by Fronetics | Jan 12, 2016 | Blog, Leadership, Marketing, Strategy, Supply Chain, Talent
Recruiting and retaining top talent is one of the largest issues the supply chain faces today. It has, in many ways, become an industry of gaps: skills, talent, and gender, to name a few. How can companies secure their future by acquiring, developing, and keeping employees with the potential to undertake future leadership roles?
Fronetics Strategic Advisors works with clients to understand and execute on talent acquisition, performance management, learning and development, and succession management. We also work with clients to design and develop roles and responsibilities, on leadership development, mentoring and counseling, and on performance management and compensation strategies.
Here are our most-read talent articles of 2015:
While the number of full-time women in the workforce is up 15% since 1979, the number of women in the manufacturing sector is the lowest it has been since 1971.The gender gap extends more broadly to the supply chain, as well, with 70% and 80% of positions held by men. This article examines the talent crisis within the industry as an opportunity to help close the gender gap, and offers suggestions for building that bridge. Read the full article.
This interview with Rodney Apple, founder of the SCM Talent Group and supply chain recruiter for the majority of his 19-year career within the staffing industry, examines the challenges facing the industry and opportunities to address the talent crisis moving forward. Read the full article.
The outlook seems dire: by 2025, 60 million baby boomers will exit the workforce, leaving a gigantic gap when 40 million millennials take their place. What’s more, as few as 20% of the workforce will possess the broad range of skills required of 60% of all new supply chain jobs. The good news is that this looming crisis represents an ideal opportunity for recent college grads and mid-level supply chain management. Companies hoping to appeal to top candidates in the future should be proactive about meeting their professional needs through initiatives like competitive salaries and cross-functional training — or else, they might miss out. Read the full article.
Zappos offers new hires a $4,000 bonus to quit after an initial training program — and it actually has helped them retain top talent. Offering an early out to employees can be an effective method to detect personnel issues up front and ultimately can save your company from a major financial loss in the future. Read the full article.
When it comes to your career, connections matter. This article lists five reasons why building a strong network is crucial to your professional success. Read the full article.
Millennials — or, those born after 1981 — potentially could breathe new life into the graying supply chain industry. This article examines who millennials are and how companies might attract and retain talent within this oft-misunderstood generation. Read the full article.
Promising employees expect more from their employers when they outperform their peers — and not just in terms of compensation (though that is very important). When those expectations are met with disappointment, the company is at risk for losing top talent. This article discusses strategies for mitigating the loss of talented employees. Read the full article.
According to one study, only 12.5% of companies in the supply chain industry engage in formal succession planning, or the process of identifying top internal performers with the potential to fill key leadership positions. With the dearth of talent facing the supply chain, employers would be wise to invest in succession planning (and their most promising employees) — particularly through these three aspects of the process. Read the full article.
Focusing on education and training, employee retention and growth, and rethinking the talent pool itself does not address the bigger issue in the supply chain skills gap: the industry just isn’t perceived as sexy. What can companies do to overhaul their image and attract new and qualified talent? Read the full article.
Replacing employees is extremely costly — anywhere from 50 to 400% of their annual salaries, it is estimated — yet more than 2 million people voluntarily leave their jobs each month. Companies who are not tending to their human resource assets may be taking a major financial hit. Here are five employee retention strategies to help create a culture where employees are satisfied and interested in working for you long term. Read the full article.
by Jennifer Hart Yim | Jun 19, 2014 | Blog, Logistics, Manufacturing & Distribution, Strategy, Supply Chain
Entrants to the market need to understand the barriers to entry and problems with management and transparency within the pet food industry supply chain.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
The pet food industry is a market that boasts $21.57 billion dollars in sales in the United States (2013). With 95.6 million cats and 83.3 million dogs owned in the United States, it is no wonder that there is such a large market for the food that the self-proclaimed “pet parents” feed them. However, it isn’t all good news for aspiring entrants, as they must first understand the supply chain that dictates this growing industry.
To manufacture, or not to manufacture
When a pet food company chooses to produce a product, they essentially have three options: 1) manufacture it themselves, or choose a co-packer who will either 2) use a private label or 3) manufacture the food to the specifications of the brand.
A contract packer (co-packer), otherwise known as a contract manufacturer, is a company that manufactures and packages foods for their clients. The manufacturer works under a contract with the hiring company to manufacture the pet food as though the hiring company was doing it themselves.
Co-packers can manufacture several different brands and for several companies at once. An example of a co-packer would be C.J. Foods, Inc. with manufacturing plants in Bern, Kansas, and The Pawnee City, Nebraska. According to C.J. Foods Inc., the company produces over 300 varieties of animal foods, including dog, cat, reptile, and exotic bird.
Companies typically outsource to another entity for production due to cost savings, rather than building their own plant. Additionally, they can focus on their own core competence, whether it is marketing, sales, etc. The manufacture’s core competency is production, and they have the experience and knowledge to produce the pet foods already. However, there can be many challenges associated with the management of pet food supply chains and co-packers in particular.
The challenges with co-packers
As the pet food market grows and becomes more complex, the sourcing of ingredients becomes more complicated.
Foreign suppliers source products from numerous small farms, and identities become lost and commingled. Unfortunately, brands are relying on these suppliers to meet food-safety criteria.
Additionally, these brands typically rely on audits of suppliers by private third-party companies that carry no guarantee. An example of this would be Kellogg and Peanut Corporation of America (PCA). Kellogg had PCA audited by AIB international, and PCA passed with a superior rating. However after the recall (explained in detail below), the FDA found leaks and rodent infestations within the plant.
Pet food industry product recalls
There have been two major recalls within the pet food industry in recent years.
One, the largest in history, was the ChemNutra recall in 2007. Two Chinese export firms sold wheat gluten bags tainted with melamine to Las Vegas-based ChemNutra, “the Chinese ingredient specialist importer.” ChemNutra then sold the tainted wheat gluten to pet food makers under false certificates of analysis. As a result, 5,300 pet foods were recalled, and thousands of cats and dogs were injured/killed. Owners of both the Chinese companies and ChemNutra pleaded guilty to various misdemeanors involving the mis-branding of food and conspiracy to commit wire fraud.
The second recall involves a 2009 salmonella outbreak in the Peanut Corporation of America’s plant in Blakely, Georgia. PCA knowingly shipped salmonella-tainted products across the country to many manufacturers, including those in the pet food industry. Along with the shipments, they sent certificates of analysis that indicated the product contained no salmonella, but they had yet to receive the test results (which were positive). This resulted in 3,200 pet food products being recalled, 8 deaths, and 500 illnesses. A 76-count indictment charged four former officials at PCA with numerous infractions relating to salmonella-tainted peanuts and peanut products.
These two examples are the horrific results from a lack of control over the supply chain within the manufacturing of pet foods. The consequences of these recalls, first and foremost, can cause the injury and death of both pets and people. Beyond that, there is implicit lost brand trust, consumer demand decrease, headaches for retailers/wholesalers, and severe cost increases for the company.
Solution: Improving supply chain management
Given the information above, it is essential that companies proactively work to avoid recalls through better management of the supply chain.
Co-packers become problematic when an ingredient or plant is infected because that trickles down to the many different brands and companies for whom they manufacture. That is not to say that pet food companies should never use a co-packer, especially because the cost-saving benefits can be so great. Pet food companies, however, should do their research prior to choosing a co-packer.
If you are using a private label, know where the co-packer is sourcing its ingredients. If you are not using a private label, you need to ensure you know the suppliers with whom the co-packer is working. The same rule applies if your pet food company has its own manufacturing plant, as well.
Secondly, pet food manufacturers can supplement third-party audits of co-packers’ plants with their own inspection and testing of ingredients and plant surfaces.
As a consumer purchasing these foods off the shelf, attempt to do your research, too. Although you may not be able to see exactly where products are coming from due to confidentiality of competitive sourcing, you can choose brands that have a commitment to transparency and educating the consumer on where their ingredients are sourced from. An example of this would be Natura Pet Products, which launched its “See Beyond The Bag” campaign. This part of their interactive website allows consumers to click on any product and view where in the world any specific ingredient in the product is being sourced from. Additionally, consumers can educate themselves on how Natura ensures a quality manufacturing process.
In conclusion, pet food manufacturing can be a difficult industry if a company is not well versed in the associated challenges. If a tight reign is held over the supply chain and quality manufacturing follows, the pet food industry is a growing market with a bright outlook for companies vying to do business within it.
Mikayla Cadoret recently completed her MBA at the University of New Hampshire – Paul College of Business and Economics. She is an experienced sales representative and is interested in pursuing a career in marketing or supply chain management. She can be reached at [email protected].
by Jennifer Hart Yim | Jun 12, 2014 | Blog, Data/Analytics, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
Regularly tracking your relationship with your suppliers and their performance toward your expectations is critical to ensure the success of your business. One mechanism for tracking this is the supplier scorecard. A scorecard is in essence a report card for your supplier. Supplier scorecards when used effectively can help maintain a healthy supply chain and will benefit both parties. If not used effectively supplier scorecards can damage the supplier relationship and hurt both businesses.
Effective scorecards should use meaningful metrics. If it doesn’t align with business goals then it shouldn’t be measured. Easily measured variables of no importance will just cause clutter; they could also cause a supplier to focus their performance in areas that do not matter. If the metrics are not clearly defined and understood by the suppliers then it will be hard for them to adjust their performance in these areas. Another consideration is there may be things that are important to you which your suppliers have no way of measuring or attaining the performance you are asking for.
As with all business to business relationships communication is critical for maintaining and improving supplier performance. To ensure suppliers meet your needs you should communicate to them from the offset how their performance will be measured. You can even tie bonuses and penalties into their performance scores. You should be mindful that your relationship with your supplier should be collaborative; as you grow so should they. You should share the results of your scorecards with your suppliers on a regular basis and shouldn’t wait until a review to raise a concern. Another important aspect of communication is sharing your business objectives and performance data with your suppliers. This can help them to better shape their business to meet your needs as your business fluctuates.
It is important when evaluating suppliers to have a good process in place for tracking important metrics. When possible it is best to use accurate data that is understood by both you and your supplier. If you use fuzzy metrics which are subjective then improvements become difficult to measure and target. Also, tracking metrics throughout the scoring period will help to ensure the data is accurate and your scorecard reflects actual performance.
When dealing with different suppliers it is important to make sure the metrics you are evaluating are relevant to each supplier. As a result it is not recommended to use a one size fits all approach to supplier scorecards. Another thing to keep in mind is that you may be sourcing from the same supplier through multiple locations. It is important to track each of these on its own scorecard to help your supplier learn where they are doing things right and where they are falling short of your expectations.
Where I work we have several strategic supplier partnerships. The way we manage supplier relationships is through quarterly business reviews with each of our partners. In these meetings high level representation from both companies is present. We share with our partners our business results and forecasts in addition to any major company news. After sharing this information we review our scorecard process with the suppliers, show a score card comparison, take a detailed look at each rating, and then provide an overall summary.
Our scoring system looks at aspects of quality, delivery, cost, support, and inventory management. With respect to quality we look at hard numbers like failures out of the box and returns from our customers. We take into account both product quality and process quality. When it comes to delivery we measure on-time delivery, missed shipments, and lead times. Some of our customers have long term fixed cost agreements so this metric isn’t required, for others the cost fluctuates; we measure whether or not their costs are in line with our expectations. Support has several levels including technical support, order support, and special cases. Inventory management tracks how well they are able to maintain some inventory on hand for us.
Our scorecard metrics used to be scored on the basis of a five point scale from far below expectations to far above expectations. After running through several of these scorecards we determine that it was not likely to get exceeds expectations because the only time expectations could be exceeded is if our demand was well above our forecasts. Since this goal wasn’t something attainable by a supplier of their own action we adjusted our scorecard to have only three levels, from below expectations to meets expectations.
The scorecard comparison is unique to the supplier and it shows the ratings for each of the metrics for the current review period as well as four prior quarters. We display this in a color coded matrix so that it is easy to see where each metric is improving, staying the same, or regressing from period to period. For my employer these quarterly business reviews give us frequent touch points with our suppliers. This helps us to identify issues and areas for improvement to strengthen our supplier relationships and our business.
Throughout this article I have hit on several best practices with respect to supplier scorecards. I want to stress that this is just a tool. The fact that you have a scorecard system in place should not prevent you from acting immediately if issues present themselves. After all, this should be a collaborative exercise which will benefit both your company as well as your suppliers. In addition it is important to solicit internal feedback from interested parties. Supplier scorecards should be used to make decisions about whether or not to continue supplier relations or to pursue alternative suppliers.
Mike Cleary is a Software Quality Assurance Engineer at Empirix pursuing his Masters of Science in Management of Technology from the University of New Hampshire. He has over ten years of experience in testing IP and telephony solutions across a variety of platforms. In his current role he is responsible for not only ensuring Quality in the E-XMS solution but other administrative tasks such as lab configuration, VM server, and perforce administration.
by Jennifer Hart Yim | Jun 5, 2014 | Blog, Manufacturing & Distribution, Strategy, Supply Chain
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
By now we have all heard the story of GM’s faulty ignition switches that are being linked to thirteen deaths and thirty one front-end collisions. The ignition switches in car models: Chevy Cobalt; Chevy HHR; Pontiac G5; Pontiac Solstice; Saturn Ion; and Saturn Sky, lacked the torque specs required by GM engineers. Heavy key chains, bumpy roads, or an accidental knee hit were all reasons reported that could cause the ignition switch to rotate to the off or idle position. Once this happened, the driver would lose control and the air bags would fail to deploy if a front end collision occurred. A total of 2.6 million vehicles were recalled, of that 2.2 million were in the United States. For this type of recall, GM was not requiring vehicles to go back to the manufacturer or be disposed. Rather, a more robust key ignition was distributed to all authorized GM dealerships and customers were told to bring their cars to the local dealership and a new ignition switch would be put in for them.
Despite the massive recall and all the negative publicity that goes along with such an event, GM still posted positive numbers in their quarterly earnings. GM posted an operating income of $0.5 billion for 1Q14, which is included the $1.3 billion recall-related charge. Furthermore, GM controlled approximately 17% of the U.S. market share. After the ignition switch incidents started to gain traction, GM swore to reorganize their global engineering department, and they did. So, if GM’s sales profitability is surviving, their negative press contained, and their market share intact, what exactly went wrong?
Two-thirds of General Motors automotive costs in 2014 are from supplier sourced parts. However, this was not always the situation. Back in 1999, GM underwent an extensive effort to disassemble their vertical integration in hopes of reducing overall costs. At this time, Delphi Automotive was owned by GM, but separated during the same year. For decades, GM was Delphi’s only customer, and even when Delphi executives knew GM was going to make them a public company, they were only able to move 22% of their business to other customers. When GM officially made Delphi a public company, 82.3% of their shares went to GM shareholders. That means that only 17.7% of Delphi was sold to public investors. In order to survive as a company, Delphi had to start making cost reduction decisions. To do this, companies often lay off employees and make cheaper parts, Delphi was no different. Now during this same time period, GM executives were focused on focused on costs reductions and were driven by numbers, hence the selling off of Delphi. It should be noted that if a company sells off their single largest parts supplier, fully aware that the move may cause the supplier to go belly up, there will be some strained relationships. Delphi was now thrown into a position where they must compete with other parts suppliers for GM’s business. An important part of the deal GM made when selling off Delphi was to keep all current supplier contracts. In addition, GM gave Delphi the opportunity to match any competitor’s bid until 2002. The earliest model of a recalled GM car was 2003.
Strained supplier relationships are not ideal for business, but should not affect the quality of a product, such as an ignition switch. Let’s fast forward to 2008. Delphi had declared bankruptcy three years prior and GM was beginning to pull them out of their financial burden. A contract was found between GM and Delphi that was drafted in 2008. The document is a little difficult to follow, but there are a few interesting lines in Section 5.09 Product Liability Claims. It appears that, GM said they would share the blame with Delphi for any claims against them. However, GM would not be held responsible if one of Delphi’s parts, or a part made for Delphi by a third party, fails. The contract continues on to say that GM would pay any legal fees if a claim was made against Delphi, but Delphi must defend GM through a potential lawsuit. This contract was drafted and signed in 2008, during which Delphi was bankrupt, so it appears they had little negotiating power.
This raises concerns specifically about the ignition switch specs. It came out that GM officials knew the ignition switch they purchased from Delphi was not up to their standards. After some more research, an email transaction between Delphi officials in regards to the plunger, the vital part that holds the key slot in place with a spring, and the ignition switch. At the end of the document, the original engineer drawings are attached. From the technical drawings it can be seen that Delphi did in fact outsource the design specs, and possibly the manufacturing, for the plunger design. Another document, that was preceding the email transaction, appears to inform GM that the plunger part was changed and the responsibility of the supplier is “closed”. This could have been a legal move meant to save Delphi if any claims were made related to these parts.
After all of this evidence, where does the blame lie? It would appear that GM used their powers to force Delphi into a contract that held them responsible for any claims against their products. While Delphi did warn GM that the torque requirement for their ignition switch did not meet GM’s requirement, it is unclear whether or not a verbal warning will play into the legal battle. This case is currently ongoing, and it will be interesting to see how it plays out.
Connor Harrison holds a B.S.M.E and MBA from the University of New Hampshire.
by Fronetics | Dec 24, 2013 | Blog, Leadership, Logistics, Strategy, Supply Chain
Thank you: Two Powerful Words
I have two young children. One of the values in which I am trying to instill is that of graciousness. A couple weeks ago I sat down with my daughter so that we could write thank you notes for the gifts she received for her third birthday. My five-year old sauntered by and made the comment that what we were doing was: “just plain silly because no one else ever writes thank you notes.” He got part of it right – very few people do write thank you notes. What he didn’t get right is the silly part. Taking the time to say thank you and show appreciation is not silly and is not passé. Rather, taking the time to say thank you is critical not only to your success, but also to your well-being. “Thank you;” two powerful words.
Research published in the Journal of Personality and Social Psychology found that a mere “thank you” more than doubled the likelihood that those providing help would provide assistance again. The research also found that a ‘thank you” yielded an increase of 50 percent in terms of productivity and an increase of 15 percent in the average amount of time a person spent providing assistance. The researchers also noted a spill-over effect. That is, gratitude begets gratitude.
Why is a simple “thank you” so powerful? The researchers found that expressions of gratitude increased feelings of both self-efficacy and social worth. They also found that it is the feeling of being socially valued more than the feeling of competence that encourages people to provide more help in the future. In short, people like being acknowledged and valued for our efforts.
While there is rationality at play here, Peter Bregman, CEO of Bregman Partners, Inc., believes “[S]aying ‘thank you’ is mostly an emotional act. It connects one person to another. Saying ‘thank you’ doesn’t just acknowledge someone’s effort, thoughtfulness, intent, or action. It acknowledges the person himself.” Why does this matter? Because, Bregman continues: “Acknowledging each other is our basic responsibility as human beings living in community with other human beings.” Mary Kay Ash, cosmetics entrepreneur, puts it another way: “There are two things people want more than sex and money: recognition and praise.”
Acknowledgement, recognition, praise, expressions of gratitude – what is incredible is that these don’t need to be achieved via an extravagant and expensive gift, rather they can be achieved, for free, with two words – “Thank you.”
In an article on the value of networking Kathryn Minshew, founder and CEO of The Muse and The Daily Muse, calls attention to the fact that people are more likely to give opportunities to those who are most in their recent memory. Given this, she offers the following advice: “Be the person they saw yesterday as often as possible.” What Minshew leaves out is that that last memory needs to be a positive one. A simple and effective way to leave a positive memory – say, write, or type “thank you.”
Robert Eckert, former chairman and CEO of Mattel, offers the following tips on expressing thanks within the workplace:
- Set aside time every week to acknowledge people’s good work.
- Handwrite thank-you notes whenever you can. The personal touch matters in the digital age.
- Punish in private; praise in public. Make the public praise timely and specific.
- Remember to cc people’s supervisors. “Don’t tell me. Tell my boss.”
- Foster a culture of gratitude. It’s a game changer for sustainably better performance
- Acknowledgement, recognition, praise, a simple “thank you.”
I offer up a challenge to you. Over the next week take the time to say thank you, to acknowledge others, to praise, and to show your appreciation. My guess is that you will be both surprised and impressed by what and where two little words will get you – so much so that you’ll make thank you second nature.
