concepts and completing application assignments through the Llamasoft software has given me the opportunity to analyze and understand real-world issues companies deal with. It is a skill set I hope to bring to the table for future employers.”

Students run simulations to evaluate the consequences of choices they might consider based on things like the impact a company’s financial wellbeing. For instance, they might compare options like increasing the number of trucks in the fleet or moving from a third-party carrier to an in-house full truckload option. The students also must review and evaluate constraints such as budget factors as they make their decisions. The simulation then runs calculations on the financial impact of their choices so they can assess the tradeoffs between different options.

“The most important factor in designing this class was to ensure the students would be able to think about the decisions they were making in Llamasoft and be able to justify them,” said Tyler, who has worked in the supply chain industry for 29 years. “Llamasoft is an excellent product. But models have limitations, and it is important that our students can recognize that as they move toward their careers in the supply chain industry.”

The design class is one of several examples of how the Walton College partners with industry to develop best-in-class approaches to solving modern business challenges, and it’s an example of our broader supply chain management curriculum. Creating courses collaboratively with industry partners and recruiters is important because it provides experiential learning and blends managerial decision-making with needed skills and tools.