4 Ways External Resources Can Boost You Current & Future Supply Chain Talent Capabilities
Prior to the pandemic, supply chain management was significantly less complex than it is today. Historically, supply chain leaders rose through the ranks based on tactical expertise and knowledge of materials and processes. These skills were considered more valuable than strategic or leadership skills simply because materials were readily available, and risk was low.
Lean philosophy suggests that senior leaders should spend 75% of their time on strategic issues, such as sourcing, supplier relations, and network optimization, and 25% of their time on execution. This is not happening within supply chain departments because there was no urgent need until recently and because available bench strength has not allowed it.
COVID, of course, changed everything. Mid-sized manufacturers weren’t ready with the strategic supply chain expertise necessary to manage the new landscape. And it quickly became clear that they could not easily hire it in. Without clear strategy, manufacturers have had no choice but to react as best they can to daily supply chain challenges. With all hands on deck working to navigate through these issues, there are no resources to spare to invest in the network optimization and strategic sourcing work needed to resolve the root causes of these issues.
The longer the underlying strategic problems persist, the harder they become to solve, and the greater the consequences for the organization. Manufacturers facing this conundrum can keep reacting until the crisis has passed (after 24 months, that seems unlikely to be any time soon). They can continue to search for supply chain talent to hire (and if they are lucky enough to find candidates, pay a premium to secure them). Or they can invest in outside resources that can help address both the immediate challenge and the longer-term strategic needs.
Companies that elect to make the short-term investment in outsourcing often find that the immediate results coupled with the longer-term strategic benefits deliver the greatest overall return.
Here are four ways to infuse your business with short term supply chain talent and build the infrastructure to sustain results:
- Embed resources to work on the business.
Strategic embedded resources are an excellent option when you need seasoned professionals who can step and take charge of the business immediately. These vetted leaders can often be on site in a matter of days. They can head up specific efforts, such as sourcing and procurement, planning and scheduling, or logistics and transportation management, and they can take the lead on running the day-to-day aspects of your supply chain operation. In addition to addressing any acute problems, embedded supply chain experts introduce best practices into your existing processes and can facilitate the changes that drive rapid results.
They work alongside your team members to impart knowledge and skills that will improve the overall day-to-day management of the supply chain. In short, they address the immediate needs of the business and ensure the team has the necessary capabilities to sustain the improvements and continually enhance daily supply chain performance over time.
- Leverage consultants to set your longer-term strategic direction.
Because today’s most pressing supply chain challenges often stem from the lack of a longer-term supply chain strategy, it’s important to address your three-to-five-year plan at the same time as your immediate needs. While embedded resources provide the much-needed hands on assistance to course correct in the short-term, the right consultants can help paint the picture of what supply chain talent, processes, and technology should look like several years from now.
Much of this work will center around network optimization, strategic sourcing, and an analytical review of how your supply chain footprint relates to current and future supply and demand and the various dynamics between the two forces. Because network optimization exercises typically only take place every few years, most mid-sized manufacturers lack the up-to-date skills to tackle the job efficiently. Bringing in consultants can help ensure a smoother and more effective processes while creating needed organization-wide alignment around the newly created supply chain vision and strategy.
- Create the human capital roadmap to support your long-term vision.
Recent events have demonstrated the importance of investing in and grooming supply chain senior talent in ways that place greater emphasis on strategic thinking and leadership capabilities. In many cases, this will take a completely revamped supply chain talent management strategy beginning with evaluation, hiring, and promotion practices. Product and material expertise may need to take a back seat to critical thinking and communications skills, especially as product information can be mastered much more quickly than leadership skills. Furthermore, you likely already have resources with significant product knowledge on your team, and that information can be easily passed along to the new supply chain leaders. Next, take a look at training, coaching, mentoring, and ongoing professional development programs for supply chain leaders.
Even when organizations invest in education and seminars for operations leaders, supply chain leaders often don’t get the same level of attention or types of opportunities. Companies that have recently paid the price for this oversight should consider how they can ensure a higher caliber of supply chain leaders going forward. Often, temporary embedded resources can get the ball rolling through knowledge transfer. However, manufacturers may want to consider bringing in consultants to design, execute, and monitor more robust, longer-term training and development programs, especially if they do not have the internal resources or capacity to oversee the programs themselves.
Finally, consider how to develop a pipeline for future high-powered supply chain leaders. Establishing internship programs with colleges and universities that have a strong supply chain focus are an excellent approach. Companies see as much as a 60% increase in tenure when they invest in nurturing and hiring college graduates. Students often bring new energy and ways of thinking to the organization and are up to date on the latest best practices, which can make them invaluable resources to companies both in terms of solving day-to-day challenges and setting longer-term strategic direction.
- Establish a change management plan to guide your transformation.
To be sure, creating a more strategic focus for your supply chain leaders and team is a significant cultural change for your organization. Behaviors and mindsets will need to evolve along with talent management and tactical supply chain processes. As any change is difficult for an established organization, having a plan for managing the road blocks along the way and ensuring the initiative remains a priority and stays on track is the best way to ensure you achieve the results you envision.
Embedded resources and consultants can both play a role in establishing, championing, and executing the change management plan. As seasoned veterans who have been through large scale organizational change many times before, take advantage of their lessons learned to help drive both the short-term and long-term supply chain supply chain team changes your company will make.
Working in and on the business at the same time is the best way to achieve both short- and long-term success.
When your immediate supply change talent challenges can’t wait any longer for resolution, but your longer-term strategic issues need attention, too, Outsourcing can be your best way to address both issues.
We recently worked with a utility structures business where embedded hands-on leaders worked shoulder-to-shoulder with consultants to simultaneously address leadership, process, and technology issues across multiple plants. By implementing lean initiatives to boost supply chain productivity along with leadership coaching, mentoring, and training, the company quickly reduced its lead times and improved on-time delivery from less than 50% to more than 98%. A roadmap for ongoing improvement and leadership development promised $6.8 million in achievable savings, well above the initial $6 million goal for the project.
Clearly, putting resources to work on both your day-to-day and strategic supply chain talent issues can compound the results both now and down the line. Given the current urgency and severity of supply challenges, this is an investment that’s becoming increasingly necessary for the here and now. And it can help establish the supply chain talent capabilities your organization needs to be ready for whatever is coming next.