Supply chains aren’t what they used to be. With the explosion of Big Data and globalization, the supply chain industry has become increasingly complex. With so many moving parts in a rapidly evolving environment, it is easy to become overwhelmed at the sheer magnitude of this new landscape.
As with any new ecosystem, there are new rules, methods, and, most importantly, new opportunities for growth. If these parameters can be understood and utilized, that same anxiety can be replaced with effective management and confidence in an entirely new arena.
What follows are some basics to facilitate growth in the ever-changing and exciting world of supply chain management.
Embrace Data and New Technology
The world today is swimming in new information and technological advancement. Data on almost any industry or interest is more available now than at any time in human history. While this can be overwhelming, it should be viewed as an opportunity; Supply chains should be quick to embrace tools that take advantage of this information and put it to use.
Cloud computing and analytics enhance efficiency by fostering communication and coordination, increasing revenue, and reducing cost. For example, enterprise technology tools like warehouse management and enterprise resource planning (ERP) systems allow for quicker processing times and more accessible inventory data. This provides customers with efficient service and the supply chain with less waste and more knowledge about its services.
In the realm of customer activity, up to 74% of orders are still being placed through e-mail. If analytics aren’t in place to study that order data, important information concerning customer activity is missed. Other technological advancements should also be embraced, such as automation, 3D printing, and drones – all emerging technologies that can perform tasks efficiently while collecting data to be studied and learned from.
However, these tools are only as good as the people who wield them. It is important for executives and their employees to be well versed in how to effectively use new technology; This means a renewed vigilance in training programs and an openness to learning that may not have been there before.
It is imperative for supply chain leaders to be dynamic enough to consider a new technology even if their current system is operating successfully with its current toolset. Due to increased competition, that which is working just fine today could be antiquated and costly tomorrow.
The New Workforce
Recently, a University of Maryland/DHL study found that the demand-to-supply ratio of supply chain jobs to qualified individuals is 6 to 1. Demand has rapidly outpaced supply, meaning that the talent pool needed for this new world is severely lacking.
The industry is witnessing rapid retirement from Baby Boomers, with 25-33% of the workforce at or past retirement age. In response, supply chain must make a concerted effort to embrace millennials and foster an environment in which they can thrive professionally
Research and advisory firm Gartner believes this can be achieved through four steps:
- Creating a culture that mentors the millennial workforce
- Developing career development plans
- Giving millennials access to cross-functional programs
- Utilizing internships to attract next-generation talent
Aside from recruiting new talent, supply chains can also benefit from an increased effort to retain the talent they already have. According to Nick Little, the assistant director of Executive Programs at Michigan State University, the supply chain industry is seeing up to one-third of mid-level professionals leave their positions annually.
Time should be invested in these at-risk employees, identifying their strengths and finding possible successors. According to Little, a bonus or increased salary isn’t enough. Instead, time should be spent identifying employee career paths and showing them areas of supply chain and business functions that are outside of their expertise. An investment in education for these individuals is encouraged.
A March 2017 study from Supply Chain Insights identified problem-solving, strong analytical skills, and the ability to see the big picture as top skills required in the industry. With a focused effort to develop these employees, such skills can be amplified. In doing so, a supply chain leader will be able to retain its most valuable employees while also making them more knowledgeable about their business and preparing them to take on higher roles in the future.
The Customer Still Comes First
Because of the information boom, supply chain leaders can often lose sight of the customer in service of data. According to an article by Earl Van As, “a potential downside [of new technology] is the possibility of eroding customer satisfaction because most digitization focuses on improving efficiency but not customer service.”
Currently, 20% of existing customers contribute 80% percent of supply chain business, making those limited relationships increasingly important. As global competition amplifies, the difference between two chains can be tougher to distinguish – a soured relationship can send the customer to a competitor quicker than ever. Therefore, “sales reps must spend more time learning about each customer to engage in targeted and personalized conversations,” Van As explains.
Resources should be invested in technology and automation so that employees can devote more time to managing customers’ accounts. In doing so, a supply chain leader can become more productive while also retaining customer loyalty.
Changing the Chain
With the proliferation of technological advancements and data analytics, the supply chain has been undergoing significant changes. While potentially challenging at the onset, the only answer to such change is to embrace it.
Take advantage of this new playing field by implementing and adapting to new technology and tools. Invest the time and money saved from these technologies in employees and customers, accounting for and supporting all aspects of a business that data cannot. In doing so, supply chains will be able to surf on the wave of change rather than being overtaken by it.
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