If you haven't felt the pinch yet, you may soon. There's a link missing in the supply chain, and it may take time to repair. The gap is in talent, and the number of people needed to fill all levels of the vast number of supply chain and logistics jobs being created every year is surprisingly high.
Complicating matters is the fact that this is a worldwide, cross-industry issue. That means the electronics industry will have to go toe-to-toe with many other companies to onboard the right people with the critical skills required to handle global sourcing, demand planning, box-moving and everything else being assigned to supply chain and logistics professionals.
While some companies are proactively fine-tuning their new-hire recruitment process, working with universities to bring on promising graduates and beefing up their employee-training programs, the job gap will likely be an ongoing event for the next few years. Some companies — even the industry's biggest bellwethers — have been shocked to find the odds stacked against them, despite their corporate attractiveness, reputation, and the traditional ease with which they once were able to quickly fill positions.
Here's what the job picture looks like right now from a few different perspectives.
The job landscape
A recent study from the Georgia Center of Innovation for Logistics, titled “The Logistics of Education and Education of Logistics,” indicates that the United States alone will have approximately 270,200 logistics-related job openings that will need to be filled every year through 2018 to keep up with projected industry growth. Said more simply, that's more than 1 million job openings just in the United States over the next four years.
“This is not your grandfather's supply chain. Logistics is no longer just about trucking, and the supply chain is not just about purchasing,” said Page Siplon, executive director of the Georgia Center of Innovation for Logistics. “The opportunities within logistics and supply chain management today are much larger than what we can identify.”
But there's a downside, too. Supply Chain Insights found in “Talent: The Future Supply Chain's Missing Link” that there's currently a 15% turnover of supply chain employees. The average company in the study has four positions open for five months.
The Institute for Supply Management (ISM) sees a similar trend. During a Supply Chain Insights Global Summit panel discussion on the talent topic (you can see the video here), Cindy Urbaytis, ISM's managing director, said that in a survey her organization conducted, about 70% of respondents noted that they are leaving positions open, not because of hiring freezes brought on by the economic downturn but rather because of the lack of available talent.
That's just the high-level overview. The picture gets even murkier if you drill down a bit more.
The challenging undercurrent
First, the kinds of vacant jobs available run the gamut from forklift drivers in warehouses to senior-level supply chain operations executives with offices at corporate headquarters.
As several executives noted, people with strong planning, sourcing, and forecast management skills are in high demand. Because these jobs require depth of industry-specific understanding, academic know-how, and real-world global business experience, they are sometimes the hardest to fill.
Also, there's a whole class of other related open jobs poised to directly affect supply chain efficiency. For instance, think about the supply chain impact when you see numbers like these (data from the Georgia Center of Innovation for Logistics report that points back to a Boeing study): About 460,000 new airline pilots will be needed over the next 20 years to fly the world's aircraft, and more than 600,000 maintenance technicians will be needed to ensure those planes can fly safely.
If there are not enough pilots to fly planes, how will all those just-in-time air packages arrive on the production floor? It's the same story for truck drivers, rail operators, sea-vessel crews, and other transportation links vital to the electronics industry.
“There's clearly a need for not just specialized people but also people who have a broad knowledge about the ecosystem we live in today,” said Pascal Fernandez, vice president of business development at Avnet Velocity, EMEA. “Education is one thing, but having an end-to-end understanding of the current business environment and how the world works is also important.”
Another challenge is where companies are looking for talent and how they intend to patch the cross-generational holes. On stage at the Supply Chain Insights Global Summit panel discussion, Jake Barr, chief executive officer of BlueWorld Supply ChainConsulting, estimated that “between 25 and 33 percent of your people are at or beyond retirement age. That is a pipeline issue you cannot fix with one simple step.”
To deal with this gap, people are turning to universities. Schools with strong undergraduate and graduate supply chain programs have been, and still are, the place to go for reaping new talent. But guess what? There's a shortage there, too. The 7,642 educational institutions in the United States currently generate 75,277 formally trained, degreed, or certified workers each year in the logistics related space, noted the Georgia Center of Innovation for Logistics study. That fills only about 28% of the related job openings expected to be available every year. And there's a 6:1 demand-to-supply ratio for new college graduates in the supply chain field, estimated Supply Chain Insights.
Read the rest of this article in the Avnet Velocity e-magazine, “The Talent Pinch.”