There are many ways in which companies can collaborate with supply chain research centers. One that we have found to be especially rewarding is collaborating on graduate program thesis research projects.
Across the MIT Global SCALE Network, the MIT Center for Transportation &Logistics (MIT CTL), the Zaragoza Logistics Center (ZLC), the Malaysia Institute for Supply Chain Innovation (MISI), the Ningbo Supply Chain Innovation Institute China (NSIIC), and the Luxembourg Centre for Logistics and Supply Chain Management (LCL), offer supply chain master’s programs that require graduate students to complete a thesis research project. In most cases, these projects are carried out in collaboration with a corporate sponsor.
The process starts with prospective sponsor companies. Each center has an outreach program that companies join to interact with faculty, exchange ideas, engage in research, and attend special events. As part of their membership, partner companies can sponsor master’s thesis research projects. Those that are interested pitch their project ideas, and the relevant center matches projects with students. Since the master’s degree programs are generally 10 months in duration, there is a tight timetable for the deliverables.
Projects that fit
Using a graduate student thesis project for research purposes is not the same as hiring a firm of consultants to do the work, so what types of projects are best suited to this form of collaboration?
“Students are very good at tackling clearly defined problems, especially ones that involve quantitative analyses and modeling where they have to collect data from a variety of sources,” says Bruce Arntzen, Executive Director of the Supply Chain Management (SCM) program at MIT CTL. Research questions that require students to analyze scenarios or alternative solutions to understand the key drivers of decisions also are well suited to thesis projects, he says.
For example, a pharmaceutical manufacturer wanted to reduce the levels of working-in-progress (WIP) inventory it maintained. Achieving the goal required the company to find the right balance between minimizing inventory to deliver cost savings, and maintaining enough inventory to support the high level of customer service required in its business. One solution was to invest in more production capacity, and an SCM student team analyzed a series of scenarios based on multiple production stages and frequencies to understand the viability of this option. The research showed how scenario analysis can be used as a strategic tool that helps enterprises weigh such investment decisions in terms of WIP goals.
Satya Narayanan, Director of the MIT-Malaysia Supply Chain Management Program at MISI in Malaysia, says that the research center has identified three characteristics of successful thesis collaborations, “a focus on answering a question, a research rather than a consulting question, and timely access to data and required personnel.” Examples of typical research topics include how to set the optimal delivery frequency for products, how to improve demand forecasting, and how a vendor managed inventory program can be cost- and value-justified.
Benchmarking exercises that compare the performance of supply chains, and very general projects with a global reach, tend not to be a good fit for student research, says Arntzen. Global projects are often initiated by corporate HQ’s, and companies usually experience more success when research topics are driven by business units or divisions.
Access to data and personnel is an important requirement. “Companies need to assign people internally who care about the project,” says Arntzen. Although the students are not new to the supply chain discipline – on average an SCM student has spent six years working in the industry, for example – and already possess a high level of technical proficiency, sponsor companies need to allocate time and resources to support research teams.
Several alumni from the MIT-Zaragoza Logistics Program run by ZLC in Zaragoza, Spain, now work for the healthcare company Roche, and have experience the thesis research process from both student and corporate perspectives. They agree that having the right team at both ends is key. Also, sponsor companies should try to start projects without a solution in mind and take advantage of the opportunity to “co-create” solutions. Coming to the table with a clear understanding of the desired outcome also helps to assure success.
The outcome can be high-level in nature. Healthcare company Johnson & Johnson has sponsored several thesis research projects. The company tries to give graduate students “big strategic questions we are too afraid to ask ourselves,” says Carl Flatley Supply Chain Program Director, Medical Devices, Johnson & Johnson. “When conventional thinking says it can’t be done, we know we are on the verge of a great research question for the next incoming class of CTL students!”
Clearly, ready access to a research resource is one of the main ways in which companies benefit from sponsoring graduate thesis projects. And the benefits are distinct from those offered by commercial consultants.
“Consultants are able to bring us benchmark data and tell us how we are performing relative to industry peers; implementing a best practice is simply the act of copying what is already being done by somebody else,” explains Flatley. But the student teams Johnson & Johnson has worked with “are not limited by what is already being done, the students have no boundaries in their ability to think and create.” Thus, “the insights we get are truly pioneering, this is the engine of innovation and creativity that helps us define benchmarks of tomorrow,” he says.
The Roche ZLOG alumni group agrees that this type of research can be refreshingly unconventional. Graduate students bring fresh thinking, clever questions, and out-of-the-box mentality to problems that might have been left unanswered for lengthy periods, they maintain. In addition, the students are close to the latest thinking in supply chain management, and bring a strong analytical mindset to problem-solving.
Although the research is carried out in an academic environment, these are not “ivory tower” projects. For example, at Roche a ZLOG project that looked at reducing supply chain complexity yielded findings that became part of a much broader initiative that encompassed more than 100 affiliates, and helped to reduce the company’s worldwide SKU count by more than 25%. A project that looked at the impact of lead time on inventory management is another example of student research that was subsequently applied successfully at Roche.
Student thesis research projects also offer recruitment opportunities for companies. They get to know the student teams they work with, and it’s not uncommon for them to hire these individuals when they graduate.
From the student perspective, sponsored thesis projects provide valuable opportunities to apply classroom concepts in the commercial world. Says MISI’s Narayanan, students also learn how to frame challenging research projects and professionally report their findings. “Further, the student learns how to work effectively in a team, manage a project, and interact with industry,” he says.
Exposure to the commercial realities of conducting and applying research is invaluable, maintains Arntzen. For example, even the most elegant technical solution to a problem still must be “sold” to the company’s hierarchy, and departments outside the supply chain domain that might have very different agendas.
Another useful life lesson that students can learn, is overcoming the challenge of obtaining the right data. “Often you might have massive amounts of data but most of it is the wrong type that you don’t need,” says Arntzen. Students must learn how to recognize this shortfall and correct it quickly, because they only have a relatively short time to complete the work.
Unique brand of research
Engaging with graduate students on thesis research projects enriches master’s programs – and delivers real commercial gains.
Flatley’s summary of the benefits that Johnson & Johnson have captured could be applied to any company. “Problem solving and innovation are important enablers in building competitive advantage into our healthcare supply chains,” he says. The graduate students his company has worked with help to drive innovation. The students bring a unique perspective when addressing “those questions to which the answer is perhaps unknown or the solution doesn’t yet exist.” As such, the research sits “somewhere between the work we do ourselves, and the work we outsource to consultants,” Flatley says.
This post is based on an article written by Yossi Sheffi, Elisha Gray II Professor of Engineering Systems at MIT, and Director of the MIT Center for Transportation & Logistics. The post is based on the article Student-Industry Interconnection Transforms the Fabric of Supply Chain published in the May 2017 issue of APICS magazine. Access the article here.