I interviewed Thomas Tanel who discussed Logistics/Supply Chain Talent Challenge : Talent Gap Shortfall and Skill Sets Needed.
Hi I’m Tom Tanel President and CEO of CATTAN Services Group Logistics and Supply Chain Management advisory, counseling, and training firm. Dustin, thanks for having me back to discuss Part II of the Logistics/Supply Chain Talent Challenge. As we discussed, I would like to focus on the talent gap shortfall and skill sets needed.
As an experienced workforce retires, how do we replace this depletion of experienced Baby Boomers?
According to Supply Chain Insights, 60 percent of companies within the supply chain industry have job openings and 51 percent of companies are seeing an increase in the turnover of supply chain leaders. This is now! In the long run, you don’t replace this depletion of experienced Baby Boomers.
Looking ahead, the United States Bureau of Labor and Statistics predicts that the number of logistics jobs are expected to grow by 22 percent by 2022––nearly double the rate of other professions. Therefore, we will be in a catch-up mode for a decade or more.
The whitepaper Are You Prepared for the Supply Chain Talent Crisis by MIT’s Center for Transportation and Logistics (CTL) is in agreement with other recent surveys as it states, “The supply chain faces a severe shortage of talent at a time when the demand on the profession have never been greater.” Further in the report it says, “The net result is a talent tsunami.”
In some instances,the shortage of talent has simply occurred because companies have inadequate human resource management to support the recruitment and retention of talent. And the 2008-2012 recession-related layoffs have greatly undermined industry’s ability to build back the profession's front-line workers and management talent.
The good news is that there is a vast pool of talent out there in the form of the many talented supply chain professionals who chose to leave the profession altogether orof people who for one reason or another have been away from the labor market for a long time. And as I will address in Part III of this series, we can also replenish the logistics and supply chain work force with returning military veterans and separated logistics-oriented veterans who are reentering the workplace.
What key supply chain competencies and/or skill sets are needed to overcome this talent gap shortfall?
As a result, the immediate question is where we find people with both the breadth and depth of supply chain skills for a global operating environment with cost-to-serve tradeoffs that influence optimal supply chain design decisions. That’s a tall order to fill considering the talent gap shortfall.
APQC recently conducted a survey, whose results indicate that there are skills gaps among recent supply chain job candidates. These gaps primarily occur with more strategic skills. As a result, recruiting and retaining supply chain talent is more of a talent shortageproblem for the strategic positions.
Andrea Jung, former Avon CEO, emphatically states, "Talent is the No. 1 priority for a CEO. You think it's about vision and strategy, but you have to get the right people first." That means hiring the right person. One who can do the job but wants the opportunity. How do you do that? By answering the question, do you have the right people with the right skills when and where you need them?
What many executives don’t realize is that supply chain management is an activity that touches so many other parts of a company’s business. For young people—front-line workers and management—it may appear complex and mystifying, but as a profession, we have the important task of explaining to the next generation exactly what is involved. However, setting out what the job entails is difficult for most HR types. For that reason, we need to be clear to these millennials what we are looking for in terms of skills—the ability to: communicate well, solve problems, use IT effectively, demonstrate leadership, show organizational skills, and apply a creative, global mindset.
One of the key supply chain competencies needed to overcome this talent gap shortfall is the capacity to solve supply chain problems that you encounter day-to-day. Namely, critical thinking. This includes a skill set aimed at problem-solving and decision-making. We are talking the innate ability to identify the problem; access and organize relevant information; discern causes and effects; generate options; and choose and implement a workable solution.
As a consequence, the supply chain job is no longer mostly a functional transaction and tactical based one. It is a key strategic role that can influence up 60 to 70 percent of a company’s total costs, all of its inventory, and most aspects of customer service. “In most firms, the supply chain controls most of the inventory; manages 60-70 percent of the cost; helps generate revenue by providing outstanding product availability; and manages many of the firm’s physical assets. The Great Recession of 2008-2010 will increase the focus on a supply chain’s impact on the financial health of the firm.”, states Dr. Dittmann, Executive Director of The Global Supply Chain Institute at the University of Tennessee.
Therefore, the first talent gap shortfall is budgetary cost control. Additionally, supply chain management requires resource allocation to include facilities; material handling, storage and transport equipment; technology enablers and software; and both human and energy resources. So the supply chain job today is no longer a logistics functional one. Instead, it is a key strategic role that can influence 60 to 70 percent of a company’s total budgeted costs, all of its inventory, and most aspects of customer service.
The second biggest talent gap shortfall is in the realm of analytics according to Art van Bodegraven of Discovery Executive Services. He says “those skills are insufficient without context and experience.” Our colleges and universities seem to address the mathematical, statistical and quantitative methods in preparing graduates for supply chain analytics. However, as van Bodegraven articulates with an example, “A mathematical analysis [could] lead us on one direction, but experience will point us in another.”
How do we address that while the number of supply chain university programs is increasing, the scope and depth of curriculum and the number of formally trained or degreed workers is lagging behind current needs?
Interestingly, Career Builder identified Logistician/Supply Chain Manager as a top growth job since it has experienced an 8% job growth since 2010. There is only one active candidate for every five jobs posted.
As colleges and universities introduce undergraduate majors, MBA concentrations, degree programs, the shortage of supply chain talent is generally attributed to a skills gap. The Wall Street Journal recently reported that colleges and universities have recognized this as an opportunity—graduates who receive a degree in supply chain management—the “hot new MBA”.
Specifically, research has shown that graduates with undergraduate and graduate degrees in supply chain management are not adequately prepared for supply chain jobs, and that professionals within the supply chain do not have the skill set necessary to take on management roles. A broad knowledge and skill set across the supply chain is really lacking at universities as noted in MIT’s CTL whitepaper that I cited earlier.
The APQC results indicate that candidates are best prepared for the more basic aspects of the supply chain discipline, such as procurement and inventory management. They also highlight the gap in skills among potential employees, given that candidates are rated most prepared for tactical aspects of the supply chain field. “In today’s complex, far-flung supply chains, most decisions have multiple consequences—many of them intended.” states Dr. Mahmoodi, Director of the Global Supply Chain Management program at Clarkson University.
Meanwhile, as research indicates, organizations are addressing the need to further develop their supply chain hires in a number of ways. Some have adopted training programs to improve the skills of high-potential employees once they have been brought on board. Such programs can include on-the-job training in the organizations’ logistics processes and/or rotation programs that give employees broad experience with different aspects of supply chain.
And corporate universities are already carving out new roles to address the talent shortage. As a training center, the corporate supply chain university’s goal is to achieve logistics operational excellence and drive alignment around key logistics processes and standards.
Lastly, an aging workforce means waves of retirees will soon be leaving across the board. As a result, we risk losing critical “institutional knowledge” if we’re not prepared. The Baby Boomers need to be able to tutor and coach your newly hiredmillennialsthrough a mentoring program. As a Baby Boomer with 40 years of experience, I can personally attest that it is difficult to gain experience without also gaining knowledge.“Knowledge comes by taking things apart: analysis. But wisdom comes by putting things together.” believed John Morrison, former President of Anderson College. And it is this wisdom which Baby Boomers have already accumulated that is really lacking at colleges and universities.
About Thomas Tanel
President and CEO of CATTAN Services Group Logistics