Supply chain executives are worried about a weak talent pipeline.
More than half of executives at US-based global companies say they are not confident their supply chain organizations have the competencies they need today, according to the 2015 Supply Chain Survey from Deloitte.
As a profession, supply chain management finds itself in something of a crisis. Just as the discipline is gaining stature within enterprises, many organizations are confronting critical shortfalls of talent. Some observers believe the demand for supply chain professionals might exceed supply by a ratio of six to one.
Years of headcount reduction, training budget cuts, and the retirement of highly skilled individuals have all contributed to the shortage of supply chain talent. At the same time, a combination of accelerating technology development and widespread experimentation with new operating models are expanding the scope of supply chain operations, creating a demand for new types of supply chain employees—a trend that is only expected to accelerate in the future.
“Margins are so thin in many industries that any technology or operational change that can provide a competitive advantage—whether its 3D printing or advanced analytics—is critical. And those capabilities are inherently dependent on talent,” explains Kelly Marchese, a principal and supply chain leader with Deloitte Consulting LLP.
It’s not a matter of sheer numbers, rather, it’s a matter of shifting needs as rapid changes in supply chain activities, tools, and goals call for new skills in management and leadership.
The Deloitte survey evaluated technical capabilities ranging from real-time shipment tracking to artificial intelligence. Optimization tools and demand forecasting are the most widespread tools currently in use, but that is predicted to change in the near future. The biggest gap between current strengths and anticipated need is competency in technical analytics. This is seen as the most important technical competency in the near future; only 46 percent of supply chain organizations in the study consider their skills in analytics to be “very good” or “excellent.”
A Cutthroat Technical Skills Market
It’s no wonder supply chain leaders are concerned about recruiting and retaining related technical skills. They’re competing not only with other supply chain organizations for that talent, but also with other functions in their own organizations—chiefly IT. “If you look at supply chain and technology, they’re two of the most strained areas of talent in the whole corporate ecosystem,” says Benjamin Dollar, a principal with Deloitte Consulting. “You need to have strong technology skills in supply chain, and CIOs increasingly need to enable sophisticated problem-solving within the supply chain. And neither one can do it with the people they have now.”
Supply chain managers are looking to science, technology, engineering, and math (STEM) graduates to fill new supply chain roles—but it’s a tough sell. “Most supply chain leaders would love to hire engineering grads from top schools, but a job in the supply chain at a manufacturer is pretty low on their list,” Dollar says. “There’s not enough sex appeal.”
Looking for Leaders
While a large majority of survey respondents (73 percent) said it was extremely or very important to hire employees with the required technical competencies in order for their company to meet strategic objectives, even more (79 percent) said leadership and professional competencies (such as problem-solving, change management, and talent development) were extremely or very important. Strategic thinking and problem-solving were deemed most critical in the future with 74 percent of respondents saying it would be rising in importance. But just 43 percent say they are very good to excellent at it today.
That may be an even bigger challenge for supply chain executives than locating technically skilled professionals. “You can at least take a class in analytics,” says Marchese. “Leadership characteristics take more time to develop.”
CIOs and COOs: A Talent-Sharing Opportunity
“A lot of what’s driving the supply chain talent problem is the need to implement new technologies, and that’s an issue for both the COO and the CIO,” says Marchese.
But to be successful in the future, IT and supply chain must be closely aligned. “You have to create an operating model in which the supply chain can make it clear what its requirements are and IT can show the supply chain the art of the possible,” says Dollar. “To do that successfully, you need a mix of strong supply chain talent combined with advanced technical skills.”
Build Internal Skills Augmented by External Expertise
Advanced supply chain management concepts must be matched by advances in talent management capabilities. The survey also found recruiting new talent is seen as a greater challenge than retaining existing talent, especially at higher levels, suggesting that building skills internally is becoming increasingly important.
The largest difference between the expectations of supply chain leaders and followers is something of a concession to reality. Leaders are more likely to believe their supply chain organizations will make increased use of specialized external expertise and staffing over the next five years. Supply chain talent may flourish best when it lives outside the walls of organizations supporting personnel inside companies where supply chain excellence is “the business of the business.”
- Supply Chain Talent of the Future: Results of Deloitte’s 3rd annual Supply Chain Survey. © 2015 Deloitte Development LLC. Member of Deloitte Touche Tohmatsu Limited.
- Supply Chain Crisis Looms WSJ CIO Journal Copyright © 2015 Deloitte Development LLC.