subscribe: Posts | Comments | Email

Job Openings and Hiring in the Eurozone and U.S. Mark All-Time Records

0 comments

Earlier in the year, one of our published 2017 Predictions for Industry and Global Supply Chains called for a supply chain talent perfect storm, one that we believed would occupy more of the management attention of supply chain and business leadership. From ongoing data, that prediction seems to be holding true at the mid-year mark.

The U.S. Bureau of Labor Statistics reported this week that the number of job openings approached a record 6.3 million at the end of June. According to Reuters, that number represented the highest reported openings since the Labor Department began tracking this metric 16 years ago.

U.S. Job openings in June increased by 179,000 in the category of professional and business services, an area that is closely aligned with supply chain management needs. Our prediction was predicated on the need for industry supply chain teams to take on a more industry advisory focus in their respective organizations to support simultaneous strategic, tactical, and operational support needs, coupled with augmented technology applications that enhance decision-making.

Likewise, in both May and in June, a combination of improved order inflows and rising order backlogs caused the manufacturing sector spanning the Eurozone countries to add jobs at the fastest pace recorded in the past 20 years.

The perfect storm relates to the prospects of 2017 providing even more overall pressures to reduce supply chain costs while supply chain remains agile to increased external events.

Supply chain leaders are faced with difficult choices regarding the existing workforce. Executives who previously established multi-year plans to broaden skills and talent now face the reality that talent needs are now more immediate as available external labor pools are increasingly diminished by market supply and increased demand forces. The growing gaps in hiring are another signpost that existing workers do not have adequate tools and training opportunities because business or government training investment activities continue to lag.

Those individuals possessing broad supply chain cross-functional process knowledge coupled with technology savviness and the soft skills needed to influence adoption and change to more advanced decision-making concepts will continue to be in very high demand. That will lead to more job-hopping, affecting even those companies that had taken the initiative to train existing employees. Efforts to increase U.S., North America or Eurozone based manufacturing capabilities now face the reality of an increasing lack of available skilled manufacturing and supply chain related talent.

We again urge our readers through their existing organizations to share what talent recruiting, management and retention programs have garnered positive contributions for their businesses and supply chain organizational needs, along with efforts that incent skilled employees to stay-on.

The talent perfect storm is obviously deepening and proactive cross-business initiatives as well as knowledge sharing is rather critical at this point.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Blog On Summer Pause

0 comments

This posting is to alert readers that the Supply Chain Matters team will be taking a summer vacation pause to partake of some needed rest and rejuvenation.Supply Chain Matters Blog 350 100 J Supply Chain Matters Blog On Summer Pause

While we may post an occasional important or critical update, our normal cadence of blog posting activity will resume the week of 23 July.

During this pause, readers are welcomed to explore our vast amount of content related to multi-industry supply chain management business processes, information technology and other related topics. We know there is significant content because we recently had to add additional data storage to the blog.

To assist readers, below is a select listing of some of our most-read blogs so-far this year, as-well as in 2016. Perhaps these can be part of your summer reading.

 

What are Specific Skill Needs and Gaps in Supply Chain Management? (February 26, 2016)

Supply Chain Matters highlights results and an infographic from a supply chain skills survey conducted by Canadian based Argentus Supply Chain Recruiting outlining what specific hard and soft skills are organizations looking for in their hiring and recruiting efforts. Supply chain skills and talent development content has consistently drawn reader interest.

 

The Future of Supply Chain Planning (May 2, 2017)

The first in a market education series that explores changing needs in supply chain planning, what is termed concurrent supply chain planning, and why it is becoming a more important capability to support today’s multi-industry supply chain business environments.

 

A Path Towards Internet of Things Enabled Service Management- Service Parts Planning Realities (June 13, 2017)

A content education series on building the foundations for robust, more efficient, less costly service and aftermarket parts planning capability while building the foundation for IoT enabled service management business models.

 

Articulating Supply Chain Needs in the Language of the C-Suite (May 11, 2017)

The latest economic and business data reinforces that supply chain leaders must more than ever, be able to translate investment needs in the language of the C-suite and in the notions of delivering desired business outcomes.

 

Airbus and Boeing Continue to Experience Supply Chain Scale-Up Challenges (May 2, 2016)

After announcing Q1 financial and operational performance results, both Airbus and Boeing addressed ongoing challenges related to their supply chains and expected performance for 2016 total aircraft delivery commitments. We shared candid comments from Airbus’s CEO as to the global producer’s most critical new product introductions and clear signs of concerns related to various supply chain challenges.

 

The Value Proposition for Cloud Computing is Broader in Scope and in Business Implications (January 22, 2016)

Our commentary explored the implications of a full Cloud-based technology suite in supporting broad supply chain business process needs after industry analyst Bob Ferrari completed nearly two days of briefings and conference presentations related to Oracle’s Cloud based technology offerings. One takeaway provided was to view Cloud from the perspective of a broader focus on an engineered suite of pre-integrated software applications that are continually updated to reflect changing business needs.

 

Technology Addressing the Convergence of Internet of Things and Smart Manufacturing Deployments (March 23, 2017)

As a follow-up to Supply Chain Matters attendance and coverage of Oracle’s Modern Supply Chain Experience Conference, we highlighted some sessions that addressed Internet of Things (IoT) enablement of future smart manufacturing, supply chain and service management business processes.

 

Sports Authority- A Disturbing Twist to Consignment Inventory Management Practices (March 17, 2016)

Characterized as one of the largest sporting-goods retailers, Sports Authority was weighted down with debt from a prior leveraged buyout a decade ago. We called attention to a disturbing development in the ongoing bankruptcy process, as the retail chain filed lawsuits with more than 160 suppliers challenging supplier claims to consigned inventories. We opined that this development had significant ramifications for supplier collaboration practices within retail as well as other consumer goods focused supply chains.

 

Chipotle’s Consumer Trust Crisis Enters a New Critical Phase (February 9, 2016)

One of our early blogs in a series of ongoing commentaries we outlined from a supply chain lens regarding the business, brand and supply chain crisis that impacted Chipotle Mexican Grill after hundreds of consumers were sickened by a series of varying incidents ranging from E-coli outbreaks to norovirus that date back to the summer of 2015. We opined that too much attention was being applied to corporate marketing vs. supply chain and restaurant risk mitigation efforts.

 

Look to the Cloud to Support the Modern B2B Network (September 1, 2016)

This blog commentary addressed an organization’s journey toward mature B2B information integration and how this is made possible by today’s advanced cloud-based platforms, applications and infrastructure. We opined that there is no question that analytics and broader, more predictive business insight capabilities are opportunities to transform B2B business and supply chain business networks. The opportunity — and indeed the necessity — is to leverage an end-to-end business network to synchronize planning, execution, customer fulfillment and more predictive decision-making needs.

 

Thanks again to all our globally located Supply Chain Matters readers for their continued readership and frequent visits. Thanks as well to our sponsors, clients, and network contacts for their continued support.

Bob Ferrari, Founder, and Executive Editor

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Wal-Mart Conducts an Optimistic Annual Meeting but Industry Realities Remain

Comments Off on Wal-Mart Conducts an Optimistic Annual Meeting but Industry Realities Remain

Global retailer Wal-Mart held its annual meeting of stockholders last week and declared that the world’s largest retailer has  “started to invent the future of shopping again.” CEO Doug McMillon declared: “we are going to make shopping with us faster, easier and more enjoyable.”  Wal Mart 300x199 Wal Mart Conducts an Optimistic Annual Meeting but Industry Realities Remain

We would quickly add that this is a tall and expensive order in today’s turbulent retail industry environment.

In prior commentaries, Supply Chain Matters has praised Wal-Mart’s emphasis on leveraging the retailer’s vast brick and mortar presence as a more effective extension of an overall omni—channel business strategy. What seems clear from the strategy that continues to unfold is that Wal-Mart will indeed leverage its significant physical presence as an extension of an online shopping experience. In that vein, the retailer is currently testing the deployment of automated online order pickup stations in stores, actual pick-up stations in select store parking lots, and what the retailer’s terms as “Jet Fresh” delivery, which provides deliveries of household groceries one 1-2 days. Regarding the latter, company management indicated that the service is currently available to about half of U.S. households.

Stockholders were updated on the retailer’s continued commitment to source $250 billion in products within the United States along with meeting a goal to source $20 billion of products from women-owned businesses. Further mentioned were initiatives to source more local and sustainable products and to reduce greenhouse gas emissions across the supply chain by 1 giga ton by 2030.

CEO McMillon boldly declared: “We will compete with technology, but win with people”, adding that workers should not fear increasing automation that will change the work involved in retail.  He added: “We will be people-led and tech-empowered” indicating: “I don’t think we should be afraid of changes.  Instead, I think we should recognize that we’ll be able to learn, grow and change together.”  He went on to state that associates need to be lifelong learners and: “The secret of our success will always be our people.”

Uplifting and motivating statements indeed, but from our Supply Chain Matters lens, there are still brute realities to the current Wal-Mart strategies.

The first and obvious was a realization that prior attempts to build a competitive online presence met with very mixed results. That ultimately led to the bombshell acquisition of Jet.com for a sum of over $3 billion. Since that time, Jet.com founder Marc Lore has been given total license to revamp and improve the retailer’s online presence and associated capabilities. That includes more widespread utilization of Jet.com’s price optimization algorithms, as well as lower prices for merchandise that is ordered online and picked-up at a local Wal-mart store.

As many retailers are now fully aware, investing in online fulfillment capabilities is not a cheap proposition, and many of the touted online initiatives already deployed and talked about are examples of these efforts.

And then there are realities of a changed, people and technology-driven business model that CEO McMillon touched upon. He acknowledged the needs to create new jobs in data science, machine-learning, systems engineering and mobile app development. At the store Associates level, being tech-driven brings new realities as well in terms of added training and personal skills development to be able to be an extension of an extensive omni-channel customer fulfillment environment.

Other open questions come to mind.

The first is a building compensation gap from top to bottom. Business media has disclosed that online czar Marc Lore was compensated in $237 million last year, nearly ten times more than CEO McMillon’s $22 million in compensation. Thus the compensation gap from CEO to store associate grows significantly wider and profound.

It remains widely believed that Wal-Mart has staffed its retail stores with a predominance of part-time vs. full-time staffing.  While starting salaries were recently boosted to a minimum of $10 per hour for retail associates, that level does not provide the financial means to invest in more individual technical skills.  Those possessing such skills will likely be able to find jobs that provide far higher compensation levels. Part-timers need to find other jobs to financially make ends meet, again leaving little time for personal skills development.

Another reality is that the online world remains highly competitive, especially when it comes to Amazon. We have previously highlighted that Amazon and Wal-Mart have been in head-to-head negotiations with major suppliers for lowest priced supply of inventory.

On the very week of Wal-Mart Annual Meeting, Amazon announced a lower Prime membership fee for low-income shoppers which are Wal-Mart core customer group. Lowest income shoppers, those currently obtaining government assistance will likely be eligible for $5.99 monthly Prime membership that includes free shipping. Likewise, Amazon announced an Amazon Cash program earlier this year that allows customers to add cash to their account balances at more than 10,000 locations across the U.S. The online giant continues to step-up its merchandise offerings in lower-cost apparel and in a wider variety of household groceries and local food and grocery outlets.

 

The good news is that at least one large retailer, Wal-Mart, can portray an optimistic strategy of future omni-channel capabilities. On the other hand, there remains an ongoing learning that former methods, practices, and corporate culture are all subject to change in the new world of retail and in retail supply chains.

 

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Articulating Supply Chain Needs in the Language of the C-Suite

Comments Off on Articulating Supply Chain Needs in the Language of the C-Suite

Q1 economic data provides some important signposts for industry supply chain teams, especially in their increasing needs to boost agility and responsiveness to overall supply chain capabilities. By our lens, the data reflects that supply chain leaders must more than ever, be able to translate needs and requirements in the language of the C-suite and in the notions of desired business outcomes.  Boardroom 300x200 Articulating Supply Chain Needs in the Language of the C Suite

We have often admired Oracle CEO Mark Hurd’s ability to demonstrate how to effectively communicate in the language of the C-Suite. That includes his observations that in a global economic environment where economies grow 2-3 percent on average, and where investors expect or demand far higher returns, something must give. He describes CEO priorities as concurrently managing for growth as well as cost savings.  Companies must take market-share from competitors or out-innovate the competition in products, added services or business capabilities, or risk the peril of being out-innovated by an industry disruptor. Hurd then provides meaningful evidence of how Cloud-based technology and applications can address the needs of top-line growth with lower overall costs.

Latest Data

Last week, The Wall Street Journal reported (Paid subscription required) that in the first quarter of 2017, the largest U.S. companies have been booking their strongest quarterly profits in five years, mostly from keeping a lid on spending for new projects, plants, and headcount. According to the WSJ, data on capital expenditures suggest that companies remain somewhat cautious on large expenditures. The report observes: “Profits at S&P 500 companies jumped an estimated 13.9 percent in the first quarter, growing nearly twice as fast as revenue.” While there is some notable industry exception such as declining growth and profitability for food and consumer staples providers, business leaders have been generally pleasing investors with attractive returns while being rather stingy on investments other than stock buybacks and added dividends.
As noted in a prior blog commentary, data related to U.S. GDP growth in and PMI activity in the first quarter adds some uncertainties for businesses. The report indicates that some businesses have reluctantly increased select hiring because of overt needs to increase overall productivity as top line revenues grow in environments that are generally lean in their ability to support added business needs.

Turning to hiring, the Labor Department reported that the unemployment rate in the United States dropped to a ten-year low of 4.4 percent while hourly earnings are up a mere 2.5 percent, on average, from a year earlier. Likewise, our view of various global PMI indices among key global regions such as the Eurozone and Asia indicate that manufacturing and supply chain employment is on the rise, albeit a gradual rise.

Thus, the job market is tightening, particularly for skills that are in high demand such as automated manufacturing and analytics based supply-chain decision-making. Supply chain leaders are fully aware of existing cross-functional talent need shortfalls and that challenge is likely to increase in the coming months.

Our sense is that the U.S. economy, and perhaps certain Eurozone economies are once again reaching a tight job market where in-demand people skills will be even more difficult to acquire without boosting compensation and benefits. Skilled employees will quickly understand their added worth in a tightened labor market. For emerging and mid-market manufacturers and services providers who must always operate on lean budgets, the people impacts will be more magnified.

 

Existing Realities

Industry supply chains are literally caught in the middle of these forces.

Pressures to meet the needs of digital process transformation and the online Omni-channel environment remain unabated. The quest for added supply chain cost savings continues across many industry sectors. Those pressures are passed along to suppliers and services providers across multiple tiers of the supply chain with the result that agility or responsiveness to new business opportunities or for product and process innovation are hampered across the product value chain.

In many cases, legacy processes and backbone systems have not changed since the era of client-server computing and point-to-point integration of transactions and data. The result has been more augmented processes and added spreadsheets to support needs for quicker decision-making demanded by the business. IT is now under enormous pressure to reduce infrastructure and data integration costs, because of these same business forces. Supply chain teams are likewise losing resources that were supporting the various patchwork processes.

Something must give and we believe many supply chain leaders know it.

 

Communicating the Language of C-Suite

Communicating in the language of the C-Suite implies advocating plans for the supply chain to support business priorities and desired outcomes, including supporting top-line revenue growth while continuing to reduce costs and improve productivity and timely decision-making.

The forces of digital transformation are twofold. First, transformation leads to meeting changing customer needs and expectations as well as added areas to support top-line revenue growth. Second, digital transformation provides supply chains the ability to leverage advanced Cloud-based computing and technologies that avoid needs for major legacy system upgrades that risk major business disruption. Cloud adoption places the burden of any added or changed IT infrastructure, data security and systems growth needs on the Cloud services provider.  The result can be a more predictable recurring operational cost line on the budget with the ability to leverage needs for digital transformation along with needs to support required people productivity needs.

The IMF recently increased its forecast of global growth to 3.5 percent citing building momentum for the Eurozone, China, and the United States. If that occurs, businesses will be under the gun to again boost shareholder returns, take maximum advantage of added growth opportunities while continuing to boost productivity and cost savings.

Now is the time to advocate supply chain process, technology and people needs in the vernacular of the C-Suite. It requires a twofold agenda for helping the business to increase revenue and customer growth while better controlling costs and worker productivity. It is also about enabling smarter, more informed, and timely decision-making prediacted on anticipating market and customer needs.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


Supply Chain Matters Shares Our Top Ten Blog Postings in 2016

Comments Off on Supply Chain Matters Shares Our Top Ten Blog Postings in 2016

An annual tradition for the Supply Chain Matters blog has been to look back to the prior year’s readership uptake and share with our readers the top ten blog postings of the prior year.

Admittedly, we are a bit late in compilating all of our 2016 readership data but we did want to publish this for readers, clients and sponsors.

The list provides a sense of what particular topics were of the most interest in our over 300 blog postings published in 2016.  SCM 250 76 Supply Chain Matters Shares Our Top Ten Blog Postings in 2016

In the Dave Letterman style, we start with number ten and work our way down to the number one topic of readership uptake.

Number 10:

Observations on the Rankings for Supply Chain Planning Technology (February 5, 2016)

After industry analyst firm Gartner published its Magic Quadrant Rankings for Supply Chain Planning System of Record applications in mid-January, this commentary shared observations regarding the rankings of vendors. Our takeaway was that the current landscape of supply chain planning, sales and operations planning (SO&P) and B2B supply chain network planning technology was far more influenced by line-of-business and supply chain leadership input needs and requirements. Hence many other sources of information support the buying decision beyond industry analyst rankings.

Number 9:

The Value Proposition for Cloud Computing is Broader in Scope and in Business Implications (January 22, 2016)

This Supply Chain Matters commentary explored the implications of a full Cloud-based technology suite in supporting broad supply chain business process needs after industry analyst Bob Ferrari completed nearly two days of briefings and conference presentations related to Oracle’s Cloud based technology offerings. One takeaway provided was to view Cloud from the perspective of a broader focus on an engineered suite of pre-integrated software applications that are continually updated to reflect changing business needs. Why settle for business application innovation every 1-2 years when every 6 months is an option, and with lower capital and overhead costs.

Number 8:

Sports Authority- A Disturbing Twist to Consignment Inventory Management Practices (March 17, 2016)

Characterized as one of the largest sporting-goods retailers, Sports Authority was weighted down with debt from a prior leveraged buyout a decade ago. We called attention to a disturbing development in the ongoing bankruptcy process, as the retail chain filed lawsuits with more than 160 suppliers challenging supplier claims to consigned inventories. We opined that this development had significant ramifications for supplier collaboration practices within retail as well as other consumer goods focused supply chains.

Number 7:

A Disruptor is About to Enter the Heavy Truck Equipment Market (June 20, 2016)

Supply Chain Matters has continuously provided our readers visibility to emerging industry disruptors who are leveraging advanced technology and platforms directed at supply chain related business process and asset needs.  Such visibility included the entry of Uber and Lyft and their potential to move beyond people transportation. In this posting we provided visibility to start-up Nikola Motor Company and its ongoing development of a Class 8, 2000 horsepower electric powered semi-tractor truck that will be named the Nicola One.  The actual unveiling occurred in early December.

Number 6:

Chipotle’s Consumer Trust Crisis Enters a New Critical Phase (February 9, 2016)

One of our early blogs in a series of ongoing commentaries we outlined from a supply chain lens regarding the business, brand and supply chain crisis that impacted Chipotle Mexican Grill after hundreds of consumers were sickened by a series of varying incidents ranging from E-coli outbreaks to norovirus that date back to the summer of 2015. We opined that too much attention was being applied to corporate marketing vs. supply chain and restaurant risk mitigation efforts. It is now April 2017 and the challenges to restore brand trust remain.

Number 5:

Look to the Cloud to Support the Modern B2B Network (September 1, 2016)

This blog commentary addressed an organization’s journey toward mature B2B information integration and how this is made possible by today’s advanced cloud-based platforms, applications and infrastructure. We opined that there is no question that analytics and broader, more predictive business insight capabilities are opportunities to transform B2B business and supply chain business networks. The opportunity — and indeed the necessity — is to leverage an end-to-end business network to synchronize planning, execution, customer fulfillment and more predictive decision-making needs.

Number 4:

Gartner 2016 Top 25 Supply Chain Rankings- Supply Chain Matters Initial Impressions (May 19, 2016)

Our annual commentary related to analyst firm Gartner’s Top 25 Supply Chain Rankings.  Our annual commentaries reflect our beliefs that ranking criteria can be misconstrued, especially when it tends to favor supply chains that avoid major ownership of assets and inventory, or tend to weight other criteria lower, such as sustainability and social responsibility practices.

Number 3:

A Tour of Healthcare Supply Chain Innovation in Action (February 4, 2016)

Executive Editor Bob Ferrari shared impressions and insights regarding a November 2015 visit to the Cardinal Health Healthcare Supply Chain Innovation Lab located in Concord Massachusetts.  The lab served as a hub to explore innovative technology approaches such as smart sensors and near-field communications (NFC) in addressing healthcare supply chain product demand and supply inefficiencies.

Number 2:

What are Specific Skill Needs and Gaps in Supply Chain Management? (February 26, 2016)

Supply Chain Matters highlights results and an infographic from a supply chain skills survey conducted by Canadian based Argentus Supply Chain Recruiting outlining what specific hard and soft skills are organizations looking for in their hiring and recruiting efforts. Supply chain skills and talent development content has consistently drawn reader interest.

 

And now, a drum-roll for our most read 2016 blog:

 

Airbus and Boeing Continue to Experience Supply Chain Scale-Up Challenges (May 2, 2016)

After announcing Q1 financial and operational performance results, both Airbus and Boeing addressed ongoing challenges related to their supply chains and expected performance for 2016 total aircraft delivery commitments. We shared candid comments from Airbus’s CEO as to the global producer’s most critical new product introductions and clear signs of concerns related to various supply chain challenges. We also called attention to comments from United Technologies regarding the new Pratt and Whitney geared turbofan engine, which turned out to be the weakest link in the Airbus supply chain. Finally we concluded that for the two dominant manufacturers of commercial aircraft, supply chain challenges have once again come back as concerns amid an environment of robust order backlogs. Each has different manifestations and supplier challenges, and each reflects on internal operational scale-up as well. We opined our belief that challenging product design among the most critical supply components, including aircraft engines would continue to be the linchpin towards achieving required production scale-up milestones.

 

Thanks again to all globally located Supply Chain Matters readers for your continued readership and frequent visits.

Thanks as well to our sponsors, clients, and network contacts for their continued support. We will no doubt, have yet another set of different topics of reader interest throughout 2017.

A final thought, why not consider having your company’s brand appearing as a designated sponsor or advertiser on this blog. Send us an email at info <at> supply-chain-matters <dot> com and we will respond with all of the information.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


« Previous Entries