Supply Chain Frontiers issue #38
Amid one of the deepest recessions ever to hit the United States and with the official unemployment rate approaching 10%, companies should have little difficulty retaining key employees. Why then are supply chain leaders citing talent recruitment and retention as one of their top concerns in 2010 and beyond?
Initial research carried out by the MIT Center for Transportation & Logistics (MIT CTL) points to a combination of reasons for the skills shortfall. The net result is a “talent tsunami” that could hit the industry in the next few years. This October, MIT CTL will host a symposium to explore the issues and possible solutions.
The Great Recession has leant more urgency to these issues. Senior executives are well aware that there is pent-up demand for new career challenges, and many of the companies that shed staff during the depths of recession now face a shortage of talent. Moreover, some of the top managers that enterprises let go were recruited by competitors. “We have picked up an amazing amount of talent in the last 18 months. So many companies have cut back and seem to be doing it without regard to people’s abilities,” says the CEO of a third-party logistics services provider.
One of the main areas of concern is keeping up with the changing mix of capabilities required to fulfill the supply chain management role. Increasing market uncertainty, globalization, and shifts in workplace demographics are among the external drivers of this new professional profile. Internal factors include the emergence of supply chain management as a bridging function that interacts with other corporate disciplines, and its increasing participation in strategic decision making.
Practitioners not only require a much broader skills base than was the case a decade or so ago, but also must be functionally proficient. For example, they need both “hard” analytical and “soft” leadership skills—a notable change in a profession that relies heavily on quantitative analysis. They must be adept at “managing ambiguity” in these uncertain times and appreciating the big picture. In addition, managers must be able to communicate horizontally and vertically within the organization, and across communities of trading partners. “Suddenly, you are looking for people who are general business managers with high-order diplomacy and commercial awareness skills,” says one supply chain leader.
The international dimension of the job is increasingly important. As companies and their supporting supply chains become more global, managers can no longer assume that all of their reports are domiciled in the same country. An aptitude for dealing with different cultures and communicating across times zones is among the many capabilities that a global manager must possess.
Finding individuals who can excel in this highly demanding environment can be challenging. On the plus side, the number of options for recruiting supply chain graduates and undergraduates has increased dramatically in recent years with the introduction of more specialized programs at colleges and other institutions.
In the wider educational community, however, the industry has some difficult obstacles to overcome. A lack of awareness is one problem; encouraging young people to enter supply chain programs is a tough sell when they have scant or no knowledge of the profession. Supply chain’s reputation as a technical role can be a deterrent for potential recruits. “People often think it is only moving boxes, something to do with transport and logistics; it almost gets narrowed down to the warehousing and delivery piece,” observes a senior supply chain executive.
Another source of talent is in-house training, educational, and enrichment programs that offer a way to acquire the skills needed to climb the career ladder. An example is job rotation arrangements that give individuals wider experience by exposing them to different corporate roles. For instance, a leading consumer electronics company gives supply chain personnel assignments in sales “to broaden their knowledge about what it really looks like when facing the customer directly.” Providing opportunities for individuals to work creatively in cross-functional teams is another way to enrich the supply chain role.
Educational programs can also yield organizational benefits. In one company, “the best and brightest” are assigned for 18 to 36 months to a program that leads to Six Sigma black belt certification. “And for that time, they will just work on process improvement projects across the company,” explains the organization’s CEO.
The Great Recession pushed the supply chain talent crisis on to the back burner as companies shifted their focus to survival. Now these issues are back on the agenda as leadership teams consider how they will navigate the road back to growth. Moreover, the market changes that have increased the demand for certain skills are likely to intensify over the next few years. In response, the supply chain profession needs to raise its profile and develop strategies for building an efficient talent pipeline that supports long-term growth.
This article is based on an MIT CTL white paper titled, “Are You Prepared for the Supply Chain Talent Crisis?” which was published this fall. MIT CTL’s Supply Chain Talent Management symposium will take place on October 14, 2010, on the MIT campus in Cambridge, MA. For information on the event and/or the white paper, contact Jim Rice, Deputy Director, MIT CTL, at: jrice@mit.edu, or telephone: +1 617 258 8584, or Frontiers Editor Ken Cottrill at: kencott@mit.edu, or telephone: +1 215 493 7555.