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Bridging the Talent Gap in Supply-Chain Management

Despite gradual improvement since the summer of 2009 - the official end of the Great Recession - the U.S. unemployment rate remains unacceptably high. But don't tell that to companies in search of supply-chain talent.

Bridging the Talent Gap in Supply-Chain Management

The field of candidates who can tackle the challenges of global supply-chain management today remains alarmingly sparse. "The talent issue has crept up the list of the biggest pain points [of corporate executives] for the third year in a row," according to Jake Barr, chief executive officer of BlueWorld Supply Chain Consulting LLC.

The former Procter & Gamble executive moderated a panel on the supply-chain talent crisis, at the Supply Chain Insights Global Summit in Scottsdale, Ariz. last month. He said that for every university graduate who emerges from a supply-chain management program, there are six spaces to be filled.

And a "crisis" it is. Barr said the roles that require the most brainpower and technical expertise are going begging. At the same time, the rate of turnover is increasing, and positions are remaining open longer.

What's so hard about finding the right people in supply chain these days? It has to do with the growing complexity of the job. Many older specialists came out of the armed forces, where the term "logistics" was coined. Others fell into the job from former positions in marketing or operations.

But modern-day supply chain management is about much more than coordinating the physical movement of goods from one point to another. It encompasses procurement expertise, supplier management, knowledge of international trade trends and regulations, information-technology prowess and customer-relationship management, to name but a few key aspects of the discipline.

Making matters worse is the looming retirement of Baby Boomers and the lack of younger talent to replace them. A majority of organizations lack succession plans for critical roles, said Barr.

"We're in an environment of a giant going-out-of-business sale," he said. "There's an absolute premium on the talent that's available to address these problems."

What to do? Barr urged companies to adopt a five-point plan:

Engage in cross-functional development, both for existing employees and new hires;

 Work on leadership development, by identifying those individuals who have the ability to head up large-scale organizations;

 Speed up the standardization of business processes, to make it easier to train, qualify and move people through the system;

 Launch "retain-and-train" efforts, in the form of educational seminars, simulations and various Web-based techniques, and

 Challenge employees early. Deploy a "risk-and-reward strategy," with an emphasis on rotating people through short-term positions in developing nations.

Job vacancies in supply chain are "costing you money," declared Barr. "It takes the equivalent of 80 percent of fully loaded salary and benefit costs to train individuals coming in the door to do their base work. It takes 200 percent of fully loaded cost to bring someone in to fill after you lose them."

Joe Krkoska, director of global supply chain with Dow AgroSciences LLC, said the talent-gap dilemma is "brewing" at his company, which requires a highly specialized level of knowledge.

A first step, said Krkoska, is convincing imminent retirees to stick around a bit longer, and focus on mentoring incoming talent. He said companies are reaping the consequences of the downsizing that took place during the depth of the recession. As a result, there's a "void in the population. [New hires] are going to have to accelerate like crazy to get to the level you want them to perform at."

Seventy percent of an adult employee's training is acquired by actually doing the job, said Krkoska. Companies need to emphasize real-world experience, by bringing together seasoned managers and new talent to shadow them.

The average company spends only about $650 per person per year on training, said Cindy Urbaytis, vice president and managing director of the Institute for Supply Management. That's despite the dramatic increase in skills and responsibilities that are needed to do the job. She said individuals shouldn't be left alone to develop their abilities. "If there's no support and encouragement, it's just not going to help."

Patrick Curry oversees skills development and university relations for the Integrated Supply Chain organization of IBM. Emerging from a two-year hiring freeze, the company found itself "late to the game" in recruiting, he said.

The schools on which IBM normally relied for graduates were "sold out," said Curry. "They had zero supply-chain talent for us. To meet the hiring target, we had to go to 35 universities."

In the past, much of IBM's talent pool had come from engineering backgrounds. Now the company had to ramp up hires that were skilled in finance and business management. In the process, it began working to shape curriculums, in some instances all the way back to high schools.

At that level, the company found an alarming lack of awareness among counselors and students alike. "No one's talking about supply chain as an option," Curry said.

IBM has launched six talent-development programs, aimed at various levels of management. A "global buddy" initiative matches veterans and newcomers in a mentoring effort, frequently centered outside the U.S. Participants stress the value of having learned about the global aspect of business, Curry said.

From the perspective of universities, the talent gap can be a plus. "Our graduates are over-subscribed," said Nick Little, assistant director of executive development programs at Michigan State University. "They'e able almost to dictate salaries." These days, he said, holders of degrees in supply-chain management can command better starting deals than their counterparts in finance and marketing.

Continuing education for older managers is equally important, Little said, adding that Web-based programs are growing in popularity. "We're helping them to understand the new requirements," he said. "In the future, there's going to be a vast increase in online learnings for people with gaps in knowledge and experience."

What unemployment problem? For those keen on pursuing a career in supply chain, the job market is wide open.

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Keywords: supply chain, supply chain management, supply chain jobs, supply chain careers, supply chain planning

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