Salaries for Supply Chain management in the US and China are not as different as you might expect.

In the US as of Feb. 1, the median expected salary for a typical Supply Chain Manager is $95,964, while the boss, the Chief, averages just over $200,000 per year.

In China’s booming economy, the salaries for Supply Chain management aren’t dissimilar to the US.  A Supply Chain Executive who is conversant in the three primary languages:

1. English
2. Chinese
3. Supply-Chain-ese

can expect around $120,000 per year in total compensation — and that’s in mid-sized manufacturing cities (1-5 million people) where the cost of living is so low that the average worker earns only $3,000 a year.

First let’s look at the US Supply Chain management salaries, and briefly describe the role.

The figure is based on survey data collected from thousands of companies of all sizes, industries and locations and is courtesy of a website using live data.

What does a Supply Chain Manager do, exactly? A Supply Chain Manager manages and oversees overall supply chain operations. Supply Chain Operations participation includes:

1. Purchasing and inventory of materials
2. Selection of vendors
3. Recommending ways to improve productivity, quality, and efficiency of operations
4. Coordination and resolution of (i.e., taking responsibility for) issues regarding existing and new products
5. Interacting with customers to ensure that all requirements are being met.
6. Being familiar with a variety of the field’s concepts, practices, procedures and language
7. Reliance on experience and judgment to plan and meet goals
8. Leading teams and directs others
9. Creativity, quick thinking and latitude is expected
10. Reporting to top management.

The focus and objectives of a Supply Chain Manager in Melbourne, Florida, for instance, was recently posted to include the following focus and objectives:

1. Responsible for the performance of the supply chain capability in timely, cost effective delivery of related materials for cross-continental program “roll outs”
2. Support the Installation Manager and other Team Leaders in driving continuous improvement
3. Work closely with Value Engineering team to refine bill of material contents, creating savings along the program’s lifecycle.

Other desirable skills include: Project Management skills, excellent teamwork, interpersonal, analytical and conceptual skills; enthusiastic attitude, positive outlook, and possession of a demonstrated ability to work with, and motivate, other people; exceptional written and verbal communication skills, experience in team development and leadership, and a keen understanding of information systems that support manufacturing operations within the position’s scope.

The Supply Chain Manager’s boss. The median expected salary for a typical Top Supply Chain Management Executive in the US is $214,431  (source: HR data as of February 2011).

This job requires the planning and directing of all aspects of an organization’s supply chain policies, objectives, and initiatives, with a significant logistics focus which includes overseeing the organization’s inventory, warehousing, distribution and transportation functions as well as exercising big-picture expertise in a variety of the field’s concepts, practices, and procedures.

Salary for Supply Chain Manager or Executive in China. Bob Liu, C.P.M., CPIM, is President of China Supply Chain Services (CSCS) , an Executive Search Partner for China Supply Chains.  The firm is based in both Fremont, CA and Shanghai, China.

Liu reported recently that a Chinese company can pay $1,000 a month or less to hire a Supply Chain Purchasing Manager with over 8 years purchasing experience.  But … this person would have minimal English skills.

Minimal English skills are fine if you’re a Chinese company with a Chinese market — but for a an international company with a broader supply chain, salaries start to look different.

You can expect $10,000/month for a Supply Chain Manager in China who can:
•    Participate in or lead English-speaking conference calls
•    Develop the supply base strategy in China
•    Manage the complete China supply chain.

So it’s suggested you don’t rely on local salary statistics, for instance, even China salary figures from the venerable South China Morning Post (SCMP).  Because often those salary stats are for local hires working for local Chinese employers.  They apply to most of the workforce but not the sub-set that a Westerner would be looking at.

Trilinguals speak Chinese, English, and Supply-Chain-ese. For Western companies, the most desirable Managers are so called “trilinguals.”  Triliguals speak English, Chinese and the unique, arguably peculiar, language of Supply Chain Management.

It’s hard enough communicating with someone from our own country who doesn’t speak Supply Chain.  We don’t want to try that in China.  Trilinguals are a rare commodity, and, therefore, worth more on the market.

In cities like Shanghai, the cost of living is high relative to the more rural parts of China, and comparable to some cities in the U.S. such as Buffalo, NY, for instance.

(Graphic courtesy numbeo’s Cost of Living calculator.)

Smaller cities near Shanghai within 100 miles include Kunshan, Taicang and Wuxi (population approx. 4.3 million).  Housing and labor are more affordable in cities like Wuxi, and so is the labor.

These “smaller” cities are often unfamiliar to Westerners, but are said to be the current manufacturing base in China.  Many China-based manufacturing facilities and distribution centers end up in such a locale as Wuxi.

In fact, these cities are not as small as they sound. For example, the greater Wuxi area has a population close to that of Washington, DC or the greater Boston area.  Not a small workforce.

We must bear in mind that over 150 cities in China have a population of over 1 million people.

For perspective, the US has 10 cities that size.

So again, it’s important to note that even in these “smaller” Chinese cities, compensation packages for high level and so-called trilingual Executives are quite competitive.  In one example, in 2009 a Supply Chain Procurement Director for a German company earned a compensation package of close to $150,000 / year.  In the same city, a local worker makes an average of $3,000 a year.

The upshot is that for a Supply Chain Executive for a Western company or who can liaise with one, the salaries are going to be comparable to the rest of the world; slightly lower but only slightly.  For more on this, may we recommend this article.

Logistics in the US. A recent Logistics Management magazine report found that supply chain professionals in the U.S. are in fact “well-compensated.”

It certainly helps that median salaries for professionals on the logistics side show a rising trend:

• $80,000 per year in 2006, 2007, 2008
• $85,000 per year in 2009
• $88,000 per year in 2010.

Some 25% of logistics workers received a raise in 2010.  Of those, the average raise was 4.8%.

Supply Chain Professionals in general did well in 2009, according to ISM’s annual report (June 2010).

• $71,348 experienced Supply Management Professional (without Manager title or higher)
• $50,506 entry-Level Supply Management Professional (without Manager title or higher).

ISM’s report is for the 2009 calendar year, in US dollars.

We hope this helps you in your work, research, market evaluations and Supply Chain Management.  Please let us know if it does!

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