In an Trans.INFO exclusive, Professor Christian Barrot, KLU Dean of Programs, explains how interest in logistics and supply chain courses among Asian and South America has skyrocketed, why it’s sustainability and long term trends that shape course structures rather than reactions to the pandemic, and what KLU is doing to teach its undergraduates the soft skills industry insiders believe the sector craves.
This interview has first been published by the specialised magazine Trans.INFO. Author: Gregor Gowans. Date: 22 September, 2021.
According to a recent, heavily-circulated report by Bloomberg, major US universities are seeing more applications to supply chain courses this year due to increased exposure on supply chains following the pandemic, while curriculums are being modernised to concentrate more on risk management, data management and production reshoring. Keen to determine whether it has been a similar story here in Europe, Trans.INFO tracked down Professor Christian Barrot, Dean of Programs and Professor of Marketing and Innovation at Kühne Logistics University (KLU) in Hamburg. The latest SCM Journal List ranks KLU, located a stone’s throw from the port of Hamburg, among the top 3 universities in Germany for Supply Chain Management research. Christian Barrot himself has almost 20 years of practical experience in the field of digital transformation, and actively supports the entrepreneurial activities of KLU students and alumni, particularly during the ideation and start-up phases. Naturally, all of this makes Professor Barrot the ideal candidate to discuss the current state of play when it comes to logistics and supply chain degrees.
There has been talk in the USA of there being extra interest in supply chain and logistics courses as a result of the increased exposure the industry has received since the pandemic. In your experience, have you observed something similar at KLU?
Well, on the one hand, universities have had a bit of an issue during coronavirus times. As you know, there were lockdowns and the switch to digital lectures, which had certain effects.
On the other hand though, we have the highest international intake ever; we have more non-European students than ever before. I think we’ve seen an increase of around 50%. In many other places, for example, India and elsewhere in Asia, as well as Latin America, there was a very significant increase too.
Within the German community, however, there has not been that increase. The reason for that was not a lack of interest, but rather that the students were a bit reluctant to directly continue with a master's program because the pandemic has meant they don’t get the full classroom experience.
At the same time, however, there is a tremendous demand in the market for graduates - even bachelor graduates. What we see currently is that in the logistics and supply chain sectors, many companies are totally underwater and need new talent to come in and help them with handling the challenges and the fallout of the corona crisis, as well as other long term projects including sustainability.
I think there’s rarely been a year in which graduates with a credible background in supply chain and logistics have been in such high demand as they are right now.
There are vacancies throughout the sector for academics and others, whether it’s lorry drivers or managerial staff. Companies are desperate to get people on board to get things going, both in regard to logistics and production.
You’ve also got consultants in all sorts of projects who are now being brought in to rescue supply chains or make them more resilient.
So, overall, what we see is a bit of a mixed picture. There’s a huge inflow from outside of Europe, and those inside of Europe have good job prospects right now. So, we expect them [prospective European students] to come back in 2,3 or 4 years time, when this initial covid wave has settled down a bit.
Then they can be sure that they’ll get the full experience at university - they can go abroad, do company visits, internships and everything else.
And I suppose that experience is even richer when you are located in the heart of a huge logistics city like Hamburg ...
We always tell people, you can look out the window and you see logistics, especially here.
Across the river, there's the Africa terminal, where primarily used cars go to West Africa. Next to this is the breakbulk terminal and on the horizon We have the container terminals in-sight, that's really where logistics is happening. You can actually see what was not happening during the pandemic, or when the Suez canal was blocked and ships didn’t show up. It’s all very visible.
Also, in terms of interaction, obviously it’s important that you can bring practitioners into the programs and bring the students into companies. In normal times, we have all these excursions to totally optimized warehouse facilities or to production sites, or ports, looking at terminal operations and things like that. Visits to big corporations like Airbus, who have very complex logistics and supply chain operations.
This is a key part of any study experience. So that's one thing that is obviously easier in non pandemic times, because during the lockdowns, companies were very strict on letting people enter their facilities. As a result, we did everything digitally, with online site visits and talks with senior line managers. This has some advantages; it is much easier, you can bring in more people and you can also do smaller sessions. On the other hand, of course it's not so tangible.
When it comes to courses, recent reports from America state that a number of US universities, influenced by the pandemic, have pivoted their curriculums to concentrate more on things like risk management, data management and production reshoring. It would be interesting to learn if it has been a similar story at KLU.
Well, the harsh, but frank and honest answer is no.
Topics such as resilience, or supply chain risk have been around for decades. I’ve asked colleagues who are in this field and said, now with Corona, will things change? Will companies react differently? Will they do as you mentioned, more nearshoring, and keep more spare parts in stock, or have independent suppliers and so on?
My colleagues in a sense felt that in a crisis, these are topics that do come up and there is a feeling we have to do something about it. However, some 2-5 years on, the desire for cost cutting comes back and people ask why we have this stuff that isn't efficient. People ask “Why do we have this? Do we need this now?”
In Germany, we had big floods recently in which many people died. Afterwards, people were wondering why those 200 people died and why we weren’t warned. Also, back in the day, during times of war, we had sirens to warn about bombers coming in. Those were switched off in 1990 when we thought, “well, that won't happen,” and nothing else was put in its place. Now we’ve realized that some of these precautionary actions are probably not a bad thing.
Even so, for 10 or 20 years, people thought that this was an unnecessary cost that should just be cut off, and it’s only when a disaster happens that people say we need to do something.
The question will be whether in 5 or 10 years time, they actually have established something and will maintain it. As regards the big corporates, what we see is that these kinds of disasters can be forgotten very soon. It's a very deliberate economic decision whereby you say “we didn't do well during the pandemic, but you know, this happens.”
There’s an assumption that although this can happen once every 10, 20 or even 50 years, we should continue as we did and ignore such low-frequency, high-impact events because economically, it may be better - as cynical as it may sound.
Having said that, what I personally think is that we will see drastic changes in supply chains. We thus need to address the need for new knowledge in this area. Both in terms of digital aspects, as well as the core focus on sustainability, because I think in the mid-to-long-term future, the major impact we'll see on supply chains, also with topics like nearshoring, will be driven by issues of sustainability rather than the pandemic.
Now we don’t know when the pandemic shall stop. But let's assume it's a two year thing. So that's probably half a year away from being more or less over. Then it'll just sort of be a blip in history, a big thing in history that popped up and has now passed, like SARS or other disasters.
On the other hand, topics covering climate change and the policies linked to it, this is going to stay not for just a few years, but decades. This is going to be highly relevant for logistics and supply chains. We as supply chain and logistics experts have to deliver quite a bit of the CO2 emission cuts.
So my prediction would be that, yes, there shall be a drastic change in this area. However, I would see these changes being shaped more by the long term perspective of sustainability and climate change rather than some freak event or extreme situation like the pandemic. That would be my take on the issue.
Earlier this year, I spoke to Dr. Muddassir Ahmed, a manufacturing operations, procurement and supply chain leader whose website SCM Dojo offers help and advice to supply chain students. During our discussion, Dr. Ahmed talked about the importance of soft skills, as he felt some graduates were lacking in this area. Do you share that opinion, and if so, what are you doing to provide your graduates with those very skills that they will need?
I think that’s a very, very relevant point. This is also one of the reasons why we exist as a university.
An observation of Mr. Kühne, the donor of the foundation running us, was that in the old days, people managing logistics companies or doing logistics were hands-on practitioners.
In Germany at that time, for example, a young person like Mr. Kühne did an apprenticeship. He or she worked in various places around the world, for example in Hong Kong or New York. As a rule, logisticians had not graduated from university. As the owner of a shipping company or a trucking company, you had never seen a university.
What we see today is that many other fields are becoming very academic. Finance for instance, or marketing, which is an area I come from. The role that logistics plays in companies has never really found its footing at the top level.
Firstly, If you look at the very top companies in the world, perhaps from the FTSE 100 in the UK, the DAX 40 in Germany or the S&P 500, and then look at these companies, you rarely find a position of chief supply chain officer or chief logistics officer.
The last time I checked, in Germany, there were just one or two companies who have this, and one of them was a major logistics company. However, you always see a Chief Financial Officer, or a similar position for someone in marketing or HR and so on.
That means there is often no boardroom visibility of logistics and supply chains. At the same time, few people who are CEOs, CFOs, marketing people or whoever, have any deeper knowledge of supply chains.
What the issue here is that we have people who are really good experts, who are practitioners in this game, but who for some reason or another, don't reach the high echelons of top leadership.
Why? They may miss the leadership skills - the very skills required to lead teams to become responsible at higher levels. Not even just for logistics, but also in other areas.
Today, we have finance people who are responsible for logistics, but we don't have logistics people who are responsible for finance. This kind of defines the role that something has in a company - is it perceived as strategic, important, relevant and visible, or is it just something that runs in the background, hopefully doesn't cost a lot and works all the time.
So what we have in all of our programs is a combination of the fundamental knowledge of logistics and supply chain methods - the more advanced methods, as well as the more academic methods related to leadership skills, management skills, negotiation skills and intercultural skills. This is needed to qualify our graduates to become managers, even top managers of the companies, or at the very least, to be able to communicate with top management in a way that they will be understood and followed.
The challenges of supply chain and logistics have nonetheless become more visible at board level, and it has also become a strategic focus of companies, which wasn’t always true in the past.
I remember very vividly an logistics event with many important industry figures being present. One of the major customers, who was a major European player, held a keynote there. He was more or less saying, repeatedly, that logistics is a waste in the sense that it’s a cost, and that you have to minimize all the costs. He argued that minimizing logistics and indeed having no logistics at all, would be best. But if you have a customer telling you that your product is a waste, that's not a good start.
So for obvious reasons, from my perspective, as an innovation and marketing person, often we also fail from a logistics and supply chain perspective, to bring across the value that logistics and supply chain management delivers to companies, to business customers, but also to end customers.
Nowadays, during the pandemic, people notice if it doesn't work, but often people don't perceive the value that is generated through this aspect and what could be even further generated.
So in that sense, I think logistics and supply chain is often under-sold not only within companies, but also to the outside world in the shape of customers or partners. I think that is something we have to work on.
For example, we know that finance is important or that HR is important, this is something nobody would even question. We have to come to a situation where people realize that logistics is never perceived as “waste” - but that it's an essential strategic element that can generate value for you and your customers.