The shortage of skilled workers, coupled with more people leaving the workforce through retirement, is creating an imbalance that is especially noticeable in supply chain management. One global study estimates that demand for supply chain professionals exceeds supply by six to one, and the US Bureau of Labor Statistics reports that the number of jobs in logistics will grow by 26 percent between 2010 and 2020. If this deficit continues, the performance of supply chains will deteriorate — especially as they grow in geographical span and complexity.
Human supply chains
A human supply chain is the system that enables an organization to have the correct talent available when and where it is needed. Arms and Bercik (2015) say that it’s entirely possible to apply the principles of supply chain management to supply and demand talent. They write: “Talent supply chain management involves using the right supplier for each specific and unique hiring need as well as establishing the right supply chain implementation; coordination; and, when necessary, remediation. ... Workforce analytics make it possible for companies to gain insight into the overall dynamics of internal and external factors. Talent supply chain management is an ongoing company-wide process that needs to be performed with careful attention to detail and full awareness of company and talent priorities.”
Companies must develop their people-related networks if they are to have any hope of maintaining a high level of service in their product-related ones. Interestingly, in its simplest form, the human supply chain is a supply and demand problem. Supply chain managers therefore should be excellent at confronting and managing it. Unfortunately, that is not the case.
Retiring employees is one of the more certain demands supply chain managers face. This disappearing tribal knowledge will be very difficult to replace (Mantey 2014), particularly because many workers possess skills that are not obvious, and, in some cases, a single employee is the only person who holds a piece of key data.
Furthermore, because future skillsets will be very different than many of those today, simply replacing retirees will not solve the talent shortage. Cappelli (2008) and others note that the changing work environment is making talent forecasting difficult, if not impossible. Indeed, today’s supply chain managers will have to incorporate many new variables in their functional areas over the coming years.
Robotics, big data manipulation, machine learning and artificial intelligence techniques are enabling machines to match or outperform humans in a range of work activities, including ones requiring cognitive capabilities (Chui et al. 2017). These rapid advances also make it possible for workers to turn over the more analytical tasks to computers and move on to activities that require human intervention, such as resolving problems and managing change.
Similarly, automation is both replacing workers and helping people do their jobs better, or creating new jobs. One interesting application is the use of exoskeletons — devices that workers wear to enable them to lift heavy objects more safely (McFarland 2017). The use of virtual reality to train truck drivers (Clark 2017) is another exciting innovation. Robots already are widely used in distribution centers, and driverless trucks are expected to become a significant advancement in the not-too-distant future (Crandall and Formby 2016). 3D printing is increasingly being applied in areas such as component manufacturing. In a less obvious application, Leighton (2017) describes how a startup by MIT grads is using 3D printing to make better, more sustainable clothes. Yet even the introduction of labor-saving machines won’t reduce the total number of supply chain professionals required. Rather, people will be needed to oversee these innovations.
Supply chain professionals also need softer skills such as change management, collaborative problem resolution and assimilation (Bolstorff, Trebilcock and Aschenbrand 2016). As supply chains expand, multilingual workers will become more valuable, as will individuals with training in social sciences, people with a stamina and affinity for travel, and those able to effect change and be diplomatic when dealing with people from other cultures. Likewise, as political tensions rise, workers who are excellent negotiators will be in demand.
The first place to look for new talent is inside one’s own organization. Assess employees’ hard and soft skills, as well as receptiveness to change, flexibility in job assignments and leadership potential. Some people will be interested in moving within the organization — sometimes to other geographic locations — while others will be content to remain in their present positions. To find the staff members with the most promise, it’s essential to develop a comprehensive skills database for at least a portion of the workforce.
Once selected, workers will need training that is both immediate (to make them job-ready) and ongoing (to retain proficiency). In some cases, this education will involve classroom sessions; however, much of it will consist of on-the-job coaching or mentoring. It may be up to the individual to study by reading manuals, watching videos or learning from colleagues.
Many companies look to universities to provide graduates who can quickly be of value. This is especially true in the area of supply chain management, as there are numerous graduate and undergraduate programs that cover a wide range of supply chain functions. Some schools are adding advisory councils with supply chain management professionals to offer guidance in employer requirements and provide internships and eventual employment. Unfortunately, these efforts may not be going far enough. There is a disconnect between industry leaders and academics that must be bridged if universities are to fulfill their role as supply chain talent providers, according to Fawcett and Fawcett (2016). Their longitudinal study was discouraging: “Study after study has shown that, for every new supply chain manager entering the workforce, two (or more) are retiring. Although supply chain programs are proliferating, today’s universities simply aren’t producing enough high-quality supply chain managers to fill the need.”
Moreover, supply chain faculty can only teach students who enroll in their classes. Children often choose a field of study that is related to their role models. But because the variety of career paths in supply chain management are not as apparent, this adds to the challenge. After examining when young people decide on a major field of study, Leon and Uddin (2016) recommend that industry work with academia to stimulate the interest of high school students in supply chain management careers.
The inability to teach soft skills such as communication, integrity, professionalism, leadership and work ethic is another big issue. Despite the addition of team projects, simulation games and study abroad programs to many curricula, when it comes to soft skills, there is simply no substitute for on-the-job experience.
Professional societies have certification programs designed to help practitioners who are interested in broadening and deepening their knowledge. They also provide a service to their members by listing job openings. Although this doesn’t necessarily add to the corporate knowledge base, it may help match supply with demand.
APICS recently added the position of director of academics and research to its staff. As Mike Ogle (2017) assumed this position, he described his role as focusing on the development of supply chain awareness at K-12 schools, as well as at colleges and universities, and providing the supply chain community with actionable thought leadership information to help supply chain professionals better understand the issues and opportunities that will affect their employers and careers.
Organizations that successfully plan and manage their human supply chains can enjoy numerous benefits (Arms and Bercik 2015), including
• enhanced employee productivity and retention, greater collaboration, heightened Customer Relations, boosted revenue, and overall performance advancements
• more effective deployment of talent and optimized workforce planning
• benchmarking of internal workforce data against external, industry-standard data to enable a more accurate overview of where and how workers are deployed
• the ability to pinpoint skills, talent gaps and future needs for more proactive strategizing and maximization of available labor categories
• a better understanding of contingent workers and the roles they fill in order to help avoid risk
• the establishment of work arrangements that are attractive to freelancers, project workers, independent contractors, interns and retirees — as well as expanding supplier networks to encompass a wider geographical area — for better talent pipelines.
Obstacles There are obstacles to building an effective human supply chain as well. For example, in a worldwide study of supply chain professionals, DHL found that one-third of the companies surveyed have taken no steps to create their future talent pipeline (Harrington 2017). The research also revealed that changing job requirements have the greatest impact on the talent shortage. The ongoing perceived lack of opportunity in supply chain adds to the difficulty of attracting new talent. Plus, many companies still consider supply chain management unimportant compared with other disciplines. Generational differences can be problematic, particularly because they require different approaches to recruitment and training (Doerfler 2017) and can add to uncertainty when developing human supply chains. Digital-culture deficiencies can lead to similar issues. In a survey of global executives, McKinsey discovered that these shortages manifest as functional and departmental silos, a fear of taking risks, and difficulty forming and acting on a single view of the customer (Goran, LaBerge and Srinivasan 2017).
People are naturally resistant to change. Finding the best way to manage that resistance is one of the more enduring challenges for managers (Judd 2015). More than a decade ago, one of the most cited articles about supply chains was written by a Stanford University professor (Lee 2004). He wrote: “When it comes to improving their supply chains, few companies take the right approach. ... Only companies that build supply chains that are agile, adaptable and aligned get ahead of their rivals.” Of course, agility, adaptability and alignment all require talented supply chain professionals.
Edmondson and Saxberg (2017) offer the following challenge to corporate leaders: “A new emphasis on lifelong learning is going to become increasingly central to your job. … Artificial intelligence (AI) and robotics are facilitating the automation of a growing number of ‘doing’ tasks. Today’s AI-enabled, information-rich tools are increasingly able to handle jobs that in the past have been exclusively done by people — think tax returns, language translations, accounting, even some kinds of surgery. These shifts will produce massive disruptions to employment and hold enormous implications for you as a business leader.”
It’s a good thing that ASCM Members are committed to the concept of lifelong learning. This concept will no doubt become the new normal of the supply chain management profession.
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19. Ogle, Mike. 2017. Senior Director of Academics and Research, APICS. LinkedIn.
Richard E. Crandall, PhD, CFPIM, CIRM, CSCP, is a professor emeritus at Appalachian State University in Boone, North Carolina. He is the lead author of “Principles of Supply Chain Management.” Crandall may be contacted at firstname.lastname@example.org.