Category Archives: Talent

Three Keys To Success in Today’s Competitive Supply Chain Landscape

The other keynote at this fall’s NPX was by Don Wirth, VP Global Operations Supply Chain and Excellence of DuPont who did a presentation on DuPont’s Journey to Supply Chain Excellence. Dupont, which expects to save almost 3.7 Billion dollars at the culmination of their journey through improved plant operations, supply chain network design, and supply chain optimization, will slash its overall supply chain costs across the board by about 10%. (And its efforts are making an impact. It just delivered strong EPS growth on 32% higher sales for third quarter 2011.)

How is it going to do it? Innovation, differentiation, productivity, and talent are key success requirements. In particular, it plans to align the following strategic themes:

  • Innovation & Customer Focus,
  • Differential Business Management, and
  • Productivity & Continuous Improvement

with the following growth trends (and the importance of trends was discussed in SI’s posts on minitrends and megatrends):

  • increased need for food production,
  • decreased dependence on fossil fuels,
  • environmental protection, and
  • emerging markets.

This is great strategy for any supply management organization. Align with forthcoming needs and be better prepared for the market shifts that tend to come faster than expected. So how does it plan to align?
By beginning with management practices. Metrics and incentives are revised to be consistent and aligned with goals. Risk management is organization wide. Governance and structure supports center of excellence operations. Then it leverages scale and skill. It starts with standardization and simplification. It puts experts in charge of the supply chain. Best Practices are institutionalized. Finally, it builds culture and capabilities by treating talent as an enterprise asset.

Dupont engages its workforce in its entirety. The collective power is in the group and the team, and getting the most we can out of
our operations. These words are straight from the mouth of the CEO, who puts the company’s focus where her mouth is. How? That’s the subject of tomorrow’s post.

Winning the Talent War – Start With A Resource Strategy

In yesterday’s post, that mentioned that the talent war has just begun, we discussed Don Klock’s keynote at last week’s NPX workshop, put on by the The Mpower Group. In his keynote, Don, a Senior Global Procurement / Supply Chain Executive with over 30 years of experience with multiple major multinationals who is now with the Rutgers Business School, Don noted that, as a result of the severe skilled talent shortage,

if you don’t have a Resource Strategy to build your talent
pool, you better develop one.

Why? Because, to put it in the colourful euphemism us North Americans understand so well, you’ll be up sh*t creek without a paddle otherwise. And while Seth Green, Matthew Lillard, and Dax Shepard might have parlayed their situation into a 69 Million gross for Paramount, you won’t be so lucky.

Fortunately, a resource strategy isn’t that hard. A simple one consists of:

  • an internal skills assessment
    to define your skills (& talent) gap
  • a training and development program
    to take the both the resources you have, and the resources you bring in, to the next level
  • a recruiting plan
    to get that talent

Or course, the recruiting plan can be quit an exercise. After all, where do you look? Internally? Externally? Do you use a recruiting firm? Do you use a temporary staffing agency to keep the canoe afloat in the interim? Do you rotate your top performers through temporary assignments to make sure all critical functions, and tasks, get addressed? Do you just outsource? And if you look external, where? Universities? Industry Associations? Job Boards? Your competitors? The answer is typically — as Don notes — all of the above. You need talent, and you need to get it wherever its, whenever you can, through any means necessary.

This will obviously take some work.

  1. First, you will have to identify how you will relate to your job pool.
    These days, talent wants challenging work, good benefits, life/work balance, advancement opportunities, the right culture, and the right management in addition to a good salary. And, in fact, chances are culture, life/work balance, and organizational mission are more important to them. For the Millennials, a lack of focus on environmental stewardship is unthinkable and a kiss-of-death to your organizational future.
  2. Then you have to get that message out there.
    You’ll need a great job description, a great corporate message, and a great communicator leading the charge. And this person will have to connect to your talent wherever they are — job fairs, industry events, and on-line social networks like LinkedIn.
  3. Finally, you have to rope them in during the interview process.
    An interview is a two-way street now. They are interviewing you as critically as you are interviewing them, if not more so. Not only is their unemployment rate as skilled, college-educated talent, approaching an all-time low, but they know that, in many industries, there are not enough people to meet the demand and that they have the power. You will need to address all of their concerns, and (honestly) demonstrate that your organization is not only paying better but also providing a better work/life balance while providing challenging work and advancement opportunities, and that they will shape the path of the organization going forward. (Of course, if all this isn’t true, then your organization has a big problem as it’s not going to attract much talent until it is.)

Of course, if your organization does all this right it will be one of the few in a position to find, attract, and retain talented resources, which will soon be the supply chain’s number one talent. Almost 25% of the North American workforce is now eligible for (early) retirement. The only reason they are hanging on is the down economy. When it bounces back, they’re gone, and you’re down another 25% (or more) if you’re not ready. So get ready.

The Talent War Has Just Begun!

This was a central theme of the NPX keynote by Don Klock, Clinical Associate Professor of Supply Chain Management & Marketing Science at Rutgers Business School, a Senior Global Procurement / Supply Chain Executive with over 30 years of experience with multiple major multinationals, including Colgate Palmolive.

Even though unemployment is still near a fifty-five (55) year plus all time high, which was around 10.5% back in the early 80s, it’s becoming harder and harder to fill vacant positions due to the shift in the North American economy which resulted in most Blue Collar jobs being outsourced and the need for more highly skilled white collar workers than the North American economy has traditionally produced. Couple this with declining birth rates in the developed and developing world (even though the global population just hit 7 Billion) and a relatively constant number of University graduates over the last 5 years in North America (approximately 3 Million a year in the US, which is less than 1% of the US population attaining a University degree each year), and the problem starts to take shape. There’s not enough blue collar jobs for those without college degrees, and more jobs that require college degrees and experience than there are college graduates to fill them. When you break down the unemployment rate, as this article in MarketWatch on the “white-collar recession, blue-collar depression” did last year, when the official overall U.S. unemployment rate was 9.6%, and the “underemployment” rate topped 17%, you find that unemployment is less than 4.5% among college graduates vs about 10.8% for those with a high-school diploma and 14.3% for those without one.

This is largely due to the loss of U.S. manufacturing jobs, which have decreased 40% over the last 20 years. The jobs that remain are outsourcing and supply chain management, which involve a lot of skill, experience, and education — which a large percentage of the U.S. population does not have. That’s why we have large multinationals with 500 jobs and no one to fill them!

That’s why, as Don says, the demand for suitably qualified procurement professionals is on the rise and the job of retention and recruiting talent is much more difficult than it has been historically. And that’s why, if your organization is to survive the supply chain talent war, it needs a supply chain resource strategy. Without one, your organization will be left in the dust as your competitors acquire the limited supply of talent that is currently available.

So what should you do? We’ll discuss Don’s suggestion in our next post on the talent gap.

SIRI: Not Just for Radio Anymore

Over on the Purchasing Certification Blog, Charles’ just penned a great post on why “your procurement resume needs to have more of these four words”: Saved, Increased, Reduced, and Improved.

Charles’ is right when he notes that these are the result-oriented words that hiring managers and CPOs want to see, read, and hear. CPOs don’t want to hear what they already know you did. Every Procurement Pro manages, negotiates, analyzes, and contracts. They want to hear that when you managed, you improved efficiency. That when you negotiated, you saved big money. That when you analyzed, you reduced demand for indirect goods and services. And that when you contracted, you actually improved supplier relations.

If you’re looking for more tips on what you should be saving, increasing, reducing, and improving, check out this post from 2009 on how to get noticed and keep your sourcing or procurement job.

Stop Hoarding and Invest In Your Supply Chain

By now you might think SI is a broken record, since this is the third day in a row it has complained about the fact that the “Global 2000” are hoarding cash like it’s never to be seen again, but when even Forbes.com decides companies are hoarding too much cash, as per its recent article on how cash isn’t king, this should drive the point home.

And the situation is even worse than Financial Director and Hackett reported. According to a recent Forbes article, the Federal Reserve reported in June that U.S. businesses were saving cash at unprecedented levels, with balances climbing to 1.9 Trillion! That’s 2.23 times the cash reserves of the top 1000. If the situation is the same in Europe, cash reserves must be topping 1.6 Trillion Euros (or 2.16 Trillion US). That’s an estimated 4 Trillion in cash reserves! To put this in perspective, this is 100 Million jobs for one year at the average US salary, and unemployment is roughly 74.7 Million across the US and the EU. Get the picture?

Now, saving for a rainy day sometimes makes sense, but when you start saving to the point where even your investors are concerned that cash is not being put to work earning a reasonable return, not only are you helping to tank the economy, but you are biting the hand that feeds. And given that, due to the lack of innovation and planning, which is largely due to the lack of manpower to do innovation and planning, your transportation costs are about to soar, your commodity costs are rising across the board, and your current talent pool is overworked, unhappy, and ready to change jobs as soon as the next better offer comes along (with job satisfaction at an all time low), how much longer can you really afford not to invest in new talent and new technology to help them innovate your way to a better future?

Then, as the Forbes article points out, as the ever increasing gap between high-quality borrowers (you) and low quality borrowers (your cash-poor suppliers) widens, more and more of your suppliers will experience cash flow issues (as you are not only hoarding all your cash, but borrowing from limited funding reserves to do so). This will lead some into bankruptcy and failure, which will create disruptions in the supply chain that will disrupt your operations and cost you sales and brand equity and, in the end, time and resources to regain your customers’ trust. But all of this can be prevented by investing into your supply chain up front. It’s your choice. Spend and profit. Or hoard and lose.