by Jennifer Hart Yim | Oct 30, 2018 | Blog, Logistics, Supply Chain
In order to transform and mature, these supply chain elements need to be incorporated into a brand’s foundation: stakeholder alignment, visibility, and role clarity.
This guest post was written by Paul Rea for Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
I’ve spent my professional life working in and leading industrial and consumer product supply chains. They all have the same foundational needs that I group into three general areas: Stakeholder Alignment, Visibility, and Role Clarity. Organizations with mature supply chains will likely have this embedded in their DNA already. Immature supply chains that are looking to transform from something reactive to far more collaborative and effective may not. They need to. Supply Chains without these elements are likely incapable of further transformation and maturation.
1. Stakeholder Alignment:
Communicate, collaborate and communicate some more. Find out where you (and everybody else) are going.
Supply Chain is a river running through the company, winding through geography, and facilitating and transporting so much commerce. The vision driving supply chain needs to be completely aligned with its stakeholders and corporate strategy. Even between the rudimentary goal posts of cost containment and service delivery, supply chain needs to consider its internal stakeholders in commercial, finance, manufacturing, regulatory, quality etc. as they all influence, and require support from, the supply chain. Imagine a team that set out to drive costs from the network by extending transit times and managing waste and inventory to that perfect “Lean” minimalism. They have potential problems in a speed to market centric sales strategy. Supply chain needs to be at the table when key commercial strategies are being set or the team and potentially the organization run the risk of fatal mis-alignment. Then, ongoing planning and execution should be managed through a Sales and Operations Planning process (S&OP).
I’ve used internal alignment examples, but the supply chain has many external stakeholders too, not the least of which are 3rd party partners and the customers themselves. The same principles apply. In many cases supply chain will use sales/marketing initiatives as the proxy for the customer’s voice, but it’s not unreasonable to conduct supply chain reviews with key customers. Regular planner to planner (vendor to customer) interfaces are key to day to day supply chain management success. (note: The entire concept of vendor management falls within this bucket.)
2. Visibility:
You must be able to see what you’re doing, and the numbers should add up.
Think of the vast amount of end to end supply chain activities that live outside your walls, from overseas suppliers to 3rd party finished goods DC’s, not to mention the holy grail of supply chain planning itself; the demand signal. Too often people don’t look past their own ERP when thinking of supply chain planning, management and execution. Holistic, managed visibility is critical as complexity or channel distance grows. Remember Mr. Drucker’s “what gets measured gets managed”.
This is more than data and some KPI’s. It requires the right granularity. A monthly KPI may mask what actually happens every Tuesday afternoon. Data and averaged metrics without meaningful analysis and management are dangerous to supply chain. Inventories (raw and finished), transit times and supplier lead times all need to be continually assessed against good demand forecasts, marketing programs and other requirements. The numbers also need to be as real as possible. “System” inventories must match real inventories or there could be a serious mis-fire on a reorder point. Actual transits need to be reviewed in real time. Imagine the manufacturing lead time chaos created if import raw materials were simply presumed to be hitting the port on schedule from when a P.O. was cut (manually or out of an MRP system). Visibility goes far beyond data itself, and an expectation of disciplined regular monitoring and management has to sit on top of the data.
3. Role Clarity:
Get organized.
Supply Chain is a team sport. Silo-ed, uncoordinated (different than decentralized) or poorly staffed supply chain structures can result in decisions that sub-optimize the whole or outright conflict with each other. Even “segmented” channels need to be considered in the whole, somewhere. Supply chains can be complex and distant requiring constant attention. You must invest in either robust tools supporting the process or appropriate head count to compensate. This breaks into a couple of key elements:
a) The specific jobs or activities. Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery). Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are. Manufacturing (make) is often structurally not part of the actual Supply Chain team but is literally surrounded by it and the activities are highly interdependent. In the preferred model of a demand driven Supply Chain a demand forecast drives both production planning and supply chain planning which in turn drives procurement directly and purchasing strategically. Purchasing is also influenced by the forecast directly.
Supply Chain planning and demand planning are different. The demand planner’s role is to be the custodian of a high level of forecast accuracy compared to actual demand. If there is not a credible owner of demand planning (beyond finance gathering forecast data) in the organization then supply chain needs to account for that. I can’t over-emphasize the importance of a good item, location and time sensitive demand forecast to supply chain’s success. Think of it like a TV picture where the demand/forecast is the cable signal input and Supply Chain is the TV set itself. Regardless of how fantastic the set is if the input signal is poor or corrupt the picture on the set will be bad. And there’s very little the rest of the Supply Chain group can do to fix it other than educated guesses.
b) The talent itself. Make sure you staff the right people. Internal moves are great because they shorten or eliminate the company specific learning curve and can further employee development and engagement, but it can be dangerous to be a completely “homegrown” supply chain team. Its like running a race with an in experienced pit crew. Never be afraid to go outside and get the appropriate talent if you don’t have it internally. Jane may be a great performer in sales but does that mean she would necessarily succeed in accounting? Why then, supply chain.
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by Jennifer Hart Yim | Sep 26, 2018 | Blog, Content Marketing, Leadership, Logistics, Marketing, Supply Chain, Talent
In today’s job market, candidates are in such high demand, companies are posting positions with little or no experience requirements.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
On the Argentus blog, we’ve spent the past few months charting the strong job market and its effects on hiring. My, how things have changed. A few short years ago, publications were writing about how employers weren’t bothering to hire for their open positions. Now, candidates are in such high demand, companies are more and more doing something that would be considered radical in the previous economy: posting positions with no experience requirements.
[bctt tweet=”Companies like Microsoft, Bank of America and Github, are in particular relaxing education requirements and looking at candidates who don’t have degrees for positions that would have required a degree during the recession.” username=”Fronetics”]
Kelsey Gee at the Wall Street Journal gave some frontline reporting about the talent picture in the U.S. economy, which is beginning to see strong wage growth follow historically low unemployment rates. She charts how more companies are becoming flexible in their hiring process, to the point of doing away with experience requirements for some positions completely. We’ve written before to argue that companies should hire people for their potential – especially junior employees – and in this market it seems that more companies are putting this into practice. Companies like Microsoft, Bank of America and Github, are in particular relaxing education requirements and looking at candidates who don’t have degrees for positions that would have required a degree during the recession.
Alicia Modestino, an economist at Northeastern University, has argued that in times of recession companies tend to raise job requirements, like in 2008. In times of expansion – like we’re seeing now – companies become more flexible in their requirements to compete for talent, a practice Modestino calls “Down-skilling.”
At first, it might be easy to assume that companies are only doing this for transactional or administrative positions, but the Wall Street Journal interviewed the President of SCM talent group – a Supply Chain Recruitment firm in the U.S. – who said that companies are re-evaluating their requirements for Supply Chain Managers and other strategic positions. He said that his recruitment firm has been turning away clients who want to fish for underpaid or unaware applicants instead of bolstering education, experience and compensation levels in order to compete.
At Argentus, we’re working in the same vertical in Canada. Candidates in our market are in such high demand that we’ve been doing the same.
Anecdotally, we’ve seen a small uptick in roles for high-potential entry level grads in Supply Chain Management – (though still not as many as we’d like to see, with the high number of new grads that come to us!) Companies are becoming slightly more willing to relax requirements on the junior end to hire quickly; in a hiring market as strong as this one, “entry level” can actually mean entry level instead of, paradoxically, requiring at least 3 years of experience. But companies should be more flexible, at least if they want to actually hire instead of kicking tires.
In strong job markets, companies can’t afford to hire the same way they did during a recession. More employees in Procurement and Supply Chain are waking up to their own value, and the strong job market is compounding an already-considerable talent crunch. Hiring managers can’t afford to practice magical thinking in their hiring in this economy – the type of thinking that says, “if we post it, they will come,” or that treats employees like they have no leverage in the process.
The WSJ outlined three options that companies have to keep down hiring costs and secure talent in this market:
- Offer more money up front
- Retrain current staff to upskill them for changing requirements, or:
- Become more flexible in their job requirements.
All three are valuable options, but for some reason the third one has always been a bit of a third rail. Hiring is a risk, and companies don’t want to hire someone who can’t do the job. But just because someone hasn’t done the exact same thing before, or just because they don’t have a degree, or just because they’ve done it before, but in another country, doesn’t mean they can’t do it.
There will always be lots of positions with considerable requirements that can’t be flexed away: a Director of Vendor management who’s conducting a business transformation obviously needs to have done that in the past. A Senior Manager tasked with setting up a totally new Supply Chain needs the deep base of knowledge and connections that certain experience provides. The necessity of strong experience and education requirements makes sense for some positions.
But for a Supply Chain Analyst, or a Buyer role, companies are well-served to relax hard-and-fast requirements and treat applicants on a case by case basis. Assess skills, assess technical and analytical capability, without requiring that candidates fit a specific experiential profile.
In our interviews with senior Supply Chain and Procurement leadership, one thing we hear again and again is that strong business acumen and soft skills – in other words, potential – is more important for junior employees than specific education requirements. So if the Wall Street Journal report is accurate, and more companies are waking up to this line of thinking, you know what?
Bring it on.
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by Jennifer Hart Yim | Aug 30, 2018 | Blog, Leadership, Logistics, Supply Chain, Talent
Bad leadership in procurement has the potential to sink a company’s reputation, making it difficult to hire at all levels below it.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
Everyone knows that a bad hire can be really costly to a business. When you account for hiring, training, and onboarding costs, plus the opportunity cost of not hiring a successful employee – not to mention the impact on workplace culture – hiring the wrong person can set a company back tens of thousands of dollars. This is something that people have written about widely across the vast array of blogs about talent.
But what are the costs of hiring the wrong employee (or employees) at the leadership level of a business?
It’s something we’ve been thinking about recently at Argentus. As a firm that helps companies hire at all levels, we have our ears to the ground about the costs that companies bear when leadership issues have hurt their reputations in the marketplace. So particularly in Procurement – one of our core areas of recruitment expertise – what’s the cost of hiring the wrong leadership?
In short, it’s this: a bad hire at the junior level costs lots of money, but a bad hire at the leadership level has the potential to upset the apple cart and sink a company’s reputation, making it difficult to hire at all levels below it. Having the wrong leader in place can create a noxious effect that filters down into senior managers, managers, sole contributors, and junior employees. Procurement sometimes struggles to get buy-in from executives and stakeholders, and having mishandled leadership can make this task even more difficult for everyone in the organization.
Even if it’s a company with a storied history and a powerhouse brand as an employer, word always gets out if the wrong leadership is in place within any specific function. It means that individuals won’t apply for jobs. They won’t respond when recruiters contact them about certain opportunities. At a certain point, it becomes hard to find recruiters who are even willing to help hire for open roles at the company. Given that recruiters, especially those who work on a contingent basis, are usually all over clients trying to send them candidates, if a recruiter won’t work with a company, you know something must be wrong.
As we’ve written about a lot, the marketplace for talent in Procurement and Supply Chain is particularly tight in this strong economy. Companies are battling to bring in star performers who can enact business transformations, implement total cost of ownership models, boost their vendor and risk management, and modernize their Procurement as the function evolves for the future. And if your Procurement leadership develops a negative reputation in the marketplace, attracting those individuals becomes simply impossible.
We should clarify what we mean by bad leadership in Procurement.
We all know it when we’ve seen it, but there are a few traits that ineffective leaders have in common: quite often, they’re individuals tasked with leadership of a Strategic Sourcing organization who don’t have boots on the ground experience in Procurement. They often don’t have the war wounds to understand the function from bottom to top. Strategy and vision are important, but subject matter expertise helps leaders gain credibility with the managers and analysts who are expected to execute that vision.
[bctt tweet=”We all know it when we’ve seen it, but there are a few traits that ineffective leaders have in common: quite often, they’re individuals tasked with leadership of a Strategic Sourcing organization who don’t have boots on the ground experience in Procurement. They often don’t have the war wounds to understand the function from bottom to top. ” username=”Fronetics”]
It’s not absolutely necessary for a CPO or VP of Procurement to have done every job in the function. But if they haven’t, it’s important for them to be able to be humble enough to recognize the subject matter expertise of the people they’re working with – especially if they’re expected to bring changes to the organization. A great leader will admit the gaps in their own knowledge, and work to figure out how they can combine their strengths with those of their team. A bad leader will act like they understand every detail of every Procurement process and category – even if they don’t.
Beyond that, in our experience, the biggest issue with troubled Procurement leadership often comes down to soft skills. For a function that often comes down to negotiation, relationship-building, and getting buy-in, people skills are everything. Ineffective leaders will micromanage, yell, and show a lack of respect for junior employees. How can a leader expect to get buy-in from executives if they can’t build relationships with their own team members? The best leaders in Procurement will empower their teams to pursue cost savings, minimize risk, and increase value without watching them like a hawk.
Leadership is a topic so complex it’s inspired a cottage industry of books and academic research – so we can’t hope to address everything about how to hire effective leaders. But what can companies do to make sure they don’t risk the almost-priceless commodity of their employer brand by installing bad leadership? Be very careful about the leaders that you hire. These individuals should either be subject matter experts, or be very willing to learn from their team-members. When interviewing prospective hires, try to assess their ability to be empathetic and build consensus, and be wary about boasts that they can enact sweeping changes through their force of will alone.
If you can’t, you might be risking more than just the time it took to hire.
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by Jennifer Hart Yim | Jul 30, 2018 | Blog, Content Marketing, Logistics, Marketing, Supply Chain, Talent
A new article discusses the way that automation, AI and big data are transforming the industry. It raises the alarm that supply chain management will soon cease to exist, only to assert that it will still exist, just in a very different form.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
A new article in Harvard Business Review has been generating some automation-related controversy in the Supply Chain Community, as well as lots of buzz and interesting conversation. Naturally, we at Argentus want to weigh in. Titled, “The Death of Supply Chain Management,” the article discusses the way that automation, AI and big data are transforming the industry. It raises the alarm that the function will soon cease to exist, only to – as these “X is dead“ articles often end up doing – assert that it will still exist, just in a very different form.
Beyond the obviously clickbait headline – which we couldn’t help but indulge in ourselves – the article makes some fascinating predictions about the future of supply chains. But even more relevant to us at Argentus, it has some interesting forecasts about the future of supply chain talent in particular, in the coming world where automation is king.
Automation is one of the hotter topics in the supply chain community – as it is across the entire economy. As a major feature in McKinsey discusses, automation has already made a number of jobs in the field way less relevant, threatening to eliminate those jobs entirely. Many companies have already automated their front-line transactional purchasing activities. Automation has eliminated a number of blue-collar supply chain jobs in warehouses and distribution centres, and driverless trucks stand to transform the logistics field, eliminating the need for millions of truck drivers.
But many are alarmed that automation will replace white-collar workers as well. The HBR article talks about how more companies are automating functions like demand forecasting, which has long been seen as more of an “art” than an exact science. No longer.
In the authors’ words, “within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end workflows and requires very little human intervention.”
[bctt tweet=”Automation through digital technology isn’t really just about lowering labour costs, it’s about creating huge opportunities for companies to dive deep into data and create end-to-end visibility into their own supply chains.” username=”Fronetics”]
Automation through digital technology isn’t really just about lowering labour costs, it’s about creating huge opportunities for companies to dive deep into data and create end-to-end visibility into their own supply chains. This kind of visibility opens up huge opportunities, not only by lowering risk but also by letting companies become more strategic.
The HBR article outlines an interesting development: more retail and manufacturing companies are adopting “digital control towers” for their supply chains. These companies have physical rooms staffed with dozens of data analysts working in real-time to identify and squash challenges.
Picture an airport control tower, but for supply chain management: staffed 24/7, full of large screens full of 3d graphical representations of potential bottlenecks and inventory shortfalls all the way from order to delivery. These control towers are full of systems that can automatically correct for various issues, and they’re increasingly considered to be core aspects of company operations.
The authors outline how mining company Rio Tinto is using robotic train operators, cameras, lasers, and tracking sensors to monitor and fully automate its supply chain from train to port.
But do these developments hearld the end of the need for skilled Supply Chain professionals? Of course not.
A highly-automated “digital control tower” needs responsive individuals with deep understanding of how to solve Supply Chain challenges. An automated mining supply chain deep in the jungle, monitored in another country still needs people to monitor it and respond to issues.
Maybe unsurprisingly, the HBR article ends up saying that Supply Chain people will always be in demand, but that skill needs are changing, and we agree. People need to re-skill, up-skill, and educational institutions need to make sure that they’re training people with skills for the future and not the past. In the short term, executives who can manage people doing repetitive tasks (like transactional purchasing) need to learn how to manage information flows for more highly-specialized workers. Further down the ladder, the highest-demand analysts will be those who can draw insights from an ever-expanding pool of data and communicate them to senior leadership. Companies will need specialists with deep understanding of both technology and operations to design and implement automated supply chains – even more than they already do.
But beyond the trends that the HBR article outlines, we think they’re missing a key element: even if automation progresses to affect white-collar workers, even if data automates functions like supply planning, logistics, and sourcing, the human element will always matter. Companies will always need people who can build relationships with vendors when conducting large-scale Procurement. They’ll always need people who can negotiate contracts and rates, people who have the emotional intelligence to understand the psychology of the person sitting on the other end of the table, and arrive at a deal that drives value.
Machines will get better at the tactics, but the strategy will always be human, at least until the robots take over the world completely. (Which we don’t think will happen, by the way).
In the 19th century, luddites protested the adoption of machines in the British textile industry, fearing that they’d be out of a job. And they were. But while opportunities for weaving by hand disappeared, employment didn’t: the industrial revolution pushed new skillsets to the fore, creating a demand for people to manage production – leading to today’s supply chain function, by the way – while raising overall wealth and standard of living in the process.
While the rise of AI, big data and workplace automation has some important differences, we think it’s a worthwhile analogy: as with then, these new technologies will shift the employment landscape and put the squeeze on individuals with transactional or blue-collar skillsets. But supply chain professionals who can up-skill themselves, and become masters of the interpersonal skills that will never go away, will have more opportunities than ever before.
Take it from a company that’s on the front-lines of hiring in Supply Chain: while automation eliminates jobs at the lower-skilled end of the spectrum, demand for high-skilled candidates is higher than ever before, and only rising. So is Supply Chain Management on death’s door?
Not so fast.
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by Jennifer Hart Yim | Jun 27, 2018 | Blog, Content Marketing, Logistics, Marketing, Supply Chain, Talent
Millennials are breaking stereotypes across the industry. This new generation is bringing youth, better education, and lots of diversity to supply chain management.
This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.
Everyone knows that the demographics of the Supply Chain industry are changing. They have to. Within a few years, demographers estimate that 400,000 baby boomers will be retiring in Canada every year. Within the Supply Chain industry, the looming – and in fact, already-started – retirement of baby boomers and shifting job responsibilities brought about by technology are creating a talent crisis.
It’s something that we’ve covered extensively at Argentus. We’ve written about how the industry can fill the burgeoning gap in talent: by increasing educational opportunity, doing more outreach to young people, and improving communication about the vast career potential in the field – a field that until recently was stereotyped as transactional, hidebound and, in a word, boring.
Today’s Supply Chain professionals know that – especially at the highest levels – the field is anything but. And it looks like some of these efforts to avert the talent crisis have begun to bear fruit: a major new survey shows that millennials are moving into the workforce in a big way, changing its Supply Chain’s demographics and disrupting the industry.
The survey, conducted by Peerless Research Group, Supply Chain Management Review, APICS and APQC surveyed 676 millennials (between the ages of 22 and 37) in April 2017 to find out about their demographics, expectations, goals and current career status within the Supply Chain industry. It’s a far-reaching report with a lot of results busting down stereotypes both about Supply Chain and millennials themselves.
As a recruitment company specializing in Supply Chain and Procurement, Argentus sits at the nexus of a lot of these demographic changes. Needless to say, we read the report with great interest. Here were some of our biggest, and most surprising, takeaways.
Takeaways from Apix survey on millennials in supply chain.
Careers are becoming more intentional:
- When we speak with SCM professionals from the baby boomer and Gen X generations, it’s really common for us to hear, “I didn’t plan on going into Supply Chain, but I fell into it.” But this tendency is changing. The report found that 75% of millennials in Supply Chain jobs intentionally began their careers within the field.
- Planning and Procurement are taking on a bigger role in the field: 22% of millennials surveyed are working in Planning and 21% in Procurement, compared to 15% in Logistics, 11% in Inventory Management, and 9% in Manufacturing.
Supposed “Job Hoppers” are actually staying put:
- We’re maybe a ways past the 2008-2014 heyday of stereotyping millennials in the workforce. Companies are realizing millennials’ huge value as employees. With that in mind, the report still dispels some classic stereotypes about millennials in the workforce. There’s a perception that millennials are “job hoppers” who don’t have loyalty to their employers, but the survey found that 38% of millennial respondents have worked for just one employer their entire career. 65% had worked for their current employer for more than 5 years.
Educational opportunities are taking off:
- One of the biggest growth areas in the field is the increasing prevalence of educational opportunities as more universities and colleges bring SCM programs online. 66% of the millennials surveyed have either undergraduate or graduate degrees in Supply Chain or Logistics. APICS conducted a similar survey in 2016 – this time of senior leaders in the field – and found that only 19% of the leaders surveyed had degrees in the field, which suggests that millennials are taking advantage of these increased educational opportunities.
- 59% of the millennial supply chain employees surveyed have a bachelor’s degree of some kind, even if it’s not in Supply Chain or Logistics. The 2016 leadership survey found that only 45% of Supply Chain leaders had degrees. It’s worth mentioning that more companies are requiring degrees these days for sole contributor roles, so this might be a response to that market pressure.
- Millennials are interested in continuing education in the field, suggesting it’s not just a fly-by-night career for them. 65% of the survey respondents indicated that they were planning on pursuing further education in the next 12 months.
The gender gap is chainging, but persistent:
- More women are entering the Supply Chain field. 61% of the survey respondents were men, whereas 39% were women. It’s still not as close to even as it should be, but the breakdown was more evenly split than APICS 2016 leadership survey mentioned above: in that survey of Supply Chain leadership, 76% of respondents were male and only 24% were female. This indicates that more millennial women are entering the field than their Gen X and baby boomer counterparts. It also indicates that, as we’ve written about before, more needs to be done to bring women into Supply Chain leadership
- There’s still a stubborn gender pay gap in the field, even for millennial employees. The average compensation for male respondents was $92,920, while it was only $78,840 for women in the cohort. The survey found that men and women generally start off with equitable compensation, but the gap grows – as it does in many other fields – as they move up into more senior roles.
Millennials expressing a high degree of career satisfaction:
- On the job satisfaction front, there were some absolutely massive numbers that speak to the way the field is becoming more flexible and dynamic: 85% of millennials surveyed said that they were likely to be still working in Supply Chain in 5 years. 81% said they felt as if they could make a difference in the Supply Chain field. 85% said they agreed that the field was a diverse workforce, and 87% said that they thought working in the field would help with personal growth and development.
[bctt tweet=”87% of millennials surveyed thought working in supply chain management would help with personal growth and development.” username=”Fronetics”]
It’s exciting to see the way the field is growing and adapting to change, and the way that millennials are stepping up and reaping some of this career’s rewards. We encourage you to check out the full report. There’s a lot to dig into beyond the takeaways we’ve identified here – lots of insights that will be interesting to anyone who’s interested in the way Supply Chain careers are taking off in the 21st century.
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