By Richard Sadler, director of business development at Industry Forum.
Thanks to Amazon and the same-day-service revolution it kick-started, it’s no longer enough to just build and market a good product. Customers of all types are now trained to expect ease of purchase, same- or next-day delivery and lots of choice and customisation – without paying more for it. One of the world’s most successful companies, Amazon is nothing but a very effective supply chain, and it has changed how we all do business.
At the same time, we are witnessing a building crescendo of consumer concern about the environment, putting the provenance and sustainability of goods – as well as the wellbeing of the people that make them – under increasing scrutiny. This is leading businesses to clean up their acts – in other words, their supply chains – for compelling commercial reasons.
Meanwhile, new technologies like blockchain and artificial intelligence are facilitating sea change improvements in business functions – including supply chain management (SCM). And the pace of change is accelerating.
On top of all this, Brexit uncertainties and COVID turmoil are shining a spotlight on the supply chain as a critical business function affecting us all. When it’s disrupted, companies struggle, jobs are lost and access to essential goods and services is compromised. Perhaps for the first time ever, the supply chain is a hot topic.
However, despite all the attention, the SCM profession is not yet where it needs to be. Consequently, businesses and supply-chain executives are failing each other, with serious consequences.
Lack of definition
At the heart of the problem is a worrying lack of clarity about what a supply chain actually is. The concept varies enormously by sector and every organisation has a different answer to the question, ‘What does your supply-chain manager do?’ If you contrast an aircraft manufacturer with an FMCG retailer, at first glance, it’s hard to see any similarities. The timeframes, customer expectations, issues and challenges are profoundly different. This makes a clear professional framework that works for all industries difficult to achieve.
Hence the occupation has historically lacked formal qualifications, accreditation programmes, membership bodies or a clear career path. This, combined with the fast pace of change, means SCM roles are often shaped on the fly and filled by people from other functions, such as engineering or operations. They may create their own brief with little guidance from above, few role models and an incomplete skillset. Meanwhile, SCM professionals remain under-represented on senior leadership teams, meaning this mission-critical activity isn’t discussed enough at board level.
Supply chains are complicated
One thing that all sectors can agree on is that supply chains are usually highly complex. Despite the name, they are not chains at all, but heterogeneous, responsive webs made up of tiers of suppliers, manufacturers, distributors, retailers, customers and even waste managers and recyclers. Within this ecosystem, the same organisation can be a supplier, a client and even a competitor – and it can be each several times over. The modern, customer-centric supply chain requires flexibility, speed, advanced technology, proactive and intelligent use of big data, evolved management of risk and complexity and an integrated and committed approach to corporate social responsibility. When it comes to supply chains, standing still means falling behind.
Another prevailing feature is that they are embedded within every business function. There is no part of an organisation that sits outside of its supply chain, and this can make it hard to see, describe and understand. Unlike plant, people or products, it’s largely invisible – at least until it goes wrong.
Damaging SCM skills gap
The skills required to strategise, manage and monitor a supply network are extensive and continuously evolving. SCM professionals need to be as commercial as marketing specialists, as practical as operations leads and as technical as IT strategists. With little support available, acquiring and demonstrating the necessary competences is not straight forward.
Little surprise, then, that demand for SCM executives exceeds supply by six to one. Hiring is made even harder because employers have little against which to benchmark potential candidates and evaluate performance. Furthermore, sector-specific requirements often mean they have a very small talent pool to draw from, frequently compelling them to look internally to nurture the people they need. Sectorisation, together with SCM’s lack of visibility and senior leadership, also inhibits career opportunities, cross-fertilisation and innovation and means young people aren’t being attracted into the profession – storing up more problems for the future.
All of this is very bad for business.
How to fix it
To enable SCM to reach the level of maturity that businesses and individuals urgently need, collaboration is needed to identify, support and build on aspects that are common and beneficial to all industries. While it’s true that sector differences are significant, commonalities are also substantial, and increasing all the time; SCM recruitment, industry-agnostic technologies like blockchain and the pace of change are challenging across all sectors.
There is also a collective business lexicon and common understanding of supply-chain principles to build on in the form of APICS (now part of the Association of Supply Chain Management), the global standard for SCM for over sixty years. Encouraging people to get APICS-certified and investing in ongoing professional development are very practical ways to ensure consistent standards and facilitate the movement of talent within and between sectors. Professional forums and peer-to-peer mentoring schemes could help too. A collective effort to educate young people about SCM as a fulfilling and lucrative career choice is also needed, through outreach to universities and schools and sponsoring students through relevant degrees. And businesses could take more risks by hiring SCM executives from other sectors, perhaps on temporary contracts.
Actions such as these can be undertaken internationally, nationally, locally and sectorally – as well as by individual organisations and SCM specialists. Members of the profession need to keep talking to each other and cooperating to demonstrate how SCM fits into overall corporate strategy. The more they come together to express this, the greater the momentum that can be achieved and the more focus there will be on these vitally important issues.