Surveys of the Month

Salary increases are modest for most logistics and materials management professionals this year, hovering around a predicted 3.6%, which is lower than raises in 2002, but close to the national average for most mid-level professionals. There are a few select job titles that enjoyed even larger raises in 2002, such as 5.3% for materials managers, according to the 2002/3 Geographic Report on Middle Management Compensation from Watson Wyatt Data Services. Two additional salary data sources, the APICS 2002 Salary Survey of Resource Management Professionals from APICS and The Ohio State University 2002 Survey of Career Patterns in Logistics from Ohio State University provide insights into pay for logistics and materials management professionals.

Salaries for Logistics Pros

Watson Wyatt

The inventory control manager in the Watson Wyatt survey earns an average salary of $66,000-- but naturally, pay rises and falls along with the company's size (see Table 1). Among small firms, those with less than 500 people, the average salary is $60,900 nationwide. It rises to $64,100 when the company has 500 to 2,000 employees and reaches a high of $68,500 when there are 2,000 to 7,500 people. Pay declines slightly, to $67,500, when there are 7,500 and more at an organization.

Overall, companies on the West Coast offer the highest salary, at $71,600. The Northeast and North Central regions come in second and third, with $66,900 and $66,000. The South Central and Southeast are $64,700 and $63,700, respectively.

The inventory control manager plans, directs, coordinates, and evaluates all or most inventory planning and control activities of the organization. This position also manages inventory replenishment based on production schedules, current inventory, customer orders, and forecasts. It ensures accurate and current inventory records.

The materials manager in the Wyatt survey manages the overall control and movement of materials in and out of plants and directs and administers some or all of the following: purchasing, production scheduling and control, inventory and warehouse stock control, warehousing, sales order entry, customer service, traffic, and shipping. The overall average salary for this position is $75,200.

As for company sizes, the lowest salary, $73,000, is found in the second-smallest organization, firms with 500 to 2,000 people. The smallest firms (those with under 500) offer an average of $74,000. At organizations with 2,000 to 7,500 people, the average salary is $75,800. Pay tops out at $77,500 at firms with 7,500 employees or more.

The West Coast pays the most in general, with an overall salary of $77,700. However, companies of different sizes pay more in other regions. For example, out of all small firms, those in the South Central area pay the most, at $82,300. Likewise, companies with 500 to 2,000 people also pay the most, $76,500, when located in the South Central region. Firms with 2,000 to 7,500 people located in the Northeast and the West Coast pay the same average salary of $82,200. Lastly, organizations with 7,500 people or more pay the most when situated in the Northeast, at $81,500.

The traffic manager earns an overall average of $64,600 in the Watson Wyatt survey. The traffic manager develops and maintains economical and efficient transportation service for the organization and its customers, including the rating and routing of inbound and outbound shipments where the organization bears the costs of transportation.

This time, the top-paying companies are the midsize ones; those with 2,000 to 7,500 people, which offer an average $67,100. Companies with less than 500 pay an average of $58,300.

Logistics Director/Manager from APICS

The average annual salary of a distribution/ logistics director/ manager is $82,623, according to the APICS survey (see Table 2). This position's responsibilities include shipping and receiving, warehousing, fleet, traffic, and import/export customs management, and may include customer service or order-processing functions. This position may also be responsible for the physical movement of material from all the manufacturing/production facilities, including remote facilities, of inbound and outbound shipments and includes domestic and international shipments to customers. They are also responsible for shipping of final or in-process products, goods, and materials.

There is quite a range in pay among the different industries. Retail has the lowest mean pay for this position, at $54,667, followed by lumber/ paper at $62,520. The highest-paying industry in the sampling shown here is machinery, at $91,571.

A materials management director/manager is responsible for all materials management functions, including production planning and control, distribution, and warehousing. It may also include purchasing. The average overall salary is $80,764.

There isn't as great a variation in pay between industries for the material management director/ manager. The lumber/paper industry offers the lowest mean salary of 75,800, while the highest is $86,412 in the health care/medical devices arena.

An inventory planning and control manager has the overall responsibility of determining the required quantity and availability of materials needed to meet the master schedule. This position is responsible for master scheduling, materials handling, inventory turns, forecasting, and the administrative controls for manufacturing/production records and files at all production facilities. The overall mean salary is $67,125.

Ohio State University

The top logistics manager takes home a mean $97,397, or median $98,000 according to The Ohio State University 2002 Survey of Career Patterns in Logistics, which is a survey of senior U.S. logistics and supply executives who are current members of the Council of Logistics Management (see Table 3). In the 25th percentile, the mean total pay for the manager is $77,500. At the other end - the 75th percentile - total pay reaches $117,500.

For logistics directors, the mean is $140,996, while total median compensation comes to $150,000. Directors' total pay can range from $120,000 to $160,000.

Not surprisingly, vice presidents earn the most, with mean pay of $230,712. In the 25th percentile, pay is $165,000 and reaches $272,500 in the 75th.  

This study also covers other details about logistics pros, such as that 97% of survey participants are responsible for traffic management, and 91% also have warehousing responsibilities.

Purchase Information

The 2002/2003 ECS Report on Middle Manager Compensation is available from Watson Wyatt Data Services, 218 Route 17 North, Rochelle Park, NJ 07662; 201-843-1177. Cost: $890.

The APICS 2002 Salary Survey of Resources Management Professionals is available on CD-- ROM for $59.95 (APICS members) and $74.95 (nonmembers). To order, call APICS Customer Support at 800-444-2742 and ask for stock number 01637.

The Ohio State University 2002 Survey of Career Patterns in Logistics can be downloaded at the school's Web site www.fisher.osu.edu/ supplychain/ under "Research. and Faculty," or at the Council of Logistics Management's Web site under "Career Center" at www.clml.org. Cost: free.