When it comes to managing supply chain talent, companies have not been doing a very good job. And they are getting worse.
Supply Chain Insights, a consulting firm, has surveyed supply chain management professionals for each of the last three years on the state of supply chain talent. In 2012, 25% of respondents rated their company better than its peers in managing supply chain talent. This year, that statistic was just 18%. In 2012, 28% rated their company as worse than its peers. By this year, that figure had grown to 43%. “If companies do not get more serious about supply chain talent, it will become the broken link in the supply chain,” warns the report.
“I'm surprised we're not making progress,” said Lora Cecera, founder of Supply Chain Insights. The reasons for the low ratings fall into three categories: lack of management support, a poor recruitment process and lack of staff development. When it comes to the supply chain, many companies focus only on new, entry-level employees and high potential employees they want to fast-track to leadership positions, while neglecting middle management, which Cecera called “the nuts and bolts of the supply chain.”
Indeed, in the survey, 59% of respondents said that middle management was experiencing the greatest talent shortage. Often, companies adopt a retread strategy for middle management. “We just always assume that we can go to the market and get them,” said Cecera. “But we can't anymore.” In some of the most important areas, such as planning, it can take five months to fill an opening, she said.
Respondents rate executives' lack of knowledge and understanding, as well as the unavailability of good supply chain talent, as their top two pain points. Management is typically so focused on day-to-day operations that it can't focus on these areas, said Cecera. When it does focus on human resources, in general, it is looking to reduce headcount or increase revenue per employee in other ways.
Planning positions are the toughest to fill, according to respondents. Often, executive leadership does not understand the processes of demand and supply planning well, which leads to a low level of job satisfaction and high turnover in these areas. Management is “constantly chasing the next shiny thing and ignores the critical aspect of managing the demand and supply details,” said one respondent. There is “no investment in the supply chain side of the business.”
At the end of the report, Cecera offers several recommendations, including:
- Focus on improving the quality of the work life of planners. They are often only criticized; demand plan is off, the supply plan never meets the needs, and priorities are always changing. Feeling such little appreciation prompts high turnover.
- Build a supply chain human resources competency center. Only one third of companies have an HR function focused on the supply chain. Depending on how many supply chain employees you have, it can be worth it to have a dedicated team to help recruit, train and development talent. Proctor & Gamble, for example, has some 6,600 supply chain planners, said Cecera.
- Consider other disciplines when looking for supply chain talent. Graduates of the best supply-chain university programs are heavily recruited, so consider looking elsewhere. Look for graduates with general analytical skills, then train them in supply chain principles. “Supply chain leaders I've talked with say it's easier to hire entry-level people for customer service or transportation planning, then move them into supply chain planning,” she said.
- Cross-train supply chain talent. Organizations that actively train employees across various disciplines and help them develop new skills and career paths have a higher functioning supply chain organization.
- Have executives mentor supply chain professionals. Build a culture of coaching and mentoring; ask executives close to the supply chain to help.