7 minute read 8 Apr 2021
Businesswoman using digital tablet in high tech company

How disruption has reframed the future of work in supply chains

Authors
Dheera Anand

Principal, Business Consulting, Supply Chain & Operations, Ernst & Young LLP

Passionate about solving complex supply chain issues. Significant experience advising global clients and helping transform complex global supply chains while driving sustainable value.

Srihari Rangarajan

Partner/Principal, Supply Chain & Operations, Ernst & Young LLP

Harnessing the power of digital to solve complex business problems and drive value. Developing high-performance teams, built on collaboration, teaming, diversity and inclusion. Tennis and trivia buff.

7 minute read 8 Apr 2021

Digitization is one part of the equation, but that makes human talent more important than ever. Don’t invest in one without the other.

In brief

  • The pandemic put supply chains in the spotlight, and half of executives in an EY survey say they are rethinking their strategies to boost agility and resilience.
  • Companies are investing in end-to-end visibility and other enabling tools. But cutting jobs should not be the goal: tech and human skills work best in tandem.

Seemingly in an instant, the COVID-19 pandemic brought trends that were once on the horizon right into our laps: remote work, greater automation and supply chain improvements, including the need for increased visibility and better forecasting capabilities. Many manufacturing and distribution organizations strived to digitize as quickly as possible. Yet as the crisis eventually recedes, the future of work at some companies is at risk of regressing instead of advancing.

Those who are forward-thinking will build on the lessons learned from the pandemic. To illustrate, in December 2020, an EY survey of 200 senior supply chain executives at large companies showed that 60% believe the supply chain has increased in importance. Half are rethinking their entire supply chain strategy as a result. And while modernization efforts with new technology are deeply important, that’s just one piece of the puzzle. Success also hinges on whether your most timeless asset — human talent — remains at the center of your strategies. As the tools and processes necessary for the digital supply chain keep evolving, professionals with deeper and more diverse skill sets become critical, especially as remote and distributed teams are expected to work together seamlessly.

Here are three areas to keep top of mind as the future of work becomes clearer.

1. Safety and fairness should be a bigger priority

Over 2020, efforts to contain the spread of the virus in workplaces effectively sheltered the managerial class and other white-collar workers through work from home mandates. Yet those who worked in plants and distribution centers — the engines of the supply chain — largely needed to remain on-site, also incurring transit and other costs.

Over the long term, separating different types of workers physically can expose points of contention around fairness, not just safety. Meanwhile, such a rift makes manufacturing and distribution jobs even less appealing to the tech-minded younger generations needed to fill them.

As a short-term solution, some companies are offering one-time bonuses to frontline workers — for instance, eligible employees at a US chemical manufacturer received a special recognition cash payment of $1,000. Profit-sharing — based on balanced scorecard results — is also a tool that may help improve productivity without compromising safety, quality and employee morale. But the more significant opportunity over the long term is using technology to reevaluate how work is done, who does it and where.

Digitization enables more decisions to be made outside of the physical plant. For instance, digital twins are replicas of a factory, network of plants or the full supply chain that utilize data from internet of things (IoT) sensors on equipment and use artificial intelligence to help make better decisions. IoT devices also offer greater visibility into supply chains and operations when data are aggregated through managerial and executive dashboards. Within the plants themselves, greater automation can reduce the number of people on the shop floor, and process innovation and smart handheld devices can minimize touchpoints, especially in environments where workers need to be mostly working side by side.

2. Humans and digital — not just digital

Inventory management shows the importance of human talent even as digital becomes more important. In most organizations today, dozens of entry-level supply chain planners are likely making product decisions, manually and without complete information, in an ever-changing supply chain. These planners, fearful of stockouts and lacking visibility up and down the supply chain, might pad inventory by 20% across multiple categories.

Instead, imagine equipping a few planning experts in the organization with an artificial intelligence (AI) engine that pulls in and processes social media or weather data, and marketing and customer patterns to plan for optimum inventory nodes across the entire supply chain. The planning role, now requiring technical understanding and supply chain expertise, is elevated, helping to drive improvements in working capital, customer service, employee satisfaction and productivity.

One leading global pharmaceutical company has headed down this path already. In a multiyear supply chain automation effort, sensors coupled with machine learning programs will be deployed from end to end to gather data about inventory distribution practices and availability for every SKU, thereby providing visibility and improving agility in its inventory and distribution processes.

With new tools and greater responsibility, your human talent needs an evolving set of skills. Adopting these four steps for automation and technology transformations can help organizations navigate and prepare their workforce:

  1. Alignment and engagement: Define a purpose for emerging technologies, articulate their use, and then build an engagement strategy that instills understanding and dispels digital myths. User-centric messages that outline the roadmap and the potential impact and benefits of automation are a vital step in adoption.
  2. Impact assessment: A change roadmap needs to be tailored and scaled up or down depending on the impact on various roles. Continuously iterating an action plan based on evolving workflows and defining specific measures to track benefits will be important.
  3. Change agent network: Change agents are the “face and voice” of transformation by delivering and reinforcing key messages and embedding changed processes. Mobilize team leaders and process owners to create a change agent network and drive the adoption of improvements and technologies.
  4. Digital incubator: A rapid and scalable incubator environment to embed new workflows can help employees cope with the transition. Processes must be integrated with business teams to save time before going live. Based on testing, performance metrics should be agreed upon by program owners and business units.

3. A new approach to your talent and learning plans is required

New roles and required skills are often treated as an afterthought after technologies and structures are already put in place. Roles and skills should be debated and reexamined as plans are developed and as the organization’s needs shift. We recommend approaching your talent and learning plan through a lens of now, next and beyond.

Now: Define and dimension the roles you need to succeed and identify and address any skill/capability gaps

Supply chain leaders should collaborate with local HR teams to update roles and responsibilities and clearly highlight the shift in time spent on repetitive tasks to more value-add activities. Determine how today’s talent can be developed for tomorrow’s roles and augment them with new talent wherever necessary.

Upskilling, redeploying and hiring people will enable the organization to become future-ready while simultaneously empowering employees. Reframe conversations with professionals around not just what’s good for the business but what’s good for them as well. This is an opportunity for employees to grow and gain marketable skills. Set a clear development path for combining strategic thinking with technical understanding, and make sure to set performance incentives along the way.

Next: Create a self-service mechanism to upskill in a remote environment

Coaching is obviously one way to spread knowledge, but having online resources on tap 24/7, where professionals can seek out learning on their schedule, is worth the effort. Data-driven decision-making, cloud technologies, blockchain, AI and algorithms are just some of the topics that will be useful to learn more about as supply chains evolve. Interactive training modules can be enriched with gamification in the form of badges, challenges and leaderboards to make learning more enjoyable.

Citizen developers offer another way forward, in which companies incentivize their people to upskill and innovate. Citizen developers within the organization should be empowered to take their knowledge of the business and join it with learning about analytics, data science and emerging technologies. These professionals already know what aspects of their jobs add value versus those that do not. They can be compelled to innovate their way to a role that’s better for them and the business.

Beyond: Link your purpose and your culture to your supply chain

In a JUST Capital survey, 89% of Americans agreed that the COVID-19 crisis “is an opportunity for large companies to hit ‘reset’ and focus on doing right by their workers, customers, communities and the environment.” These feelings existed before the pandemic but have only intensified since. And while “supply chain” may have been an abstract concept to the general public in 2019, today, there is a broader acknowledgment that supply chains are the lifeblood of the economy, connecting vital goods such as food and vaccines to communities.

In a 2020 article, EY professionals discussed that once a company has developed its purpose, it must be communicated clearly, candidly and consistently to customers and embedded as a central part of the overall customer experience. That could be a commitment to speed and efficiency or to reach traditionally underserved regions. A motivating purpose is also crucial for driving employee engagement. These next steps pave the way for a better future for your company and other stakeholders, including broader society.

Summary

Disruption can arrive suddenly and circle the globe, upending demand and logistics, and throwing workplaces into chaos. The actions you take today, with humans and technology working in harmony, can unlock value across the supply chain, no matter what form disruption takes tomorrow.

About this article

Authors
Dheera Anand

Principal, Business Consulting, Supply Chain & Operations, Ernst & Young LLP

Passionate about solving complex supply chain issues. Significant experience advising global clients and helping transform complex global supply chains while driving sustainable value.

Srihari Rangarajan

Partner/Principal, Supply Chain & Operations, Ernst & Young LLP

Harnessing the power of digital to solve complex business problems and drive value. Developing high-performance teams, built on collaboration, teaming, diversity and inclusion. Tennis and trivia buff.