Preparing Skills for the Future of Supply Chain Management

The following guest blog commentary is contributed by Bob Ferrari, Founder and Executive Editor of the Supply Chain Matters blog and Managing Director of the Ferrari Consulting and Research Group LLC.

In October, I had the opportunity to speak at the APICS 2015 conference. My topic was: Positioning Your Skills for the Future Needs of Supply Chain Management, and in this 21^st Century Supply Chain guest blog, I wanted to share some of my key messages to this audience as well, since this is a topic frequently brought up.

There is no question that supply chain talent development has become a top of mind multi-industry challenge that takes on different dimensions for both attracting and retaining key talent. The debate is often focused on whether strategies should address a perceived “skills gap” or a “training gap.” But first, dwell for a moment on the various megatrends and converging forces impacting multiple businesses today. More technology-empowered and demanding customers have added to increases in the clock speed of business in multiple dimensions. Business growth and profitability stems from newer products, innovative services, and emerging markets. Speed is now a compelling requirement in all dimensions of supply chain business and decision-making processes.

There is now increased senior management awareness to the strategic importance of the supply chain’s contribution to required business outcomes. With that recognition is keen awareness as to availability and retention of needed skills and talent, but individual strategies and action plans vary across industry settings. With the “third wave” of technology convergence currently underway, increased computing, storage and cloud-based computing is now available at lower cost. The explosion of smarter mobile computing devices and platforms with the ability to leverage more real-time data has opened the perspectives of the “Internet of Things” (IoT), connecting digital applications with physical devices. We have reached a point where technology can support continuous synchronized planning and execution across the extended supply chain. The advent of the IoT opens opportunities for connecting manufacturing and service related physical objects to supply chain related planning and decision-making needs.

The challenge, however, is having the trained and experienced resources to effectively leverage all of this new technological capability. Across industry supply chains, teams struggle with keeping up with this faster clock speed of decisions, overcoming the increasing complexity and risks of supply chains and generally responding to constant change. There are needs for more responsive planning and synchronized execution, linked to desired business outcomes in quality, service and performance results. At the same time, there are the realities that supply chain teams may be drowning in too much of the wrong data, tracking too many unessential performance metrics and lacking in playbooks and response scenarios to certain events. The reality is that business, technology and supply chain business challenges are out-distancing current skill and talent needs. The U.S. Census Bureau predicts that more than 60 million “boomers” will exit the workforce by 2025, while only 40 million will take their place. That is one dimension of the skills gap, namely the built-up knowledge of how business and supply chain processes interact and yield outcomes and how decisions get made, is walking out the door to enjoy retirement. In some sense, it can be a supply and demand challenge. However, the megatrends in business and technology are creating new and more demanding jobs with far more specialized, technology-grounded skill needs. Articulated essential skills now reflect on a broader combination of both hard and soft skills. There are needs for deeper cross-functional business, supply chain and product management knowledge that span beyond a single function or a single international business culture.

There are needs for cross-organizational team leadership, collaboration and change management skills, along with the ability to leverage appropriate technology tools for the challenge at hand. Yet, employers demanding these broad-based and specialty skills sometimes balk at adequate compensation or training needs. I advocate that approaches to closing the skills gap require stronger partnerships among employers, training organizations and employees on skill-based needs, compensation and development plans. One action that can help is defining job needs on the basis of individual skill needs as opposed to minimum experience requirements. The recruitment process should be one of matching skill potential, with compensation tied to skill mastery. In preparing for my talk, I noted a late 2011 study from Accenture that observed only 21 percent of U.S. workers received any formal training in the prior five years. While that study is arguably dated, my informal polling of audiences indicates this situation continues. This is one facet of the training gap. Employees who desire to learn essential new skills may not be afforded such opportunities. This gap is even more acute for small and medium sized, but growing, businesses that may not have the financial flexibility to support needs for continual training. At the same time, data reveals that employers and supply chain management leaders fear that if they invest resources to train people in desired skills, people will quickly jump ship to other employers who require such skills.

The opening keynote of this year’s APICS conference was a chat with noted executive, mentor and author Jack Welch. I penned a recent Supply Chain Matters commentary which provided specific highlights of Welch’s wisdoms for our community. In an unscripted way, he provided the response to the above challenge. He flatly stated that supply chain professionals should be valued in compensation since they are rather important to the business. Welch challenged these leaders to stop nagging about the loss of people and rather, turn efforts and resources toward establishing an organization that is fun to work within, caring passionately about your people, valuing a diversity of skills and people, and removing organizational barriers that get in the way.

My closing recommendations are that supply chain professionals must make skill development a personal mission and goal. Collaborate with management leaders on an individualized skills and learning path, and seek out opportunities to gain added hard and soft skills. Constantly take advantage of online, in-house or on-the-job training opportunities. Employers need to start defining jobs in skills needs and expected performance parameters for both current and future organizational needs. Engage in strategic workforce planning and in individualized learning and career paths. Foster a culture of knowledge sharing and facilitate mentors for up and coming professionals. Make the supply chain both a fun and rewarding place to work and support efforts for more attractive compensation and reward programs that emphasize talent and skills development. One of the most complex and technologically equipped aircraft in the world, the Airbus A380, still requires a skilled pilot and co-pilot with a window to the sky to ascertain reality and sometimes make critical decisions. There will always be a need for skilled professionals.

Additional Resources

• Supply chain management frequently asked questions