By Dr. Robert Gordon, CPC | 10/10/2024
Supply chain management (SCM) and project management share several similarities in their goals, processes, and requisite skills. Efficiency, standardization, and value creation are central pursuits to both disciplines but how they are pursued can lead to unintended consequences in quality control and supply chain performance. Similarly, the convergence of processes and methodologies may overlook the need for flexibility and innovation.
As businesses navigate an increasingly complex and ever-evolving environment, a critical understanding of the similarities and limitations of supply chain management and project management is necessary for students.
What Is Supply Chain Management?
The primary distinction between project management and supply chain management lies in their objectives. Project management involves planning, executing, and completing specific projects, which are temporary endeavors with defined beginnings and endings.
By contrast, managing one or more supply chains encompasses a broader and more continuous scope. Supply chain management focuses on coordinating all activities related to supply chains, including sourcing, producing, and delivering goods and services from suppliers to end customers. A supply chain manager is also concerned with:
- The procurement of raw materials
- Inventory management
- Operations management
- Supply chain processes
- Risk management
- Demand forecasting
- Customer satisfaction
Supply chain project management is an ongoing process that requires the constant monitoring, adjustment, and optimization of supply chain activities. The primary objectives of supply chain project managers are to ensure the efficient flow of materials through supply chains, minimize costs, meet customer demand, and maintain quality and reliability.
What Is Project Management?
Project management focuses on planning, executing, and concluding projects to achieve specific goals within defined constraints such as time, budget, and resources.
- Initiation: Project objectives and feasibility are established.
- Planning: A comprehensive roadmap is developed.
- Execution: The project plan is implemented.
- Monitoring and controlling: The manager tracks progress and ensures alignment with the plan.
- Closing: The project is finalized and outputs are delivered to stakeholders, and lessons learned are documented for future projects.
Project managers also leverage the appropriate project management tools like MS Project®, Slack®, Basecamp®, and Trello® software for ensuring efficient project management. Some software is used to for managing projects, while other tools enable project managers to work with teams and aid in better communication. There are also specialized artificial intelligence (AI) tools that project managers can use, such as True Project®, another type of project management software.
Project managers also utilize different project management methodologies. For example, there is:
- The traditional waterfall approach
- The flexible and iterative Agile method
- The process-driven PRINCE2 framework
- The efficiency-focused Lean and Six Sigma practices
Each project management methodology offers a structured approach to different types of projects, ensuring that they are completed efficiently and effectively. Experienced project managers will understand these options and select the most appropriate approach and project management tools for the given task.
The significance of project management lies in its ability to provide structure, ensure accountability, and help organizations achieve their strategic objectives. Project management is vital in driving organizational success in today's competitive business environment by facilitating increased efficiency, cost reduction, and customer satisfaction.
What Are the Differences Between Supply Chain Management and Project Management?
There are critical differences between project management and supply chain management, particularly in their respective time horizons and flexibility. For example, project management operates within a fixed timeframe, using clear start and end dates for managing projects.
The fixed timeframe in project management requires high planning, precision, and good project management processes, as delays or budget overruns can have significant consequences. The focus is on delivering a specific outcome within the established parameters, with little room for deviation once the project is underway.
Supply chain management, by contrast, requires a high level of flexibility. Supply chains must adapt to changes in demand, supply disruptions, and market fluctuations. Supply chain managers need to continuously monitor and adjust their strategies to maintain efficiency and meet the needs of the project and the client.
Also, supply chain management is an ongoing process. While a project might have a set timeline, that does not mean that required items can be manufactured within that timeframe. For supply chain managers, there are always going to be challenges with product supply and service availability.
However, wise project managers will work directly with supply chain managers to understand lead times and availability before setting delivery deadlines in stone. Without both roles, it becomes a challenge for project management to be successful. However, the key to project success is understanding the overlaps and deviations and reducing project risks.
How Can Project Management Improve the Supply Chain?
One way that project management can improve the supply chain is to apply the “SCREEN” acronym to improve supply chain operations. SCREEN provides project management professionals with a useful strategy that can be used to strengthen established supply chain processes, cohesion, communication, and coordination within a team.
A supply chain manager can leverage SCREEN to improve supply chain management in several ways:
- Support: Supply chain team members and suppliers need to be understood so they are recognized for the value they bring to the project. Making sure that people are appreciated and have the organization's support goes a long way toward getting people to remain focused on a project's goals. The supply chain manager must ensure everyone on the team knows they are supported.
- Communication: Effective communication is one of the most important ways to keep a supply chain working efficiently. The supply chain manager needs to connect with people throughout the supply chain; making these connections will garner more support for the leader and the project. Never expect people to accept orders because they have been mandated; instead, make a compelling case for the project's benefits and how cross-functional teams fit into it. When people understand why they must take certain actions, they are more apt to take the requested course even if it is more complicated.
- Recognition: Ideally, provide rewards and recognition to everyone who supports a project. Seek out good performers to recognize their efforts and ensure that all those participating in a project are appropriately recognized. Do your research and understand who accomplished what so that the right people are recognized and, if possible, rewarded. Even a small reward goes a long way toward motivating people to work hard towards a project's success.
- Education: Training and education will help people understand a project and the overarching goals of an organization, and they are often exposed to new ideas that could be applied to the project. The better educated the team, the better they can support the project and their leaders.
- Empathy: Empathy is vital in understanding the concerns of all supply chain stakeholders. Acknowledge and address their concerns through open and honest communication. People seek to be understood, so listen to everyone who can offer you feedback and be sure to listen actively. For instance, you might receive useful information that could lead to improving cost savings, mitigating project risks, optimizing processes, and improving supplier relationships.
- Needs: Supply chain management is like project management in terms of needs. Involving stakeholders whenever possible will help build ownership and commitment.
Project Managers and Supply Chain Managers Should Maintain a Good Relationship
Having been in both supply chain management and project management roles at different times of my career has given me particular perspectives on both areas. First, project managers can have an unrealistic feeling of control. Too often, this feeling is false and based upon a timeline that may be impractical.
However, this type of manager will often believe that others will conform to the timeline to keep the project on track. But just because someone thinks that an order for products or services is a big order, that does not mean it is a big order in reality.
The supply chain manager understands the bigger picture in project management practices. Sure, $100,000 sounds like a big order. But if that the order was placed with Apple®, which has an annual revenue of 380 billion plus for the past three years, a $100,000 order is not that much by comparison.
Furthermore, asking someone to cut their lead time in half because it’s a big order will not get a big company to budge. The supply chain manager may then have the joy of explaining this fact to the project manager, who will often quip, “Tell them they won't get the next order that is likely to be twice as large.”
I have learned that big companies can do just fine without our orders, and being polite is often better than making empty threats about the future. After all, if the next client asks for Apple products, people will not say, “It's okay; just order something else because you have an issue with Apple.” That project manager will place the next order with Apple to fulfill customer demand.
Ideally, project managers and supply chain managers should have a good relationship but also a good sense of perspective. It is important for both supply chain managers and project managers to make each other and their subordinates feel heard and monitor projects effectively for successful project outcomes.
Supply Chain Management Degrees at American Military University
For students who are seeking entry-level job opportunities or experienced professionals who want to upskill their abilities, American Military University (AMU) offers three supply chain management degrees:
- An online associate degree in supply chain management
- An online bachelor’s degree in supply chain management
- An online master’s degree in supply chain management
Courses in these programs are taught by knowledgeable faculty with years or decades of experience in the supply chain management field. The curriculum in these programs includes a variety of topics, such as:
- The basics of business
- Macroeconomics
- The principles of supervision
- Principles of supply chain management
- Global demand management
- Principles of ecommerce
- Global issues in supply chain management
All of these degree programs have received certification from the Accreditation Council for Business Schools and Programs (ACBSP®). This specialty certification means that these programs are examined by professional examiners and held to high academic standards for the benefit of students.
For more details about supply chain management degrees at AMU, visit our business administration and management program page.
MS Project is a registered trademark of the Microsoft Corporation.
Slack is a registered trademark of Slack Technologies, LLC.
Basecamp is a registered trademark of Basecamp, LLC.
Trello is a registered trademark of Trello, Inc.
Apple is a registered trademark of Apple, Inc.
ACBSP is a registered trademark of the Accreditation Council for Business Schools and Programs.