Will talent be the weak link in the supply chain of the future?

Strengthen the ties between HR and the supply chain organization

Will talent be the weak link in the supply chain of the future?

Posted by Kelly Marchese
and Ben Dollar on June 11, 2015.

For the third year in a row, Deloitte surveyed supply chain leaders (400 executives from global companies) to understand their most important issues and the steps they’re taking to address them. This year’s report of the survey findings, Supply Chain Talent of the Future, highlights the sweeping transformation underway in the supply chain function and the talent challenges emerging as make-or-break factors in achieving transformation goals. As in previous surveys, we see marked differences between supply chain “leaders” and “followers” in how they’re tackling both transformation and talent. This survey also highlights an interesting disparity—and a corresponding opportunity—concerning the relationship between HR and the supply chain organization.

Our research suggests a disconnect between the HR function and its internal customers. Roughly half the survey respondents with HR responsibilities say HR is excellent or very good at working with the supply chain organization to meet its talent needs. Those at the top of the organization, CEO and president-level respondents, share that view. But only about a quarter (27 percent) of the other supply chain leaders responding agree. Clearly a meeting of the minds is in order, particularly because only 38 percent of the respondents say they are extremely or very confident their supply chain organization has the competencies it needs today.

New technologies like additive manufacturing (3D printing) and advanced analytics are driving rapid evolution in the supply chain. This evolution is requiring new operating models, often built around Centers of Excellence, increased outsourcing, and segmentation aligned with products and customers. The roles of supply chain organizations are also changing and requiring an entirely different set of competencies. Supply chain leaders recognize the importance of this shift and consider it extremely or very important to have employees that possess the right technical competencies and leadership and professional competencies. But in most cases, talent management capabilities lag behind.

While supply chain leaders are twice as likely to employ leading talent practices vs. followers—and there is a big difference between leaders and followers in terms of overall SC performance and company financial performance—adoption is very low overall. No leading practices are in extensive use by more than 20 percent of the organizations surveyed. This needs to change. As supply chain leaders face an increasingly acute talent shortage, strong talent management capabilities will differentiate top supply chain organizations.

This is a clear opportunity for HR and the supply chain organization to work together. By becoming more collaborative and coordinated in how they approach supply chain talent acquisition and development, they could elevate both functions’ performance and standing in the organization. The supply chain organization knows the capabilities it needs to be successful and the HR organization should help it develop those capabilities. Critical capabilities for HR include helping the supply chain organization standardize its structures, roles, and competencies, using workforce analytics to forecast talent needs, and enabling access to a talent economy that is more mobile, fluid, and flexible than ever before.

Building these capabilities can enable supply chain organizations to develop their core competencies while relying on partners and outsourcers to support non-core competencies and create more flexible cost structures. Further, it can enable supply chain organizations to focus on retaining and developing the top performers in the most critical roles. In supply chain terms, HR should be responsible for “make/buy” decisions around talent using the same analytical rigor that supply chain organizations use for make/buy decisions every day.

While relatively few supply chain organizations are employing leading practices like these today, roughly half of our survey respondents say they will use them more over the next five years. For this expectation to become reality, supply chain and HR functional leaders will have to acknowledge their shared role in the talent process, understand what each needs from the other to facilitate the adoption of new approaches, and commit to changing how they work starting now.

As the report discusses, the difference between supply chain leaders and followers increasingly comes down to talent. Which does your organization intend to be?

Kelly Marchese is a principal with Deloitte Consulting LLP and leader of its Supply Chain Strategy practice.
Ben Dollar is a principal with Deloitte Consulting LLP’s Human Capital practice.

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