Hitting Some Limits
Attracting and retaining employees in the supply chain is not an easy task. But in a field with limited opportunities, what can companies do to keep a hold? Deepak Malhotra explains.
In the last few years the placement industry has been doing a poor job in offering talented employees for the logistics industry. Similarly, in order for the logistics sector to attract, develop and retain the talent it requires, it must compete for attention in an environment where other sectors and industries have already, or are about to, initiate awareness and recruitment campaigns to address their talent shortage.
Increasingly referred to as supply chain management, the level of employees required in this sector includes the following seven sub-sectors:
- Logistics Information Systems
- Warehousing and Distribution
- Inventory/Material Control
Let’s look at the key human resources challenges in supply chain management. The supply chain sector is highly fragmented which translates to implications for the human resources. There is a general lack of awareness and understanding of the sector thus making it difficult for employers to attract, develop and retain supply chain specialists. It is an emerging occupation that requires special skill-sets. In terms of talent management, this sector has limited scope as it offers further education and training only to a certain extent. But most important of all, is the limited talent that engulfs this sector. A look at SWOT analysis of this sector will also tell us a few things.
- Strengths of the sector are Workforce, Investment/s in training & development, etc
- Weaknesses of the sector are lack of strategic workforce, training, general awareness of logistics, and pace with technology usages to name a few.
- Opportunities are arising in emerging best practices, growing profile of logistics, introduction of curriculum in school & colleges, best practice sharing forums & untapped labor.
- Major threats are fragmentation, adaptation to technology, scarce resources & talent management strategies.
The key human resources issues in the sector can be clubbed as attraction and retention; education and training; keeping pace with technology; and succession and career planning.
If we look solely at attraction and retention, there are a few points that matter here. For instance, attracting and retaining younger and skilled employees, the growth of the aging workforce, managing senior level experienced specialist roles (eg. purchasing – sourcing, quotation, valuing bids, etc.) that can be difficult to fill, and, finally, another set of difficult to fill processing positions such as skills of transitioning product from raw form to end product quickly.
Given that attraction is a current and anticipated challenge, retention strategies become even more important to maintaining the critical level of workforce required and manage the amount of recruitment activity required. The main recruitment and retention challenge is competition amongst organizations for resources, as the most common retention and turnover issues are competitors actively recruiting employees in other organizations, and employees favoring supply chain function of other organizations. Competitors actively recruiting supply chain employees from other companies are a concern for small organizations, while losing employees to the supply chain function of other organizations is the most common concern for medium sized organizations. This competition for resources is a significant issue given that employees within the function appear to be ready to explore new opportunities both inside and outside of the logistics sector. In this regard, 70.6 percent of employees indicated that they plan to explore other logistics opportunities and 45.6 percent of employees plan to explore opportunities outside logistics. Operational and tactical employees were more likely to indicate plans to explore new opportunities (either within or external to logistics).
Some common reasons cited by employees for leaving the logistics function focused are promotion and career growth; better or new opportunities; new challenge or need for a change; compensation; job stress and pressure; and retirement.
Going by a survey conducted by Personal Benchmarks, employees’ attraction for current employer has the following percentage: Opportunity for career advancement – 40 percent; Growth potential of company – 32 percent; Challenge of position – 37 percent; Reputation of company – 29 percent; Location – 23 percent; and Pay and benefits package – 23 percent.
From a size perspective, a common activity for small organizations is providing a flexible work schedule, while medium and large organizations provide a career path.
It should be noted that few participating employers indicated implementation of initiatives targeted at attracting and/or retaining supply chain employees. Of those that did, the types of initiatives implemented included types of training, incentives, and student placements.
Applying the Timeless Principles of Sun Tzu’s Art of War to Achieving Excellence in 21st Century Supply Chains:
Several years ago, Dr. Eli Goldratt said, “In the future, competition will be among supply chains.” Over 2,500 years ago, Sun Tzu included mastering logistics as a cornerstone of successful operations. What can we learn from a military theorist of 500 BC that will strengthen our supply chains in the 21st century?
To apply this treatise on strategy and war to supply chains, we will look at some key passages in The Art of War and substitute supply chain management for war; the company/corporation for the state; and leaders for generals. With these substitutions there is some great advice in Sun Tzu’s work that applies to today’s supply chains.
Using our substitution these words can be rewritten as: “Supply Chain Management is a great matter to a company; it is the road to prosperity; it important to the survival or ruin of the company, and therefore, supply chain management must be examined.” Sun Tzu lists five factors that must be mastered to be successful in any operation:
1. The Way or the Tao: In supply chains this is the link that brings the thinking of the workers in line with the vision and strategy of the supply chain leaders. 2. Climate: In Sun Tzu’s day this concerned how to operate in the different seasons and different climatic conditions. To be successful in today’s supply chains, leaders must be able to operate in all business climates, worldwide. 3. Terrain: In 21st Century supply chains, leaders must be able to master the global operating environment and the supply chain infrastructure in order to survive.4. Command: Sun Tzu equated command with “generalship.” Using our substitution of terms, this means that to be successful, companies must have quality leaders in charge of their supply chains. We will look at this area in greater detail when we look at the major themes of The Art of War.5. Regulations: Sun Tzu included logistics as part of the regulations that must be mastered. Since the term supply chain had not been invented yet, the term logistics applied to all of the functions that we equate with supply chains. These key threads include Matters of Vital Importance, Clear Communications, Leadership, and Employee Training.
This process, a simple to implement system, has eight steps: What was the plan? What actually happened? What went right? How do we sustain those areas? What went wrong? This could be major or minor but you still want to improve the performance. Why did it go wrong or not according to the plan? How do we fix that in the future? Who is responsible for fixing the problem? What is important here is not who made a mistake, but rather, what went wrong and who will be responsible for ensuring that the fix: a) fixed the problem and b) did not create a bigger problem.
The Road Ahead
The Develop theme has two components. The first focuses on building the capacity of supply chain logistics workforce to support a transition to a more value-added and knowledge-based economy.
- Develop, promote and support programs that prepare under-represented groups such as women, aboriginal people, immigrants, people with disabilities, and underemployed persons for employment in the supply chain logistics sector (e.g., pre-employment and pre-apprenticeship training).
- Increase support for individuals employed in the supply chain logistics sector to upgrade their knowledge and skills, including supervisory, management, apprenticeship and skilled trades training
- Support development, delivery and access to a variety of learning systems through a range of innovative delivery models including the Internet.
- Work with government to fund supply chain logistics programs at the secondary and post-secondary level.
- Work with educational institutions to ensure that training programs align with industry needs and standards and are, whenever possible, articulated along a career pathway
- Develop a retraining program to assist late-career, mature workers to shift into a career within the supply chain logistics sector.
- Support the development of regional industry clusters or networks to address common problems such as training, labor shortages, productivity etc., facing companies in the supply chain logistics sector.
- Proactively identify and plan to address emerging workforce development needs. These may be issues such as the impact of new upgraders or other major industrial expansions on the logistics industry. It might also include the use of changing technology to address environmental concerns.
- Identify and encourage the application of effective practices to help employers improve the retention of a more diverse labor force
- Support employers in implementing human resource practices that encourage mature workers to maintain employment (i.e., offer part-time or flexible work arrangements, phased-in retirement plans, mentoring and training roles, etc.) to ensure retention of technical and corporate knowledge in supply chain logistics sector.
- Work collaboratively with community agencies representing the interests of under-represented groups to identify and develop strategies to attract and retain workers from under-represented groups.