JULY 2015

DEVELOPING SUPPLY CHAIN CAPABILITYFINDINGS OF THE TALENT SURVEY 2015

Front cover photo courtesy of Sebastian Marabello.

This document is the result of primary research performed by SCM World. SCM World’s methodologies provide for

objective, fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted,

the entire contents of this publication are copyrighted by SCM World and may not be reproduced, distributed, archived or

transmitted in any form or by any means without prior written consent by SCM World.

© 2015 SCM World. All rights reserved.

Geraint leads the sourcing, supplier management and supply chain risk management research and content streams at SCM World. He provides insights, learning & development and advisory support to leading global companies and manages a team producing a steady flow of practitioner-led webinars, best-practice insights, data snapshots and live events. He is based in London.

AcknowledgementsThanks to the following for their assistance in designing the survey on which this report is based:

Barry Blake, Vice President, Research, SCM WorldSharon Rice, Vice President, Strategy, APICS Jonathan Thatcher, Director of Research, APICS

In association with

AuthorGeraint JohnSenior Vice President, Research, SCM World

CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION

ADVANCED SKILLS & CAPABILITIES FOR SUPPLY CHAIN

SUPPLY CHAIN’S RELATIONSHIP WITH HR

THE DIFFERENCE THAT DEDICATED HR MAKES

TALENT ISSUES ACROSS THE GENERATIONS

SUPPLY CHAIN AS A CAREER OPTION

CONCLUSIONS & RECOMMENDATIONS

ABOUT THE RESEARCH

REFERENCES

4

5

6

10

12

14

17

19

20

22

4 Developing Supply Chain Capability Findings of the Talent Survey 2015

EXECUTIVE SUMMARY

As supply chain becomes a more integrated and strategic contributor to business success, so the range of skills and capabilities needed by people working in the function increases. A new study by SCM World and APICS among almost 600 supply chain professionals shows that cross-functional collaboration, trust-building and collaboration with key customers/suppliers, data-driven decision making, communication and influencing skills, and the ability to manage organisational change are considered to be the most important.

Today, however, there is a gulf between this perception of importance and the reality in many companies. On cross-functional collaboration, for example, 54% of participants believe their supply chain organisations are well equipped, compared with 95% who say this is important. Similar gaps exist across the other skills and capabilities included in the survey. Talent shortfalls are most acute in the United States, according to practitioners, with China also a cause for concern.

Supply chain’s relationship with human resources (HR) ought to be a source of strength in plugging these gaps. But the study found that only:

• 29% of supply chain organisations have access to dedicated HR resources;

• 17% believe that HR fully understands their strategic priorities and talent requirements;

• 25% rate HR’s support as good or excellent, compared with 35% who say it is poor or very poor.

Analysis of the data reveals that supply chain organisations with dedicated HR support (typically those in larger firms) are better served – and more

satisfied. Five times as many have a strategic relationship with HR, capability gaps are smaller (albeit still significant) and the quality of training and other services provided is better. The lesson is that investing in supply-chain-specific talent management pays off and that a closer partnership between supply chain and HR is vital.

This is particularly important in recruiting and retaining the younger generation of “millennial” employees who will be the supply chain leaders of the future. The survey indicates high levels of concern both about transferring knowledge from staff close to retirement and managing younger workers successfully. Millennials are perceived as underestimating the value of experience and having unrealistic expectations about the speed and frequency of promotion opportunities. But they also have a number of desirable qualities – not least, the ability to use technology and data analytics to achieve fast, effective results.

Making supply chain an attractive career option for the next generation is essential. The good news here is that 80% of survey respondents say they find the job personally fulfilling, three-quarters believe supply chain can help to solve world problems like hunger and healthcare, and two-thirds think future opportunities outweigh the risks of obsolescence.

At the same time, relatively few see supply chain as a magnet for talent in their organisations today or believe that it offers fast-track promotion opportunities or a route to the C-suite. So there is plenty of work to do, both internally and externally, to educate colleagues and promote the value of strategic supply chain management to a wider audience.

July 2015 5

INTRODUCTION

Supply chain management today demands not only technical skill, but also business acumen, a strategic mind and leadership qualities. For many supply chain organisations, finding and developing sufficient numbers of talented employees is a huge challenge – and is set to become more of a problem in the near future as many older, experienced managers approach retirement age.

Active talent management and development is therefore at the top of many senior supply chain executives’ agendas. But what are the most critical skill sets for their people and the functions they lead? Where are the biggest gaps in current capabilities? To what extent does supply chain partner with colleagues in human resources (HR) to address the talent question and how well does this relationship work?

How effectively is the pipeline of younger talent – the “millennials” of Generation Y – being filled?

To get insights on these and other issues, SCM World collaborated with APICS, the leading professional association for supply chain and operations practitioners, on a field study among their respective communities. Almost 600 supply chain and other professionals completed a 17-question survey in the space of a couple of weeks, with more than 100 of them typing additional comments into a free-text box at the end.

This report outlines the key findings of this research and features a selection of practitioner opinions about current talent challenges and future needs.

6 Developing Supply Chain Capability Findings of the Talent Survey 2015

ADVANCED SKILLS AND CAPABILITIES FOR SUPPLY CHAIN

To be successful in today’s fast-paced, ever more competitive business world, supply chain professionals and the organisations they work for need a broader set of skills and capabilities than in the past. The core supply chain disciplines of planning, sourcing, manufacturing and logistics – and the “technical” skills applicable to each – continue to be essential foundations. But operating effectively end to end, rather than simply pursuing excellence in individual silos, requires a layer of leadership, interpersonal and analytical competencies on top. To understand how supply chain leaders and their teams perceive these “advanced” skills and capabilities, we asked our survey respondents to rate their relative importance.

As Figure 1 shows, cross-functional collaboration – the ability to work in lock-step with colleagues across the business, and in functions like engineering, product development/R&D and sales & marketing – is seen as the most critical capability. Almost all supply chain professionals believe this is important, with six out of 10 rating it “very important”.

Complementing this more joined-up approach internally, collaboration and trust-building with customers and suppliers comes a close second. Whether it’s working with retail and manufacturing partners to understand demand signals and optimise product flows, or being the first to benefit from supplier innovations, the ability to forge deep external relationships is now a vital source of competitive advantage for many companies. And supply chain has a central role to play here – as the presentations from leaders at SCM World’s Live events in Miami earlier this year and in Barcelona1 this coming October around the theme “Collaborate to win” amply illustrate.

“There is not enough emphasis placed upon customer service throughout the supply chain,” argues the inventory co-ordinator at a large US logistics firm who took part in our survey. “Customer service must be a prime initiative. Therefore, a

collaborative approach to both the external and internal customer is of the utmost importance.”

DATA EXPLOSION

The same proportion of survey participants – 94% – see data-driven decision making as an important asset for supply chain organisations today. The buzz around things like big data analytics and the explosion in demand for (and salaries of) data scientists points to the growing importance of insights and intelligence drawn both from cold, hard facts and the vast quantities of “unstructured” data being created

Importance of skills and capabilities for supply chain1 |

% of respondentsn=559

Cross-functional collaboration 60 35

Trust-building and collaboration with key customers/suppliers 57 37

Data-driven decision making 55 39

Communication and influencing skills 51 42

Managing organisational change 48 44

Actively enabling market growth opportunities 41 44

Balancing global strategy/standards and local flexibility 40 46

Cross-cultural leadership 40 40

Proactive risk management 39 49

Financial knowledge/acumen 28 52

Complex programme/project management 25 52

Very important Important

July 2015 7

every day on social media platforms and across the internet more generally.

Intuition and gut feel will continue to shape business strategy, as it always has, but the quest for competitive edge and optimisation means that companies increasingly need more objective analysis on which to base decisions. In the future, some of this analysis – and perhaps some decisions too – will be computer generated, thanks to advances in machine learning and artificial intelligence.

As a discipline that deals with huge amounts of data every day, supply chain should be at the forefront of this digital revolution, whether it is producing more accurate forecasts via S&OP or getting earlier warnings about potential disruptions across the value chain (88% of respondents see proactive risk management as an important supply chain capability).

“Ongoing improvement pressure asks for supply chain managers with the skills to use more complex tools (advanced analytics) and the ability for interpretation of complex conclusions,” confirms the general manager of a big global steel producer. “I believe that the talent demand will increase, be located near product origin, and require higher levels of analytical skills in every supply chain function,” adds the chief operating officer of a US footwear manufacturer.

Communication and influencing skills, and managing organisational change make up the top five list. More than 90% of supply chain professionals see these as important, with around half saying very important. And the more senior you go in the supply chain organisation, the more important these capabilities are regarded. This makes sense given the strategic remit and greater managerial accountability of those at director level and above. But being able to communicate with and influence colleagues cross-functionally and outside the company are vital skills for all levels of supply chain professional – a fact that is strongly reflected in our survey findings.

MIND THE GAPS

Seeing capabilities such as these as important and actually having them in place within the supply chain organisation are two different things, of course. When we ask our survey participants to assess the latter, we find a big gulf between desired state and current reality. The gap between those rating cross-functional collaboration, external collaboration, data-driven decision making, communication and influencing skills, and change management as important/very important and those believing that their supply chain organisation is well or very well equipped with these capabilities is between 37 and 50 percentage points, as Figure 2 shows.

The capability gap 2 |

% of respondentsn=559

Top 5 skills & capabilities for supply chain

Very important/important Very well/well equipped

Cross-functional collaboration9554

Trust-building and collaboration with key customers/suppliers

9457

Data-driven decision making9355

Communication and influencing skills

9344

Managing organisational change9141

8 Developing Supply Chain Capability Findings of the Talent Survey 2015

When asked where these talent shortages are most acute, the United States heads the ranking by a large margin (Figure 3). Of the 482 practitioners who answered this question, 142 (30%) placed the US first. As the chief supply chain officer of a US-based consumer packaged goods company explains: “Supply chain is a vital function to the delivery of business value. However, the quantity of talent to manage into the future is inadequate in the United States given the hangover from outsourcing in the past 25 years.”

This is certainly one explanation, as is the fact that the need for advanced skills and capabilities is likely to be greater in more mature supply chain organisations.

Talent shortages by country3 |

Weighted score (3 points for #1 rank, 2 for #2, 1 for #3)n=482

Top 10 countries ranked by respondents

United States

China Mexico Brazil India United Kingdom

Russia Vietnam Germany Indonesia

593 401 228 196 177 164 133 100 92 81

However, our data is also skewed somewhat by the fact that a majority (59%) of our survey sample is based in the Americas – 109 of the 142 who ranked the US number one also happen to be located there. For respondents in Europe and Asia/Australasia, China is regarded as having a more serious shortage of talent.

In terms of action to close this capability gap, the most popular choice is to develop existing talent. More than half of our sample says this happens always or often. Hiring talent from outside runs a close second, while only a fifth routinely bring people into the supply chain organisation from other functions like engineering, compared with 43% who say this rarely or never happens (Figure 4).

Closing the gap4 |Action to fill vacancies for roles requiring advanced skills & capabilities

% of respondentsn=555

Develop and promote talent internally

Hire talent from outside the company

Rotate individuals into supply chain from adjacent functions like engineering, sales &

marketing, finance and R&D

468

4

2

45

18

34

42

37

11

8

33 10

1

1

Always Often Sometimes Rarely Never

July 2015 9

The percentages are almost identical when we ask about movement in the other direction – namely, rotating talented supply chain people into other functions as a development opportunity (Figure 5). While this may not help directly in terms of nurturing skills like data analytics or supplier collaboration, it ought to make a difference to cross-functional relationships and communications, especially if the individuals concerned then move back into supply chain at a later date. Our findings therefore highlight an opportunity to strengthen interaction and understanding by increasing the movement of talent in and out of the supply chain function. On paper, this ought to be an area where companies’ human resources (HR) specialists could help supply chain to extend its capabilities for the future.

Keeping it in the family5 |How common is it to rotate high-potential supply chain talent into other functions as a development opportunity?

% of respondentsn=554

Very common

Common

Neither common nor uncommon

Uncommon

Not at all common

418

3333

12

10 Developing Supply Chain Capability Findings of the Talent Survey 2015

SUPPLY CHAIN’S RELATIONSHIP WITH HR

A growing number of companies – among them SCM World community members like Colgate-Palmolive2, General Mills3, Schneider Electric4, Mattel and Unilever5 – have dedicated HR individuals or teams within the supply chain organisation to support recruitment, training and development, succession planning and other personnel-related activities. But, as our survey data shows, these firms are still very much in a minority. Less than three in 10 supply chain organisations have dedicated HR resources today, compared with more than half (58%) that call on the services of a central, regional or business unit HR function (Figure 6).

Not surprisingly, size is a major factor here. Supply chain organisations in larger companies are far more likely to have dedicated HR support than smaller ones: 44% of those with annual sales of more than $10 billion have it, compared with 38% of firms in the $5-10 billion range and 20% of those below $5 billion. (Among companies with revenues of less than $500 million, the figure falls to just 10%.)

In terms of the role played by HR, 17% of respondents say that it “fully understands our strategic priorities and talent requirements, and systematically works to help us fulfil these”. An additional 38% say that HR understands what supply chain needs but can only offer limited support because of its commitments to other functions. Meanwhile, a significant minority (45%) say that HR either doesn’t understand their talent

Type of support for supply chain from HR6 |

% of respondentsn=555

Dedicated HR resources within supply chain

No HR support

Access to HR resources from a central/regional/business unit function

Other

29

58

11

2

requirements or that it plays a largely administrative role, rather than a truly strategic one (Figure 7).

“Supply chain talent is not well understood within the organisation,” suggests a regional procurement manager at an oil & gas major. “It is perceived simply as negotiation, contracting and purchasing but [there is] no awareness of the importance of supply chain knowledge and skills in order to deliver impactful results.”

Digging further into specific activities that HR supports (or doesn’t), we find that two at opposite ends of the seniority scale – namely, executive leadership development and entry-level onboarding – get the highest ratings from supply chain professionals. Slightly over four in 10 in each case say that HR’s input is effective or very effective.

Conversely, just 17% say the same about HR’s contribution to technical skills training (data analytics, network modelling, risk mapping, IT/software expertise, and so on), compared with 42% who believe it is ineffective. Cross-functional skills development scores little better, with more practitioners rating HR’s support as ineffective than effective (Figure 8). This is concerning, given the degree of importance attached to cross-functional collaboration.

HR support varies widely7 |Which of these statements best describes the relationship between HR and supply chain in your company?

% of respondentsn=553

HR fully understands our strategic priorities and talent requirements, and systematically works to help us fulfil these

HR understands our talent requirements but is constrained in the support it can provide because of competing priorities across the company

HR doesn’t really understand our talent requirements

HR primarily supports the transactional/administrative aspects of talent acquisition, management and development

17

3821

24

July 2015 11

The HR director at a leading pharmaceutical company in Europe admits: “I feel a tension between technical skills on the one hand that are extremely important and then the need for more social competencies in the matrix environment.”

Overall, supply chain’s verdict on HR seems to be lukewarm. A quarter believes the support they get is “excellent” or “good” (with just 3% opting for the former), while 35% say it is “poor” or “very poor”. The balance of 40% award HR only “average” marks (Figure 9). “Supply chain talent management is not well recognised by HR,” concludes a respondent from the hi-tech sector in Asia.

Effectiveness of support provided by HR8 |

% of respondentsn=557

Very effective Effective Neither effective nor ineffective

Ineffective Not at all effective

Executive leadership development 7 34 32 17 10

Entry-level on-boarding and training 7 34 36 14 9

Compensation management 6 36 34 17 7

Employee motivation and engagement

5 33 33 20 9

Routine functional training 3 26 39 20 12

Cross-functional skills development 2 21 41 23 13

Technical skills training 1 16 41 26 16

Verdict on HR: ‘could do better’9 |Effectiveness of HR support to supply chain in finding, managing and developing people

% of respondentsn=552

Excellent

Good

Average

Poor

Very poor

22

40

27

8 3

12 Developing Supply Chain Capability Findings of the Talent Survey 2015

THE DIFFERENCE THAT DEDICATED HR MAKES

A key takeaway from our survey, which brightens this picture somewhat, is that supply chain organisations with dedicated HR support are better served – and more content as a result. Most significantly, the gaps in current skill and capability levels are perceived to be smaller than for those who rely on general HR resources. This is particularly true in the case of cross-functional collaboration and cross-cultural leadership (building, motivating and managing culturally and gender diverse global teams), where the difference is at least 10 percentage points (Figure 10).

Supply chain functions with dedicated HR professionals also – and not surprisingly – have a closer working relationship. Five times as many (41% to 8%) say that HR fully supports their strategic priorities and talent requirements as do those that use general HR services (Figure 11). And the gap between the two groups on the effectiveness of those services ranges from 10-19 points (Figure 12).

Superior capabilities10 |% of respondents saying they are very well/well equipped

Cross-f

uncti

onal

collab

oratio

n

62 52

Finan

cial kn

owled

ge/acu

men

44 35

Cross-c

ultura

l lead

ership

58 46

Complex

program

me/

projec

t man

agem

ent

40 35

Data-driv

en dec

ision m

aking

60 54

Balanc

ing glob

al str

ategy/

stand

ards a

nd lo

cal fle

xibility

44 39

Commun

icatio

n and

influe

ncing

skills

50 43

Active

ly ena

bling m

arket

growth

opport

unitie

s

37 33

Trust-

building

and co

llabora

tion

with ke

y cus

tomers

/supplier

s

59 57

Proacti

ve ris

k man

agem

ent

40 35

Manag

ing or

ganisa

tiona

l cha

nge

45 40

Dedicated HR General HR n=482

The net result is that dedicated HR functions get a higher satisfaction rating from their supply chain colleagues. Twice the number with these resources says HR support is good or excellent (41% to 21%), while only half as many score it poor or very poor (17% to 35%). The lesson here is that investing in supply-chain-specific talent management pays off and that a closer partnership with HR is essential if supply chain is to extend both its capabilities and its business value contribution in the coming years. It was for exactly these reasons that SCM World hosted its inaugural Fast-Forward Supply Chain Capability event in Chicago earlier this month6.

Another strategic reason to partner is that many supply chain organisations face the prospect of a worsening talent shortage in the next five years or so. “A large group of technical talent (baby boomers) will be retiring, which will create a void that will be hard to fill,” warns the CSCO of a mid-sized CPG manufacturer.

July 2015 13

Strategic advantage11 |Which of these statements best describes the relationship between HR and supply chain in your company?

Dedicated HR General HR

HR fully understands our strategic priorities and talent

requirements, and systematically works to help us fulfil these

418

HR primarily supports the transactional/administrative

aspects of talent acquisition, management and development

1924

HR understands our talent requirements but is constrained

in the support it can provide because of competing priorities

across the company

3248

HR doesn’t really understand our talent requirements

820

% of respondentsn=479

Better service across the board12 |% of respondents saying support is very effective/effective

Dedicated HR General HR

n=482

Compensation management5940

Technical skills training2815

Employee motivation and engagement

5537

Executive leadership development5640

Routine functional training4328

Entry-level on-boarding and training

5641

Cross-functional skills development

3222

Closer ties, higher scores13 |Effectiveness of HR support to supply chain in finding, managing and developing people

Dedicated HR

General HR

% of respondentsn=478

Excellent Good Average Poor Very poor

8 33

20

42

44

13

30

4

51

14 Developing Supply Chain Capability Findings of the Talent Survey 2015

underestimate its importance (Figure 15). While millennials themselves don’t share this perspective to the same extent, a large minority (44%) nevertheless agree that this statement is true (Figure 16).

A related challenge – and the most significant, according to our data – is the notion that millennials have unrealistic expectations about the speed and frequency of promotion. Three-quarters of respondents overall (and 65% of millennials) agree. A 30-year-old graduate site manager at a logistics provider in South Africa says this issue – along with laziness (a problem for a third of our respondents) – was a key reason why his company failed to hire a single candidate from the country’s universities during a recent search for young talent.

Millennials – negative traits15 |

% of respondentsn=543

Strongly agree Agree Neutral Disagree Strongly disagree

Unrealistic expectations about speed/frequency of promotion

Underestimate the value of experience

Lack loyalty and long-term commitment

Easily bored/distracted

Questionable work ethic/ prone to laziness

124 51 19 5

216 48 22 12

316 38 31 12

210 44 25 19

5 27 34 29 5

Ensuring the transfer of knowledge from experienced managers who are close to retirement to younger professionals is an essential task for supply chain leaders. And yet it is a problem for most, according to our survey data. Almost three-quarters of respondents say cross-generational knowledge transfer is challenging, with a quarter describing it as “extremely challenging” (Figure 14). Those in CPG, food & beverage and logistics & distribution firms are particularly concerned about this issue.

A clear majority (72%) also believe that cross-generational management – managing the diversity of work habits, career expectations, and so on that exist between generations of employees – is difficult. In particular, much has been written lately about the different attitudes to work and learning among Generation Y staff, or “millennials” (those aged between 20 and 34). A programme manager at a global industrial company explains: “My main concern as an elder millennial is to learn as much as I can from those running the show right now. But I’m not sure this happens with younger millennials.”

One explanation is that millennials don’t value experience as much as baby boomers (those aged 55-69) or Generation X employees (those aged 35-54). This is confirmed by our survey results, with almost two-thirds of participants saying that millennials

TALENT ISSUES ACROSS THE GENERATIONS

Age-related challenges14 |Cross-generational knowledge transfer –

transferring knowledge between experienced employees close to retirement and those

earlier in their careers

Cross-generational management – managing the diversity of work habits, career

expectations and views on the purpose/value of work that exist between different

generations of employees

23 50

5814

% of respondentsn=543

Somewhat challengingExtremely challenging

July 2015 15

Generational views – negative traits of millennials16 |% of respondents who strongly agree/agree

n=503

65 76 75 44 66 64

Unrealistic expectations about speed/frequency of promotion

Underestimate the value of experience

Millennials Generation X Baby boomers

FAST, TECH SAVVY AND CHANGE READY

Despite these negatives, millennials also bring a raft of desirable skills and competencies to the supply chain organisations that nurture them. Chief among these is their use of technology and analytics to get effective results – and to do so quickly. More than eight out of 10 of our survey participants agree that this is the case, with a quarter strongly agreeing (Figure 17). “Many of the employees in this age are quick, tech

savvy, and they can pick up tasks and complete them in shorter intervals,” says a Generation X supply chain manager at an American telecoms firm.

A majority of respondents also believe that millennials are good at finding creative and innovative solutions to business issues, that they work effectively in diverse and virtual teams, and that they collaborate well across functional boundaries. However, there are bigger differences of opinion here between the three generations. Only half of baby boomer and Gen X practitioners, for example, agree that millennials are good internal collaborators, compared with 83% of millennials themselves (Figure 18).

As a counterpoint, the Asia-Pacific chief of staff for supply chain operations at a global hi-tech company, based in Hong Kong, says: “A lot of the Gen X and baby boomers in our company’s supply chain are still stuck in very traditional, methodical ways in how they approach problems and drive processes. It’s always difficult to break old habits/behaviour. As a millennial, I feel like I’m running a million miles faster in driving and leading change for the future than my colleagues. It’s a challenge to influence them with the future vision and strategy, and I feel like I’m dragging along very heavy weights to push these colleagues to catch up with the needed fast pace of change.”

Millennials – positive traits17 |

1

1

% of respondentsn=543

Strongly agree Agree Neutral Disagree Strongly disagree

Use technology/data literacy skills to deliver fast, effective results

Find creative/innovative solutions to business problems

Effectively form and operate in diverse/virtual teams

Collaborate well across functional boundaries

Seamlessly balance work and personal life

25

12

9

9

8

58

44

54

47

32

14

34

30

34

40

3

9

7

10

19

16 Developing Supply Chain Capability Findings of the Talent Survey 2015

% of respondents who strongly agree/agree

n=503

Millennials Generation X Baby boomers

Generational views – positive traits of millennials18 |

90 80 70 8382 61 53 5378 55 50 50

Use technology/data literacy skills to deliver fast, effective results

Effectively form and operate in diverse/virtual teams

Find creative/innovative solutions to business problems

Collaborate well across functional boundaries

RETAINING AND RECRUITING TALENT

Finding ways to transfer relevant knowledge and expertise to younger executives and managers, and developing younger millennials in a way that keeps them engaged, are critical issues for the current generation of supply chain leaders. The CSCO quoted above acknowledges that: “Talent models of the past will not support the future given the expectations of talent joining today’s workforce.” Research conducted in recent years suggests that millennials are motivated by things like regular training and development opportunities, flexible working hours and project-based assignments as much as by salary and status7.

In the words of the chief operating officer of a large beverages company in Mexico: “There’s the need to Google(ise) the job atmosphere in supply chain organisations in order to maximise millennial retention.”

More fundamentally, there’s the question of making supply chain an attractive and exciting career option

for talented, ambitious young professionals who might otherwise choose to work in finance or marketing – like, for example, the 20 students recently interviewed by SCM World for a report on top universities for supply chain programmes8.

“Our industry needs to build awareness much earlier,” says the director of strategic initiatives at a US-based food company. “For example, many high schoolers are unaware of supply chain as an option. We need to do a better job of educating this group sooner, so they can make more informed college major decisions. Also, with the changing workforce demographics, expanding our diversity outreach will also be beneficial.”

A supply chain director in hi-tech adds that the profession “needs to be able to apply some marketing spin to sell the vision of what supply chain is and what this looks/feels like as a career”.

July 2015 17

SUPPLY CHAIN AS A CAREER OPTION

Judged by our survey findings, the task of luring sufficient numbers of talented millennials into supply chain is an uphill one. Only a fifth of respondents believe that supply chain offers fast-track promotion opportunities in their companies, compared with 45% who disagree. And just 15% see it as a route to the C-suite, while 60% don’t. Overall, a higher proportion of our sample disagrees that supply chain is “a magnet for talent in my organisation” than agrees (Figure 19). Millennials are slightly more positive on all three counts that their Gen X and baby boomer colleagues. (Indeed, the older practitioners are, the less optimistic their views.) Nevertheless, this is hardly an encouraging picture.

“The next ‘phase’ of supply chain development is to engender the belief that it’s not a destination, but a journey to becoming a great general manager,” says a supply chain VP in the CPG sector. “Supply chain positions touch almost every functional aspect of a business and build leverageable skills. We need to convince both C-suite executives and millennials of this fact.”

Supply chain’s image problem19 |

% of respondentsn=537

Strongly agree Agree Neutral Disagree Strongly disagree

Supply chain is a magnet for talent in my organisation

Supply chain offers fast-track promotion opportunities in

my organisation

Supply chain is a route to the C-suite (CEO, COO, etc)

in my organisation

5 26 33 29 7

2 18 35 34 11

2 13 25 39 21

More positively, 80% agree that “working in supply chain gives me a high level of job satisfaction and personal fulfilment”. And three-quarters believe that supply chain’s ability to make the world a better place by alleviating hunger and improving health and environmental sustainability – a key element of SCM World’s mission – is important to them personally (Figure 20). Among millennials, this figure is several points higher, reflecting the need for a higher purpose in their working lives beyond simply making money and driving better business performance.

More than two-thirds of respondents believe that supply chain is a career choice where “future opportunities for advancement outweigh the risks of obsolescence”. On balance, a majority think that technology developments – robotics and automation, artificial intelligence, the internet of things, and so on – will not diminish the number of supply chain jobs, certainly well-paid ones. Almost six out of 10 expect the number to grow or remain the same, against 32% who anticipate fewer jobs in the future (Figure 21).

18 Developing Supply Chain Capability Findings of the Talent Survey 2015

Supply chain as a rewarding career20 |

% of respondentsn=537

Strongly agree Agree

Working in supply chain gives me a high level of job satisfaction

and personal fulfilment

Supply chain’s ability to make a positive contribution to the wider world

(eg, improving healthcare, alleviating hunger, promoting environmental sustainability) is important to me

24 56

26 50

Supply chain is a career choice where future opportunities for advancement

outweigh the risks of obsolescence18 50

Future impact of robotics & automation, artificial intelligence, etc, on high-paying supply chain jobs

Technology and job prospects21 |

% of respondentsn=553

More jobs will be created than eliminated

More jobs will be eliminated than created

The number of jobs will remain about the same

Don’t know

26

32

33

9

“My compensation package fairly reflects the value I contribute to my organisation”

Mixed sentiments on pay22 |

Strongly agree Agree Neutral

Disagree Strongly disagree

Baby boomers

Generation X

Millennials

9

9

5

53

42

26

19

28

32

15

16

29

4

5

8

% of respondentsn=500

On the subject of pay, our data shows that more millennials are dissatisfied with their level of compensation than satisfied – 38% disagree that it fairly reflects the value they think they contribute to their companies, compared with 31% who are content (Figure 22). “Unfortunately, compensation isn’t enough to attract professionals,” argues a purchasing professional in a US construction services firm, echoing the views of other respondents.

Undoubtedly, some of this negative sentiment reflects the lower salaries and bonuses paid to younger employees: 22% of our sample of 20-34-year-olds earns less than $25,000 a year, while just 7% receives more than $125,000, compared with 48% of baby boomers and Gen Xers. But it also suggests there is a gap between the value millennials believe they contribute and how this is perceived by the supply chain organisations they work for.

July 2015 19

CONCLUSIONS & RECOMMENDATIONS

The findings of our 2015 talent survey reveal a significant gap between the importance that supply chain professionals attach to competencies like internal and external collaboration, trust-building and communication and influencing skills, and the capabilities they believe their supply chain organisations currently possess. Closing these gaps is vital if supply chain is to continue to deliver value at a strategic business level and help companies to compete effectively in the global marketplace.

A strong working partnership between supply chain and human resources is a key enabler in this context, especially when it comes to behavioural and interpersonal skills, rather than those of a technical or functional nature. Analysis of the data shows that supply chain organisations that have their own dedicated HR resources are better equipped and have smaller capability gaps than those without. However, the majority of practitioners we surveyed neither has this nor believes that HR support is particularly effective in helping them to develop tomorrow’s leaders or build a well-stocked pipeline of millennial and younger generation talent.

For these supply chain organisations, there is a need to:

• Educate colleagues in HR and more widely about supply chain talent requirements, the skill and capability gaps that currently exist, and the impact on business performance going forwards.

• Seek to build a stronger relationship with HR, even if company size, culture or other factors rule out supply chain having its own in-function, dedicated HR resources. Competency maps and team/individual development plans are among the areas where HR specialists ought to be able to bring expertise.

• Re-evaluate the use of coaching, mentoring, job rotations and project-based assignments that can help to transfer knowledge from experienced practitioners to younger staff and provide broad-based development opportunities.

• Engage with local colleges and universities to build awareness among students and undergraduates of supply chain as a rewarding career option. And actively share through SCM World, APICS and other external partners case examples that serve to promote the breadth and depth of supply chain’s responsibilities and value contribution – including the “higher purpose” objectives of alleviating hunger, improving healthcare and pursuing environmental sustainability.

20 Developing Supply Chain Capability Findings of the Talent Survey 2015

ABOUT THE RESEARCH

In late May/early June 2015, invitations to complete an online survey were sent to members of both SCM World and APICS, as well as to a wider group of professionals from supply chain and other functions globally. In total, 560 completed responses were received during the survey period.

Industry sector

Hi-tech

Industrial

Healthcare & pharma

CPG

Food & beverage

Logistics & distribution

Chemicals

Professional services

Utilities & energy

Automotive

Retail

Aerospace & defence

Construction & engineering

Medical equipment & devices

Media & telco

Paper & packaging

Other

7

5

3

10

15

7

5

2

8

6

4

2

8

6

4

2

6

Job function

Supply chain

Purchasing/procurement

Logistics/transport & distribution

Operations

IT/IS/technology

General management

Manufacturing/production

Human resources

Finance

Other

43

17

8

7

2

5

5

3

2

8

Job level

SVP/EVP/Board level

VP/Director

Manager/Head

Other

9

24

41

26

Company size

Less than $1bn

$1bn-$5bn

$5bn-$10bn

$10bn-$25bn

$25bn plus

Undisclosed

25

14

1314

19

15

Location

Europe, Middle East & Africa

Asia & Australia

North & South America

Rest of the World

29

1059

2

Key demographics are as follows (all figures represent % of respondents):

July 2015 21

Age

20-34

35-54

55-69

70 or above

1

16

63

20

Gender

Male

Female

71

29

Annual pay

5 24 29 15 12 113

1

<$25k $26-75k $76-125k $126-175k $176-250k $251-500k $500k-1m $1m+

Basic salary + bonus

22 Developing Supply Chain Capability Findings of the Talent Survey 2015

REFERENCES

1 SCM World Live Europe, Barcelona, 11-13 October 2015.

2 SCM World webinar, “Driving business goals through excellence in talent management”, Brent Peterson and Dhiren Doshi, Colgate-Palmolive, 22 April 2015.

3 SCM World webinar, “General Mills’ award-winning strategy for leadership development”, John Church and Kevin Wilde, General Mills, 6 March 2012.

4 SCM World case study, “A transformational approach to talent management in supply chain”, Schneider Electric, 13 March 2015.

5 SCM World webinar, “How HR strategy enables Unilever SC performance”, Nick Dalton and Sandra Kinmont, Unilever, 18 July 2014.

6 Fast-Forward Supply Chain Capability, Chicago, 8-10 July 2015.

7 Kevin O’Marah, “Young talent in supply chain: flexible, not lazy”, SCM World, 27 June 2014.

8 The Top 15 Supply Chain Universities: A Recruiter’s Guide to Future Talent, SCM World, July 2015.

July 2015 23

SCM World is the supply chain talent development partner for the world’s leading companies, empowering professionals with the capability, commitment and confidence to drive greater positive impact on business performance and help solve three of the world’s fundamental challenges: health, hunger and environmental sustainability.

The SCM World community accelerates collective learning and performance by harnessing the knowledge of the most forward-thinking supply chain practitioners, shared through industry-leading research, best-practice exchanges, peer networking and events. Over 150 companies participate in and contribute to the SCM World community, including P&G, Unilever, Nestlé, Samsung, Lenovo, Cisco, Merck, Caterpillar, Nike, Raytheon, Chevron, Shell and BASF.

For more information about our research programme, contact:

Geraint JohnSenior Vice President, Researchgeraint.john@scmworld.com

ABOUT SCM WORLD

2 London Bridge, London SE1 9RA, United Kingdom

51 Melcher Street, Boston, MA 02210, USA

+44 (0) 20 3747 6200

scmworld.com

+1 617 520 4940

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