Is an MBA in Supply Chain and Operations Worth It?
March 16, 2021
Supply chain and operations experts solve the logistics problems many businesses face. An MBA in supply chain and operations offers a robust general business education enhanced by a valuable specialization.
The ability to maximize profits and minimize costs and waste is crucial to success in all industries. Whether a firm produces a product or delivers a service, the cycle of development and deployment is complex. It involves people, processes, raw materials, and other resources such as time, transportation, and money.
Almost all big companies have to deal with supply chain management (SCM) and operations issues. That's why there's a steady demand for experienced professionals who understand how to optimize supply chain and operations.
A number of on-campus and online master's degree programs offer operations and logistics programs. Master of Science programs focus intensely on the fine-bore details of analyzing and resolving these issues. The Master of Business Administration (MBA) in supply chain and operations is another option.
An MBA in supply chain and operations is best for ambitious logistics professionals who want to enhance their general business knowledge while making their CVs stand out from the competition. The degree combines two fundamental areas of logistics—SCM and operations management—to give degree holders the most flexibility in their career options.
In this guide to a Master of Business Administration in supply chain and operations, we'll cover:
- Why people choose this MBA concentration
- Possible fields and career paths for a Master of Business Administration in supply chain and operations
- MBAs versus other degrees in supply chain and operations
- Prerequisites for a Master of Business Administration in supply chain and operations
- What you'll study in an MBA in supply chain and operations programs
- Commitment required for a Master of Business Administration in supply chain and operations
- Is an MBA in supply chain and operations worth it?
Why people choose this MBA concentration
The Master of Business Administration in supply chain and operations is an extremely versatile degree for supply chain professionals. It teaches students to optimize processes from the beginning to the end of the production cycle. And because it's an MBA, it also covers everything covered by traditional business degree programs.
When you earn an MBA with a supply chain and operations concentration, you'll have the knowledge and skills to:
- Improve operational effectiveness
- Find the best supply chain partners
- Make the production cycle more efficient, from materials sourcing to sales
- Gain a competitive advantage at every stage
The MBA also provides a solid business foundation in areas outside logistics and operations. This training may help you transition away to other functions if you decide it's time to shift gears later in your career.
Supply chain management versus operations management
This MBA concentration couples supply chain logistics and operations. While some programs offer separate operations management MBAs and supply chain management MBAs, there are some compelling reasons to look at MBA programs that cover both.
Traditionally, supply chain management has been treated as a facet of operations. The modern trend toward globalization means that supply chain management has grown more complex, causing some schools to treat it as a separate discipline. Even so, it's still common for businesses to organize both SCM and operations under a single department. At smaller companies, especially, there can be a lot of overlap between supply chain management and operations management.
The difference between supply chain management and operations management lies in the responsibilities managers have. In operations, managers are responsible for everything that's involved in creating a product from raw materials: design, production, manpower, and workflows.
Supply chain managers handle sourcing raw materials and moving both raw materials and the finished product. They oversee purchasing, warehousing, and forecasting. In other words, supply chain managers deal with the external aspects of product creation and distribution, while operations managers deal with the internal aspects. The two functions are clearly integrated and dependent on each other. It makes sense to master both.
Possible fields and career paths for a Master of Business Administration in supply chain and operations
Because supply chain and operations management are important to businesses across industries, there are numerous possible fields and career paths for MBAs who choose this concentration. Here are some of them.
Also called logisticians, these professionals evaluate and improve processes for businesses to reduce costs and resource use in production to increase profits. They may also manage product life cycles, transportation, and delivery, which means their work includes both supply chains and operations. As a logistics engineer, you can earn $78,000 or more.
Supply chain manager
These professionals are responsible for procuring parts and raw materials from suppliers as cheaply as possible, overseeing inventory, and managing the sales and distribution of that inventory. As an SCM, you can earn $114,000 per year or more.
In this role, you spend your days collecting and analyzing spending data to determine how much it will cost to produce a product or provide a service. The responsibilities of these professionals vary by industry, but all focus primarily on the cost of materials, labor, and time. As a cost estimator, you can earn about $80,000 a year if you work in the manufacturing sphere.
Transportation, storage, and distribution manager
People in this role go by many titles, from distribution center manager to warehouse operations manager to logistics supply officer. This manager is in charge of planning, directing, and coordinating transportation, storage, or distribution activities. Those with MBAs can earn $90,000 or more per year.
These professionals work closely with supply chain managers to regulate inventory creation and storage in the context of future demand. Forecasting is a big part of this role; if you become a demand planner, you have to collaborate with many departments. Demand planners with MBAs can earn up to $65,000 annually.
Operations managers spend their days managing the daily operations of a company and developing future operations strategies. Their objective is to ensure maximum production efficiency at the lowest cost. Resource utilization planning is a big part of this role. Operations management MBAs can earn about $98,000 per year.
This umbrella title includes wholesale merchandising managers, retail trade merchandising managers, and procurement managers. These professionals are responsible for managing purchasing officers, buyers, and other employees involved in purchasing materials used in production. Purchasing managers earn about $115,000 annually.
There are lots of other jobs you'll be qualified for once you earn a Master of Business Administration in supply chain and operations. You can work in sourcing and vendor management, business process management, information technology innovation, and business analytics.
MBAs versus other degrees in supply chain and operations
The Master of Business Administration in supply chain and operations is not the only degree option available to those interested in business logistics. You should also look into master's of operations management programs and master's in supply chain management programs.
- The MBA is primarily a business degree; while most programs dive deep into SCM and operations, students also take many general business classes (listed below).
- A Master of Science in Operations Management is primarily focused on optimizing workflow efficiency—especially as it relates to personnel and production. There may be more of an emphasis on managing people.
- A Master of Science in Supply Chain Management is primarily focused on teaching students how to solve supply chain challenges and strategies to optimize supply chain management operating practices.
Prerequisites for a Master of Business Administration in supply chain and operations
To apply for just about any master's degree program in any discipline, you need to have at least a four-year bachelor's degree. If you haven't yet chosen a major, business administration is probably the best choice, though there are schools (like Embry - Riddle Aeronautical University - Daytona Beach, Michigan State University, and Arizona State University) that offer undergraduate degrees in supply chain management and logistics. Students also enter MBA in supply chain and operations programs with degrees in accounting, finance, engineering, technology, political science, and global supply chain management and logistics.
While there are MBA programs that don't require work experience in supply chains or operations, many prefer that applicants show a relevant job history.
Some schools, like the University of Southern California's Marshall School of Business, have specific work requirements.
You will also likely have to submit GMAT or GRE scores less than five years old as part of the application process. Some schools, however, do not require applicants to provide either. Others waive the requirement for students applying to online master's programs and/or those who have significant work experience.
Each university has different application requirements for applicants. Read the guidelines carefully and make sure you understand precisely what you need to submit. Most MBA programs ask students for an application essay or statement of purpose, a résumé, and letters of recommendation from professional contacts, along with transcripts.
What you'll study in an MBA in supply chain and operations programs
When you choose this MBA concentration, you'll become well-versed in every aspect of the supply chain, from transportation planning to analytics to customer service; and operations, from day-to-day processes and procedures to Lean Management strategies and Six-Sigma techniques. You will also learn how to use the most common SCM and operations software platforms and information systems like Minitab, SPSS, and Excel Solver.
Coursework will cover business fundamentals and project management along with logistics, sourcing, scheduling, quality and process improvement methods, and network relationship integration.
Core MBA classes may include:
- Calculus and Statistics for Business
- Organizational Behavior
- Global Economic Environments
- Strategy Formulation
- Quantitative Analysis
- Leadership Development
- Business Ethics
Concentrations courses may include:
- Operations Management
- Supply Chain Management
- Data Management and Warehousing
- Manufacturing Design and Analysis
- Integrated Logistics Systems
- Total Quality Management
- Service Supply Chains
- Strategic Procurement
- Demand Fulfillment
- Research and Negotiation
- Decision Modeling
- Supply Chain Analytics and Strategy
- Optimization and Simulation Modeling
- Enterprise Resource Systems
- Supply Chain Tools
- Optimization Roles for Operations
Commitment required for a Master of Business Administration in supply chain and operations
Most Master of Business Administration in supply chain and operations programs require students to earn 36 to 45 credits. They typically take two years to complete, though many factors can impact the amount of time it actually takes to graduate.
Online programs, hybrid programs, and programs that allow students to study part-time can take three years or more to complete. On the other hand, some online MBAs can be completed in as little as 18 months.
Choosing between the various types of MBAs will be a matter of looking at your resources, your circumstances, and what you hope to get out of your education. On-campus programs typically have the best networking opportunities, while flexible online programs allow working professionals to earn degrees without having to take significant time off. Some online Master of Business Administration programs include a residency component that allows remote learners to interact with their fellow students and professors face-to-face for a week or two.
In most cases, on-campus and online supply chain and operations MBA programs are quite similar and have the same graduation requirements. Sometimes, the same faculty teach both the on-campus degree program courses and comparable online courses.
Cost is another critical consideration. The price tag of MBAs can vary wildly, but that won't be the only expense you need to think about. Books and materials can represent a significant investment for students. If you want to study full-time and on-campus, you need to be sure you can afford room and board and other cost-of-living expenses.
Most importantly, you'll need to weigh the potential increase in salary after graduation against the cost of slowing down at work or taking a few years off. You may not be able to work as many hours while studying to earn an MBA, but taking a sabbatical may not be feasible. Think realistically about how much you can take on before committing to a program.
Is an MBA in supply chain and operations worth it?
The question you need to ask yourself is whether you really want a career in supply chain and operations management. There are pros and cons you should consider if you're not already an SCM or logistics management professional.
On the pro side, the pay in these fields can be generous. John Fowler, chairman of the supply chain management department at the W.P. Carey School of Business at Arizona State University, told US News & World Report that the "average starting salary for our full-time MBAs with a specialization in Supply Chain Management was almost $96,000, with a couple of students in the $120K range. They also received a five-digit signing bonus on average."
That said, professionals in this field earn their pay by putting in more than the average number of hours. A lot of manufacturing facilities run 24/7. You may end up having a non-traditional work schedule or working 80-hour weeks as you advance in your career. That may be a dream-busting con for some.
But if you love logistics, then yes, this could be the right degree for you. With it, you'll be able to have a positive impact on just about every stage of the product life cycle and every link of the end-to-end supply chain.
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