Even today, with more disruptive technologies looming on the horizon, supply chains are mostly administered through systems that include dashboards and information delivered to remote tablets. What used to be a paper-based process has evolved into a more dynamic digital environment, with software specifically designed for supply chains. Now, warehouse and assembly line workers have been asked to take on a tech aptitude — to read dashboards, use predictive analytics or RPA tools, and look at data rather than rely on their experience and know-how honed over years on the job.
Overall, many respondents in our survey have confidence in the abilities of their supply chain teams, but about one in four do not consider their people to be experts at emerging technologies, a worrisome result given technology’s potential impact on supply chain efficiency. With more than half of companies planning to use drones and RPA within three years, a gap in digital skills is rapidly getting wider.
More broadly, respondents agreed that their supply chain leadership and workforce had the skills to manage an end-to-end supply chain today — but wholly 80% said their workforce needed new digital skills to maintain their competitiveness.
Digital skills are supported by an increasing need to communicate effectively, collaborate across internal and external boundaries, and connect with employees to maintain motivation, to name a few desired abilities. Without the ability to inspire and align broad networks of supply chain professionals, digital data goes only so far. While supply chain leaders cited creating a digitally enabled supply chain as their No. 1 priority, balancing interpersonal and technology skills wasn’t far behind, as the No. 3 priority.
And the challenges? The top two are budget constraints and talent. How does one build new operations and a new base of talent to power those operations — without a lot of money to spend?
To consider the options, we must first understand the interplay of the elements that make up a successful framework for the future.
Assessing what you do and how it’s done
Like most functions, the supply chain workforce is influenced by both the operating model (how you do things and how your business is set up) and the operating environment (how your workers are managed and work together). In other words: your business model and your workforce model (see figure 2).
Technology and processes are two vital components, but they are only two among many others. Oftentimes, the workforce experience side of the equation is neglected as companies modernize, even though it’s just as vital, ultimately, for delivering bottom-line results.
On the workforce side, you should also be considering:
- Talent alignment – Is your recruitment strategy designed around the talent you need in a more modernized supply chain, and are you factoring in interpersonal skills along with digital skills?
- Leadership and teaming – Does your supply chain consist of siloed groups, with leaders who are not on the same page, or too focused on just the process or technology side of change?
- Mindset – Are your people focused on the future or just the present? Do they see only what is rather than what could be? If they’re given the tools to sharpen their skills or gain new ones, will they seize on the opportunities?
- Purpose and values – Is your workforce motivated through a unifying mission or vision, with consistent messaging and integrity from the top?
- Performance and rewards – When workers get results and are successfully upskilled, do you have a career path or other ways to incentivize them to keep progressing?
Once we understand the workforce side as much as the business side, we can begin answering those questions with targeted strategies.
What to do
Effective supply chain leadership must consider the full digitally enabled supply chain, not individual functions, with the recognition that an enterprise needs a balance of digital and interpersonal skills from its workforce to execute optimally. For workforce goals, we heard from our survey respondents that enterprises are worried about a lack of budget and a lack of skilled talent in the future. It raises questions such as: what are you doing to upskill your current workers, and how are you recruiting new ones?
We recommend:
- Broaden your talent pool beyond the full-time demographic. You have a whole network of contractors in the marketplace that represents a source of value, although it may be complex to tap into, and it requires due diligence. Partnerships and outsource specialty vendors also are worth exploring in areas that you don’t need to compete in, or that don’t play to your core strengths. Also consider rotational programs in which people from one division go to another, co-location contractors and perhaps those who have retired from your company will want to continue working part-time if that option is available.
- Rethink where experienced employees can add value. With automation taking hold at some companies, lower-skilled workers — or even those with greater skills who are, nonetheless, exposed to risk from technological change — could be more productive in your company after a bit of training. For example, a leading telecommunications company started an internal training program amid the switch to digital for those who used to work on analog phone systems. Workers could opt-in to the new digital program, but it wasn’t mandated — others were cross-trained into other functions because the workers had knowledge about the business that would prove just as useful elsewhere. Don’t underestimate the appeal of security and stability for your workforce.
- Reconsider which competencies you need and recognize how different mindsets are worthwhile. Have your job descriptions evolved alongside your operations in the digital age? You may need to reassess which competencies are truly required to fulfill the needs of the business. Behavioral assessments can also prove useful in helping you determine whether your candidates also have the soft skills you need. Open new avenues by recruiting artisans or those with nontraditional skill sets, and don’t discount those who have the mindsets you need, if not the direct experience, because you can augment their skills with short, focused training sessions.
- Encourage career growth and continuous learning — and recognize top performers. Sometimes your best resource is the one you already have. Mentoring and career matching can help your existing workforce go to the next level. Creating cross-divisional teams helps generate an understanding of the supply chain from end to end and opportunities for formal and informal knowledge sharing. Training is crucial but acknowledge that everyone learns differently. Perhaps some will be content with a five-hour classroom session, while others would prefer shadowing other workers or would appreciate a bit of competition through gamification of the training. And, finally, promote and publicize high performers to show that those who strive will be rewarded.
Providing the necessary leadership
It is important to forge a plan to modernize your supply chain for the digital age and equip it with the right talent based on a deep understanding of business and workplace dynamics. And even then, you may encounter resistance, as can often be the case when the status quo is challenged.
To help drive change and overcome obstacles, you can:
- Learn from failure and celebrate risk-taking. Corporate culture is averse to negative outcomes. But when little is risked, little is gained. To innovate in the supply chain, corporate and supply chain leadership teams instead need to encourage appropriate risk-taking and, at times, lower growth or operational outcomes for the benefit of long-term supply chain performance.
- Understand the needs of stakeholders. Leaders should consider the goals and points of view of others as well. Partner with business units to craft supply chain strategies that work with their business goals, while also encouraging innovation and transformation.
- Tie development programs directly to business needs. To gain buy-in, demonstrate how your workplace efforts are connected to success on the business side of the equation by keeping in mind the bottom line.
- Rely on pilot programs. See what works — and what doesn’t — through a targeted rollout that can be expanded easily.
In the trifecta of people, processes and technology, your human workforce is the most complex — and the most easily overlooked. The right processes aligned with the right technology but executed by the wrong people with the wrong skills, is a formula for disaster. Like your supply chain, your workforce should be modernized with new capabilities and new priorities for this digitally enabled era.
Summary
A EY survey on the “Future of Work in Supply Chain” revealed some surprising results in how enterprises rate their supply chain talent, where they will hire in the future versus automate, how they are using technology in the supply chain, and top obstacles in meeting their supply chain workforce goals.
