This is the third in a series of Supply Chain Matters posts that responds to a challenge among the blogsphere community of supply chain bloggers to offer some thoughts on the seven grand challenges for supply chain management for the next ten to twenty years. The notion of seven challenges was motivated from a recent Gartner research theme that outlines The Seven Great Challenges for IT.

In my part one and part two posts on this topic, I outlined what I believe to be the first five grand challenges, namely:

Ubiquity of Portable Computing Leading to Sensory Networks

-True Supply Chain Business Intelligence and Decision Making Tools

-Managing the Explosion of Data and Information Needs Involved in Global Based Value Chains

– Managing Supply Chain Risk Management on a Global Basis

– Resolving of Who Assumes Ownership for the Extended Supply Chain?

In this post, I will outline my view of the final two challenges that make-up the overall seven grand challenges for supply chain in the next five or so years. You will obviously note that the final two challenges relate to changing skill needs.

 

Challenge Six- Articulating the Value and Consequences of Supply Chain Directly to the C-Suite

Supply chain professionals have been frustrated by the need to better connect the consequences of the tradeoffs in various functional supply chain strategies to the overall value to the business or potential impacts to the balance sheet.  This is similar to the ongoing challenge that the IT community has in relating to the need for identifying the business value and financial consequences of investing in IT.  Challenge six is an individual challenge to all who reside in our community, whether in sourcing, planning, manufacturing and distribution operations, transportation, or any other related function.

In past years, multiple interviews, surveys, and group discussion uncovered a general frustration among SCM participants that senior executives just “don’t get it”.  Supply chain professionals rightfully believe that there are critical tradeoffs among the objectives for driving down overall costs vs. needs to improve service levels to customers, establish relationships with key suppliers, insure security within the supply chain, or improve agility in a rapidly changing business environment.  Benchmarking data of the top leaders in supply chain management note that the organizations can track improvements or potential; strategies directly to financial or service value. But this challenge objectively lacks two missing tenets, a lack of consistent skills, and a lack of well understood communication to the C-Suite.

To be fair, a lot of progress is now being made within various industry settings. Consultants, academia and industry professional organizations such as APICS, CSCMP and SCOR have provided a positive helping hand, and I for one, believe that the community is now on a more positive track. What has also helped is the reality of past decisions.  The effects of global sourcing decisions with limited information related to the effects of these decisions are now an education to senior management on the importance of having a common understanding of the potential implications or tradeoffs of these decisions, as well as having continuous mechanisms for better mitigating potential risks. An increasing trend toward more centralized supply chain structure has also reinforced the need for broader analysis and decision skills.

More and more supply chain professionals are taking the initiative for expanding their individual skills, including broadening their general supply chain business and process awareness skills, and their ability to both speak to and more clearly demonstrate the various tradeoffs and/or implications of decisions.  Clearly, educating management on the benefits of adopting Sales and Operations Planning (S&OP), Strategic Sourcing, Lean and Demand Management methodology has begun to help, but I believe more work remains.  Technology has also helped, and there continues to be better tools available for quantifying risk, simulating various supply chain business scenarios, or providing more-timely sensing of an exception event before it becomes a significant problem for the business.

This challenge to members of our community, as well as to senior executives, is to continue to take responsibility and sponsorship of initiatives that broaden both individual, organizational, and cross-enterprise team skills that focus on the ability for assessing, articulating, and managing the contribution of supply chain management to the business.

 

Challenge Seven- A Global Shortage of Talent and Skills in Supply Chain Management

As Gartner and others have pointed to an increased shortage for software development and programming skills, a similar skills grand challenge can be expressed regarding the long-term need for talented supply chain management professionals on a global-wide basis.

Under the initial sponsorship of the Supply Chain Operations Council (SCOR), an ongoing multi-company effort is underway to address an industry-wide concern regarding the need for recruiting and retaining of supply chain talent over the next five to ten years.

As many in our profession are well aware, we have reached an era of the globally integrated value-chain, where supply and demand needs can come from every corner of the globe.  Of further concern is a potential lack of uniformity among various global-wide academic institutions in the teaching of broader curriculum and the preparation of local  new talent.

The origins of this initiative began in 2005 when IBM initiated a partnership with a select group of universities focused within supply chain management, requesting help in building a globally accepted competency and management career framework.  Since that time, companies such as Boeing, Intel, Molson Coors, Procter & Gamble and Whirlpool have joined in broader sponsorship of this effort.  Thus far, this industry diverse committee has completed a survey where 300 plus companies among seven different industries have provided input on supply chain process and skill needs required within their organizational teams. Perhaps readers have participated in this survey.  I posted an update on the initial findings of this survey (Supply Chain Skills Gap) back in May.

One of the observations of this survey reinforced the stated need.  “There are concerns about (supply chain) resource stability and the value of employees understanding of country-level idiosyncrasies, which only be quelled by building sustainable, local talent.”

 The ultimate goal of this challenge is to generally overcome longer-term skill and talent needs, as well as forge partnerships with industry and academia for attracting more numbers of talented students and professionals into the supply chain management profession.

A Final Note

My purpose in penning this three part series is to stimulate both thought and discussion, with the goal of providing clarity and knowledge-sharing within various supply chain related organizations.  I encourage Supply Chain Matters and other associated blog readers to add their commentary to this articulation of challenge for the community.

You can also contact me directly with your comments at bob.ferrari@theferrarigroup.com.

 Bob Ferrari