Looking at business-driven HR through the supply chain lens

Looking at business-driven HR through the supply chain lens

Posted by Kelly Marchese and Benjamin Dollar on June 5, 2014

A company’s supply chain can be its greatest competitive asset or its weakest link. Its ability to efficiently and cost-effectively plan, source, make, and deliver goods is critical to meeting customer and market needs. Deloitte’s recent study of cross-industry Supply Chain Leadership explores the differences between Supply Chain (SC) Leaders — the 12% of companies rated by their executives as significantly above average in inventory turnover and percentage of on-time, in-full deliveries — and Supply Chain (SC) Followers — the remaining 88% of participants. In almost every area rated, significant differences emerged between SC Leaders and Followers, except one area: talent. Large majorities of both SC Leaders and SC Followers say they are already following leading talent practices. This surprised us. Can talent really be having little effect on supply chain outcomes? We were inspired to look closer.

SC Leaders in the study did rate talent as a higher concern than SC Followers, perhaps because they recognize that today’s supply chain professionals require a very different set of skills and experience than has been the norm in the past. Organizations looking to make supply chain a competitive advantage are shifting from focusing on agility in meeting demands to anticipating demands, and that requires entirely different skills, leadership, and metrics to be successful. Fast disappearing — if not already gone — are the days when being a hard-nosed negotiator with 20 years in Purchasing was enough to excel in the supply chain world.

As a follow-on to the study, Deloitte surveyed supply chain executives participating in the Argyle Executive Forum’s 2014 Leadership Forum on Supply Chain Integration and Innovation. Tellingly, those leaders cited “managing business complexity,” “understanding big data and analytics,” and “business model design” as the technical skills most important for supply chain talent. In our conversations, supply chain executives spoke about the challenges of operating globally and dealing with considerable ambiguity, and how having breadth of experience in the business, both geographically and in function/role, has become increasingly important. The need for these skills was reflected by the SC Leaders in our broader survey, who are more likely to actively recruit supply chain professionals with analytics expertise (88 percent), cross-functional experience (88 percent), and global experience (83 percent) — as opposed to SC Followers (less than two-thirds in each area).

In fact, some of these executives are considering what they have to do to build tomorrow’s supply chain middle managers and senior leaders. These are the two groups Argyle Forum participants say are in shortest supply now, and will continue to be scarce 10 years from now. So, these executives are looking at the volume of people who will be needed, their desired skill sets, and where they will need to be located.

Supporting and helping to guide this type of thinking around these types of needs is where HR can raise its hand and add value. Competency identification and modeling, recruiting and retention strategies, employee assessment and development, career paths, workforce planning — these are all core HR functions that can be brought to bear to address current and long-term supply chain needs.

Other ways HR can help:

  • Success profiling — Using workforce analytics to identify the factors that differentiate effective supply chain professionals and using those to guide selection and development decisions.
  • Branding — Furthering recruiting efforts by helping to combat the common lack of understanding or misconceptions about the supply chain function and what it involves. (Again, it’s not just about Purchasing.) This “identity crisis” is further complicated in manufacturing-based supply chain roles because manufacturing itself struggles with branding and employer-of-choice issues.
  • Leadership — Supporting supply chain as worthy of a seat at the executive table. At 56 percent of SC Leaders in our study, the supply chain function is headed by an executive vice president or senior vice president. Contrast this with the situation at SC Followers, where only one-third of supply chain functions have such senior leadership.
  • Measuring progress — Part of our discussion with the Argyle Forum participants centered around how to know if efforts to beef up supply chain talent are bearing fruit. This could be an area where HR can assist in developing quantifiable metrics of value added. For example, measuring how much high-performing buyers save when they deal with suppliers vs. their less productive colleagues.

In general, working with internal partners to address supply chain talent needs is an excellent opportunity for HR to demonstrate a more business-driven, less transactional focus. Too often we see operational leaders taking on workforce planning or competency modeling, even to the extent that shadow organizations pop up that are costly and less effective than if HR controlled the effort.

The vast majority (96 percent) of the Argyle Forum poll respondents consider talent to be a top priority in executing their long-term supply chain strategy. With such overwhelming expectations, now is a great time for HR to step up and say, “We can help. Here’s how….”

Kelly Marchese is a principal with Deloitte Consulting LLP and leads the Supply Chain Strategy practice and the Global Supply Chain Risk service offering. She is a Master Black Belt in Lean/Six Sigma and a thought leader in engineering effectiveness through manufacturing operations excellence.
Benjamin Dollar is a principal in Deloitte Consulting LLP’s Human Capital practice. He focuses on organization design, operations excellence, and talent management in large manufacturing companies.

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