The late Grace Hopper was as remarkable as she was extraordinary. While this pioneering Computer Scientist and Rear Admiral will forever be remembered for developing COBOL computer programming language, it is her wit and wisdom that never fails to strike a chord with me. [i] Perhaps it was assuming the mantle of leadership in the crucible of war that instilled in Hopper an acuity of vision and prescience which still resonates today. One of her famous observations, “The most dangerous phrase in the language is, “We’ve always done it that way”" is so perceptive that it could have come from any social anthropologist. [ii] However, for the purpose of this blog post, it is not behavioural scientists that should take note of Hopper’s wise words, but Supply Chain Managers everywhere. For a number of supply chain storms are brewing – squalls which are so potent that according to leading Supply Chain thinkers, they could merge to create the perfect storm. [iii] [iv]. In a recently published white paper, supported by the Centre for Supply Chain Research and the Smeal College of Business, Kusumal Ruamsook and Christopher Craighead predicted that four separate Supply Chain storms, have the potential to create an unprecedented logistics tempest. [v] Thankfully these four cyclones, which threaten the Global Supply Chain talent pool, are yet to converge. However, these gun-metal clouds continue to loom large on the horizon, and if left unchecked, could dramatically reduce global Supply Chain talent reserves. So what are the distinct logistical hurricanes that could trigger this unprecedented and potentially catastrophic event? And how has the underlying economic and political weather added to their destructive power? Let me begin by summarising the six greatest challenges that today’s Global Supply Chains face in the search for supply chain talent.
Demand for new talent outstripping supply
A recent survey carried out by the University of Tennessee, for instance, revealed that 90 per cent of Chief Executives believe that they should be doing more to attract Supply Chain talent. And their fears are certainly justified. Currently the demand-to-supply ratio of jobs to qualified individuals is six to one. But astonishingly, in a few years’ time, it could be as high nine to one. [vi] But how did this disparity occur? In a nutshell globalisation, which began to impact supply chain 20 years ago, led to outsourcing, which in turn created Supply Chain complexity. This increased complicatedness led to the logistics landscape changing. Supply Chain Management roles were redefined to address the new challenges that the industry began to face. For many people, making the leap from managing linear supply chains to vertical integrated global ones, was simply too great. Hence a skills shortage.
Talent brain drain
An even more staggering statistic is the gap between the demand for Supply Chain professionals and their actual availability. Take these stats from Industry Week for instance. It states that there are around 76 million Baby Boomers in the United States. This post World War II generation, born between 1946 and 1952 [vii], it says, is retiring at a rate of one every eight seconds. However, if you’re struggling to visualise that last stat, let me provide you with another. Indeed, to illustrate that the gap has become an ever widening chasm, 25 to 33 per cent of America’s Supply Chain workforce is either at, or has already passed retirement age. This, say, Ruamsook and Craighead will lead to 40 million fewer Supply Chain professionals entering the workforce and in particular a hollowing-out of middle management roles, where there is a current shortage in 61 percent of roles. [viii] While, in Europe the outlook is just as bleak. Christiane Beimel, DHL’s Head of Value Added Services, says, “Supply Chain managers are retiring faster than they are being replaced. There simply aren’t enough young people to backfill the pipeline.” [ix]
An absence of talent
To address the talent shortage, many large enterprises have been forced to parachute in employees with little to no prior knowledge, experience or academic training into influential Supply Chain management positions. Not only does this create risk, even if they perform well in their roles, a lack of formal training may prevent them from making the strategic decisions that really set a company apart from its rivals.
Technology skills divide
The world is changing at a relentless pace, and Big Data and cloud-based technologies are the very heart of this technology revolution. According to a study by McAfee and Brynjolfsson, for instance, those enterprises which had embraced Big Data analytics were on average 5% more productive and 6% more profitable than their competitors. [x] But there’s the rub. While the case for Big Data is overwhelming, the analytical skillsets needed to embed Big Data in Global Supply Chains is in short supply. Alarmingly, in a recent article, Ruamsook and Craighead state that in the United States, over half of all new jobs in the USD$26 trillion dollar per year industry will struggle to be filled, as only 20 per cent of workforce possess these much-coveted skills. [xi]
Academia: A false dawn?
It is hoped that education can be the long-term panacea that addresses the talent shortage in Global Supply Chains. But is it fair to place such a large burden on the shoulders of academia? David Closs, a professor of Supply Chain management from Michigan State University, thinks not. He believes that it is impossible for university courses to prepare students with all the skills they need to prosper in ever complex Supply Chains. [xii] He says, “If you’re in Procurement, you’d better be good at Procurement. But these days, it also means that you have to manage Corporate Social Responsibility and understand political issues like trade, taxation and customs.” And his view is echoed by Shay Scott, the Managing Director of the Global Supply Chain Institute at the University of Tennessee. "If we listened to our advisory board, and took to the letter every skill they want our undergraduates to have, we'd have to offer a 15-year programme." [xiii]
Logistics not seen as a serious career option
But it’s not just that some university courses aren’t vocational enough to prepare students for a career in Logistics. In my opinion, to an extent, its problems are self-perpetuating in that the industry has an image problem. For example, try asking someone who doesn’t work in the Logistics industry to define Supply Chain and you might be surprised by their response. Most of us work in businesses with a Supply Chain of some sort, but it never fails to amaze me how few people actually know how one actually functions. A general lack of industry knowledge means that most people working in the industry are engineers or business people who have stumbled into the profession. This also means that very few people actually make the conscious decision to study Logistics and Supply Chain Management courses. In my view, it’s time for the industry to accept that it has an image problem. To young people considering their careers, it feels like an arcane concept, instead of an exciting and fulfilling profession that has the potential to transform economies and change lives. After all, to quote Cranfield School of Management Professor Martin Christopher. It is ‘Supply Chains (that) compete, (and) not companies.’ [xiv] Supply Chain professionals need to go into schools and recount this fascinating and inspiring narrative to young people: for they are the lifeblood of the industry and the Supply Chain professionals of tomorrow. Now I have outlined the trends that are threatening supply chain talent pools, what are the solutions? In my next blog, I’ll focus on six measures you and your enterprise can take that will help to insulate your business from the supply chain storms of tomorrow.
Sources and Citations
[i] Grace Hopper (Bio.) http://www.biography.com/people/grace-hopper-21406809 [ii] Grace Hopper Quotes (About Education) and Grace Hopper (Bio.) http://womenshistory.about.com/od/quotes/a/grace_hopper.htm http://www.biography.com/people/grace-hopper-21406809 [iii] Supply Chain 247 Forecasting a Supply Chain “Perfect Storm” http://www.supplychain247.com/article/forecasting_a_supply_chain_talent_perfect_storm [iv] ‘Solving the Talent Crisis’, is based on research by Lisa Harrington, a senior research fellow at the Supply Chain Management Center, University of Maryland. [v] Ruamsook, K. & Craighead, C. (2014). Forecasting a Supply Chain Talent "Perfect Storm". Supply Chain 247, [online]. Available at: www.supplychain247.com [accessed on 15 January 2015]. Kusumal Ruamsook is a Research Associate at the Center for Supply Chain Research, Smeal College of Business, at The Pennsylvania State University. Christopher Craighead is the Director of Research at the Center for Supply Chain Research and the Rothkopf Professor and Associate Professor of Supply Chain Management at the Smeal College of Business. [vi] Harrington, L., & Smith, R. H. 2015. Automotive Industry Brief: Solving the Supply Chain Crisis. Maryland: DHL & University of Maryland. [vii] Baby boomers https://en.wikipedia.org/wiki/Baby_boomers [viii] Supply Chain Insights LLC, August 2014 [ix] The Loadstar: Making sense of the supply chain http://theloadstar.co.uk/supply-chain-threatened-by-perfect-storm-as-talent-leaves-industry And - Harrington, L., & Smith, R. H. 2015. Automotive Industry Brief: Solving the Supply Chain Crisis. Maryland: DHL & University of Maryland [x] Data Science, Predictive Analytics, and Big Data: A Revolution That Will Transfom Supply Chain and Management By Matthew Waller and Stanley Fawcett https://www.researchgate.net/profile/Stanley_Fawcett/publication/264340780_Data_Science_Predictive_Analytics_and_Big_Data_A_Revolution_That_Will_Transform_Supply_Chain_Design_and_Management/links/547cb9f50cf27ed978622d13.pdf
[xi] Supply Chain 247 Forecasting a Supply Chain “Perfect Storm"
[xii] Noble, D. 2016. The Skills Shortage Facing Global Supply Chains. Supply Chain Digital, [Online] 1 (1). pp.1. Available at: http://www.supplychaindigital.com [Accessed on 2 December 2015].
[xiii] Noble, D. 2016. The Skills Shortage Facing Global Supply Chains. Supply Chain Digital, [Online] 1 (1). pp.1. Available at: http://www.supplychaindigital.com [Accessed on 2 December 2015].
[xiv] Logistics & Supply Chain Management
By Professor Martin Christopher
Published by Pearson Books
Prentice Hall Financial Times
ISBN 978 0 2783 73112 2