UT is #1 at something: Logistics
and Transportation
by Joe Sullivan
There wasn't a lot of a hoopla at this season's kick-off for the UT Supply
Chain Strategy and Management Forum on Tuesday. But the assemblage of corporate
officials from throughout the country with a select set of UT professors
and students at the tony Maple Grove Inn on Westland Drive was heady, all
the same.
The forum is emblematic of the one academic program UT offers that is widely
recognized to be top ranked in the nation. Its Logistics and Transportation
(L&T) moniker may sound obscure, but in fact it's the backbone of UT's
College of Business Administration. Although it's only one of the B-school's
nine areas of concentration, nearly half of the 90 Masters of Business
Administration who graduate each year are L&T majors. Their average starting
salaries of $62,400 are the highest of any category of UT graduates.
"Some of them start with a higher salary than the senior faculty," says professor
Tom Mentzer without a trace of resentment. Indeed, top pay for a freshly-minted
MBA in L&T in 1997 was $100,000, compared to an average salary of $80,000
for the six full professors in the program. (Before you start feeling too
sorry for the faculty, bear in mind that most of them bring in substantially
more in research grants and consulting fees.)
What exactly is this transportation and logistics program with its supply
chains and the like? And how did UT get to be number one in this lucrative
field—and by whose determination?
For more than 50 years, UT has been cranking out transportation graduates
for the rail, trucking, shipping, and airline industries. But in the what-iffing
mode of the 1970s, faculty members spurred by expressions of corporate interest
began contemplating a counterpart curriculum focused on the needs of shippers.
"The shift toward the logistics of transportation users meant introducing
courses such as inventory management and warehousing and distribution; and
it also meant involving companies such as Sears and General Motors," recalls
professor Gary Dicer, the gray beard of the L&T faculty at age 57. Dicer,
who launched his career as a third-mate on a banana boat before turning to
academic pursuits, recalls that a rolling retreat on a rail car in 1978 was
a defining moment in the program's evolution.
Harry Bruce, a UT transportation grad and booster who was then the CEO of
the Illinois Central Railroad, invited the faculty to strategize with him
on a two-day ride in his private car down the historic IC line from Chicago
to New Orleans.
"The thicker the cigar smoke got in that car, the bolder our thinking became,"
Dicer reminisces.
The Supply Chain Forum that kicked off its new season on Tuesday illustrates
the program's success. Around 20 major companies contribute $10,000 to $50,000
each to participate, and two MBA students along with a faculty advisor are
typically assigned to a research project for each of them.
One of this past year's projects, for example, involved an assessment for
Coors Brewing of how well its distributors are satisfied with its delivery
system. "We came back to them with a GAPS model, which is a logistics system
for looking at differences between what Coors thought they were delivering
and what its distributors thought they were getting," says Mentzer, who holds
the Bruce Chair of Excellence at the school.
Coors' director of customer service Gary Tenhulzen says the UT team "tackled
the issues head-on and delivered great results for us." UT is the only school
whom Coors has turned to for such a project because "the leaders of the program
have a great reputation in the field, and they do a very good job of marketing
to the industry." Over the telephone from his office in Golden, CO, Tenhulzen
adds that, "you guys have a great football team, but your logistics program
is the greatest."
While opinions vary as to what makes the L&T program tops in its field,
there's widespread agreement on its number one ranking. Recent reaffirmation
came from a survey of senior logistics executives conducted by Foster Partners,
an executive search firm affiliated with KPMG Peat Marwick. According to
the survey's respondents, "The University of Tennessee ranks number one across
the board as the top school for educating future logistics/distribution
executives, followed by Michigan State University, Ohio State University,
Pennsylvania State University, and Georgia Tech."
Where are the likes of Harvard, Stanford, Wharton, and the other big name
business schools? Dicer explains that while they offer logistics courses,
they don't have a full-fledged program like UT's.
"A UT diploma in logistics is the equivalent of a Harvard or Stanford degree
in other fields," says the self-effacing Dicer with a little prompting.
The Foster Partners survey doesn't shed any light on why the business world
ranks UT number one, and faculty members put different emphases on their
responses to this question.
The lanky, mustachioed Mentzer offers a top-down view. "The faculty has really
made us number one," he says. "Typically, people who have chairs like mine
only teach one course, but the normal load here is two courses each semester
plus contributing to a 'tools' course in which the whole faculty collaborates
on making sure our students have all the statistical, systems, and other
technical skills they need. There's a tremendous dedication to teaching as
well as research and corporate partnering here."
Professor John Langley, who is probably the most renowned in industry circles
of any faculty member, takes a bottom-up approach. "We're number one because
we've been able to attract fine students who've gone out and made us look
good," Langley says.
Graduate students are drawn to its MBA and doctoral programs from throughout
the country. Because of their business backing, they haven't suffered from
state funding cuts the way UT's College of Arts and Sciences has (lots of
luck getting companies to contribute to English and history studies).
Geoff Sease, for example, is a Rochester, NY, native who entered UT's MBA
program in the fall of 1995 primarily for two reasons. One, he was influenced
by his father, who is the senior logistics executive for a Rochester-based
merchandising company. Second, while working on an undergraduate research
project at North Carolina State, he became mightily impressed with John Langley
while attending a conference in New Orleans of the Council of Logistics
Management when Langley was its president.
"UT even exceeded my expectations," says Sease, who went with Eastman Chemical
in Kingsport after his graduation last May. "The faculty members are not
only world-class, but also very personable and great to work with."
The Supply Chain Forum links students and faculty to a blue-chip list of
more than 20 corporate participants that includes Becton Dickinson, Coca-Cola,
Coors Brewing, Eastman Chemical, Frito-Lay, and General Motors. Each student
project is tailored to the needs of its sponsor, and substantial corporate
benefits are claimed.
Mentzer relates: "We had an auto brake replacement manufacturer ask us to
develop a demand forecasting system to support their production scheduling
and inventory management. Their CEO asked us to estimate the savings from
this project, on which less than $10,000 was spent. When the savings we
identified got to $6,000 per month, he said, 'Boys, you can quit counting.'"
Businesses aren't the only beneficiaries of the program's research and consulting
projects. Dicer, for example, has been working for the past three years with
CARE on streamlining its worldwide food distribution system. "Because of
governmental funding constraints, they're having to learn how to do more
with less, and we're trying to help them in a variety of ways," Dicer says.
Among them: development of a logistics training manual and new shipping methods
designed to cut down on food damage, spoilage, and risk of pilferage.
If there's any disadvantage to the jump-start that the L&T program is
giving to student careers, it's that the field can tend to be a dead end,
at least for those seeking to make it to the very top rungs of the corporate
ladder. The Foster Partners survey of executives that rank UT number one
also includes a lot of carping about their topping out at a rank of no better
than vice president of distribution and at compensation that doesn't keep
pace with other career tracks.
UT faculty members concede there may be some truth to these complaints,
particularly in the case of larger companies. But David Schumann, who is
chairman of a department that encompasses marketing along with L&T, contends
that, "Logistics is a coordinating discipline that touches on a number of
elements of business and can provide very good preparation for starting your
own business. A number of the members of our corporate advisory council have
taken that route to the top of their own companies."
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