Monthly Archives: September 2012

To Solve the Talent Crisis, Think Different!

We have a talent crisis across the board in Supply Management and Supply Chain. We shouldn’t have a talent crisis, but because of continual short-sightedness in industry and government, we do.

And at this point I should probably end the post because by now the average person who stumbles upon this post is probably screaming that it’s not our fault, because we value talent, we have great education systems, and we’re trying hard to fix it, etc. etc., but it is our fault. Why?

Every year we rank talent in the top 3 issues. And every year, as our hopes and dreams that strong growth and stability will return get slashed by reality, the first thing we do is cut the training budget. And then, when we realize that there’s too much to do with too little people, we cut professional development time and ask people to work overtime on tactical tasks that add nothing to their skill set. And the cycle continues. So, in the corporate world, we cause our own chaos.

And then, when we have millions of people out of work, with thousands willing to retrain for better jobs, we limit unemployment benefits and make it almost impossible to get money for professional and degree programs. And I’m not just talking scholarships or sponsored training, I’m talking loans that many of these people would be willing to take, and carry for years, just for the opportunity to acquire a skill set that will see them working again. So the government is doing nothing to actually fix the situation. Governments have to guarantee loans for education and they have to subsidize living costs for workers who need retraining if their future earning benefits will limit the ability to repay very high loans. But that’s another issue for another post.

The point that needs to be harped on is that, as an industry, we’ve created our own mess, and we perpetuate it every day. As the job of Supply Manager gets more and more demanding, the response I’m seeing is “We need a talented, educated, skilled individual with a Masters Degree in Supply Management, who speaks three languages, has experience with MRP, ERP, and best-of-breed technologies, has sourcing expertise in three categories across five verticals, has managed 100 Million dollar projects, is trained in negotiation, etc. etc. etc.”. And, in the end, we have a set of requirements that maybe 6 people in the world can fill because ( a) it’s way too much for one person and ( b) the company has never bothered to train anyone internally with even half the skills it wants.

If a company instead took care to appropriately define a set of reasonable job descriptions that would cover all the necessary skills, and then identified internal candidates and trained them for those positions, they would have half the battle solved. Then, if instead of looking for someone for the role who had all of the skills, looked for someone who has the education and experience to quickly learn all of the skills with the mentorship of the people trained internally and a few focussed professional development courses, I’m convinced half of our talent crunch issues would magically disappear over night. (The logistics half would still be an issue because we have the image problem associated with warehouse and trucking jobs in this economy. Because we don’t view those jobs as highly important and an honour to hold, as the Mexicans do [which is why I’m okay with giving them our trucking jobs], convincing people to even consider those jobs will continue to be difficult.)

And then, as this recent article over on the HBR network on how workers with disabilities solved Gitanjali Gems’ talent problem, we never take the time to realize that someone else’s island of misfit toys might actually be filled with the resources we need to do the job. Now, I agree with Charles’ that Supply Management has traditionally been the island of misfit toys in an organization, and that is a big problem, but the reality is that if someone is skilled in X when organization Z needs Y, that person will be a misfit toy in organization Z. The best candidates for a Supply Management job are often people in engineering, high tech, medicine, (bio) chemistry, etc. who know the details of the category that need to be sourced, and the challenges that are involved, but who are not necessarily the best people to be building the projects or doing research. Just like some of the best sales and marketing people in high tech are people with CS degrees who learned to code, figured out that they weren’t very good at it and/or didn’t like it very much, but that they understand inherently what could and could not be done and the relative amounts of effort different commitments to a customer would carry. In IT, many R&D misfits became marketing marvels.

In the case of Gitanjali Gems’, they needed cutters. This is a skill that takes training and time to acquire, and a big money commitment from an employer. So they need to find people with interest, aptitude, and loyalty, as they’d lose big financially if they lost people to the competition as soon as they reached their productive potential. So they looked to people with real disabilities, and found that the attrition rate was 10 times lower, the productivity was 30% higher, and the overall working atmosphere became one where people “felt good” when they went to work, making them want to work even more. In my book, this far outshadows the additional benefits they received from the government (which ends up paying about 15% of the salaries), and the good press they get for the initiative. Because the company found people who wanted to work, and gave those people the training and tools they needed to be successful, the people enjoyed working for the company, worked 30% more productively, and stayed around a lot longer. Which shows that the talent crunch is solvable, if you just get up and actually do something about it.

Do You Know What’s At Risk? Resilinc Does!

Resilinc, a new player in Supply Management, has a unique approach to identifying and evaluating risk in your supply chain. Eschewing the transaction-and-finance focussed approach of other players in the risk management space, and building on the lessons learned from SIM (Supplier Information Management) vendors, Resilinc has built a unique approach to identifying and quantifying the relative risks in your supply chain.

Started by a Risk Management practitioner in the high-tech and electronics supply chain, who has a Masters in Engineering in Logistics (from the Massachusetts Institute of Technology), Resilinc not only builds on the lessons learned from SIM, but on the lessons learned from real risk management practitioners and specifically focusses on the electronics and high-tech, medical device, and automotive supply chain – realizing that, when it comes to risk, not all supply chains are created equal.

So what is Resilinc? It’s an affordable DSS (Decision Support System) for larger mid-size and large multi-nationals that need to

  1. identify the most significant risks in their supply chain,
  2. keep tabs on what facilities may be impacted by a significant external event, and
  3. be immediately informed when an event could cause a disruption that requires immediate action.

The solution, delivered using the SaaS (Software-as-a-Service) model, does this by tracking all of the relevant information on each supplier and facility in your organization’s multi-tier supply chain. Whereas a typical SIM solution (that powers a typical financial risk analysis product) will track each supplier, their official information, their insurance certifications, their corporate addresses, etc., Resilinc’s solution tracks each individual manufacturing facility, the products produced at those facilities, the inputs required, the lead times required, and the time taken to get the plant up and running again as a result of a serious disruption (such as a natural disaster, border blockade, strike, etc.). Based on this information, integrated financial and location risk metrics imported from other systems (for which you have a license for), and the relative revenue impact of each product on your total organization revenue, Resilinc is then able to

  1. provide an overall risk score, delivered in terms of the revenue impact of a disruption, for each location and product,
  2. give you the ability to determine the impact of an external event in a given location with respect to supplier locations and sourced products, and
  3. determine which locations and products are likely to be impacted by a significant event anywhere in the world, as soon as it happens (and e-mail you a notice that the event — which may be an earthquake, war, or labour strike — is potentially impacting one or more locations in your supply chain).

Risk Managers can use this to determine which locations and products have the biggest risks, which facilities will be impacted the most as a result of a supply disruption in an area, and which product (line)s are at risk as the result of an event that just happened. And then they can take action.

Resilinc is a powerful tool for the high-tech, medical device, and automotive supply chain, which, until now, were probably too reliant on financial metrics, which are not the only risks one needs to be concerned about in a multi-tier supply chain.

While We’re All Remembering September 11

Let’s not forget September 16. While the scope of the tragedy was much less severe, the Wall Street Bombing of 1920, which took place 82 years ago today, is an indication of what can happen at home if social unrest gets too high. It was the deadliest act of terrorism on U.S. soil up until the day it occurred.

Given the anti Wall-Street resentment, the state of unemployment, and the dire straits America could find itself in if the Federal Reserve does not keep it on track, this, unfortunately, is an event that could conceivably reoccur. In our haste to not forget, let us not forget.

Wait!

That’s right, don’t make that big decision today, Wait and use the art and science of delay to your advantage.

With summer came heat and a new book by Frank Partnoy, Professor of Law and Finance at the University of San Diego and the Co-Director of the Center for Corporate and Securities Law. In Wait, Frank proposes a contrarian perspective on decision making that suggests that slowing down your response time can yield better results as per a recent review over on S+B.

According to Frank, decisions of all kinds, whether “snap” or long-term strategic, benefit from being made at the last possible moment. The art of knowing how long you can afford to delay before committing is at the heart of many a great decision. This is a great maxim for Supply Managers to live by. There’s a reason that sales people often want you to “act now” and have you “take advantage of this deal before it’s too late” is they know that if you don’t act now, and do your homework, you’ll probably figure out the merchandise is over-priced, over-represented, or not quite what you’re looking for and that you can get the same deal, with a bit of patience and negotiating, from a hungrier supplier down the street.

And this goes double for software sales. If the sales-person is paid a variable commission based on total sales for the quarter, or year (which is a stupid way to implement an incentive model, by the way*), at certain times of the year he’s going to be very pressured to just make a sale, any sale, and all too eager to over-promise what he knows the IT department will likely under-deliver on.

This maxim should also be applied in the selection of new logistics providers, supply chain designs, and operating procedure changes. While it is imperative that your supply chain be as lean and mean as possible, it often happens that rushing to meet the goal only results in a whole lot of running as rushed implementations often end up with holes that require a whole lot of rushing to fill. And while it’s likely that you are losing money every day you don’t implement that new supply chain design that is expected to save you millions, if you don’t take the time to do a proper risk assessment, you could lose your savings five times over when a new tariff scheme gets approved in six months (that everyone who did their research saw coming) or a trade agreement expires.

So while you should be exploring new technologies, processes, and innovations that could enhance your Supply Management organization as soon as you discover them, you shouldn’t rush a final decision until you’ve given yourself some time to re-examine all the findings. (But then, once you’re sure, jump in with both feet. If you hold back, in Supply Management, even the best laid plans will fail.)


* While a software company should incentivize it’s sales team to sell more, it should not do so at the cost of customer success. There are better ways to implement an incentive model which will allow both goals to be achieved.