Pearson on Excellence: Supply chain mastery requires talent

Companies responded to the economic downturn in diverse ways. Many streamlined operations and became more efficient. Some invested in new technology, capital, and infrastructure. But not too many focused on acquiring exceptional people or luring talent from less fortunate companies.

However, the latter move—enhancing skill sets—could end up paying the biggest dividends, particularly as cost cutting reaches its natural limits and technology assets are deployed more or less equally across competitors.

Leveraging talent is far more complex than just acquiring the right bodies. In supply chain management companies need “human capital strategies” that maximize their people potential by integrating operational performance objectives with the organization’s big-picture goals. But how do you create a human capital advantage? Following are three cornerstones.

1. Remove complexity. Minimizing supply chain complexity is one of the best ways to create more efficient, more agile organizations that can respond rapidly to existing and emerging consumer demands. From a human resources perspective, less complex supply chain processes and structures allow companies to leverage talent more effectively. Plus, an agile organization is a strong drawing card for attracting and retaining the best people.

A natural starting point for reducing complexity is to identify the operational and organizational improvements most likely to affect business results. An example might be a retailer that focuses on improving fulfillment without raising inventory costs. To do this, Lean Six Sigma and advanced analytics could be leveraged to more effectively link process improvements, business performance, and organizational priorities.

When it comes to complexity reduction, companies focus too often on obvious pain points (reducing budget overruns, eliminating transport delays, reducing employee turnover) rather than on the root causes of complexity. More often than not, the right complexity-reduction rationale is increased agility. Supply chains that attack and remove process and organization complexities are “suddenly” able to respond more quickly to shifting markets, changing customer demands, and new value paradigms.

2. Create environments for supply chain talent to succeed. Several characteristics are often present in companies where supply chain talent flourishes. Among the most important is role clarity, which in turn drives predictability and accountability in the execution of supply chain processes. When an organization rigorously follows competency standards, people at all levels of the organization know what they must do to execute their jobs well.

With clearer supply chain roles, skills-management leaders may be able to hone their talent strategies by:

• Segmenting the workforce (e.g., based on learning styles, values, personality, wellness profiles, mobility).

• Offering modular choices from a list of defined and sanctioned alternatives (e.g., international job rotation opportunities).

• Putting more emphasis on innovation (like Google’s insistence that engineers spend 20 percent of their time on projects that create value for the organization).

Flexible learning and training systems also help to create a talent-optimized workforce. Ideally, this involves structured learning combined with deployment of multiple information sources such as social media. Insights from conference calls, presentations, and third-party vendors can be turned into short podcasts that are rapidly and easily accessible to workers. Cross-training through job rotations or collaborations is another, important part of the learning/training mix.

3. Align talent and supply chain analytics. In addition to using descriptive analytics to determine what happened and why it happened, companies can now leverage predictive analytics that use sophisticated statistical modeling, forecasting, and optimization to help forecast business outcomes and determine how supply chain activities relate to those predictions. Organizations seeking to leverage their skills base can use analytics in much the same way to predict the talent needed to optimally staff their organizations and deliver on consumer expectations.

Though unemployment is high, there is a shortage of ultra-skilled talent—people who can help companies move ahead in ways that are economical, sustainable, and difficult for competitors to replicate. That is why the three approaches discussed above, pursued as a single, integrated initiative, are so important.