Recently, researchers Ruamsook and Craighead detailed what they believe is a perfect storm brewing in US supply chain management that will “contract the pool for supply chain talent”.¹ A similar set of circumstances exists in South Africa.
The American ‘Storm’
Ruamsook and Craighead’s research found key emerging trends that “individually create tension and potential disruptions in the supply chain talent pool”. The prospect that these trends may collide creates the spectre of a supply chain talent perfect storm.¹
These trends are:¹
1. Industry demand for new supply chain talent Despite economic uncertainty, the US Bureau for Labor Statistics projects that Logistics jobs will grow by 26% between 2010 and 2020 – twice as fast as the 14% growth estimated for other key occupations. Author, R.J. Bowman found that ‘demand is estimated to exceed supply by a ratio of 6 to 1’.
2. Supply chain talent gaps The gap between demand and availability continues to grow. The US Census Bureau estimates that 60 million ‘Baby Boomers’ will exit – and only 40 million ‘Generation X’ers’ will enter – the workforce by 2025.
3. Supply chain profession dynamics This growing skills gap is intensified by the US’s “transition from ‘industrial’ to ‘information/service’ economy, changing the profession’s dynamics.” Projections suggest that “three out of four jobs in supply chain will change by 2015 and that 60% of all new jobs will require skills that only 20% of the workforce possess”.
4. Potential business faculty shortages The capacity of academia to create new talent is in question. The Doctoral Faculty Commission estimates a shortfall of 2500 new business doctorates by 2014. Contributing factors include budget pressures, low completion rates and the fact that many new graduates choose industry positions over academic positions.
The South African ‘Storm’
Key trends appearing in the US are mirrored in South Africa, albeit for slightly different reasons.
1. Industry demand for new supply chain talent Demand for highly-skilled individuals is high. Adcorp’s Skills Index reported that 86% of an estimated 470 000 private sector vacancies are for individuals earning above R400 000 per annum², while 63% of respondents to Barloworld’s 2014 supplychainforesight Survey ranked ‘Lack of Relevant Skills and Talent’ as a top current strategic business constraint.³
2. Supply chain talent gaps⁴ The ‘2012 Supply Chain Skills Gap Survey’ found that the “skills gap has widened considerably, severely affecting the competitiveness of the South African economy”. 65% of respondents indicated difficulty in filling tactical positions, while 66% battle to fill strategic jobs.
3. Supply chain profession dynamics South Africa’s growing skills gap is intensified by an inability to properly develop new supply chain talent, primarily owing to a failing government education system.
Unions successfully fought to prevent the introduction of performance standards, resulting in South Africa ranking 133rd in ‘Quality of Primary Education’ and 146th in ‘Quality of Higher Education’ in the WEF’s Global Competitiveness Index.⁵
4. Potential business faculty shortages Low enrolment and pass rates affect South Africa’s capacity to create the academic talent needed to develop supply chain skills.
Suellen Shay estimates that 25% of students enrolled in a Bachelor’s degree do not pass first year, while only a third will graduate within three years and half will not graduate at all.
Suggested strategies to weather the storm¹
Ruamsook and Craighead found that “future-focused, integrated talent management programmes that are aligned with corporate strategy” and that are underpinned by the following five strategies ensure that supply chains are prepared for the ‘perfect storm’.
1. Create a personalised employee value proposition (EVP) Structured EVPs span ‘opportunity, work, rewards, people and organisation’ and should be personalised, measurable and regularly updated.
2. Map talent needs Identify must-have supply chain competencies, assess gaps between existing and needed skills sets and continually update a ‘supply chain competency framework’ to ensure that future needs can be met.
3. Focus on retention Despite economic uncertainty, voluntary turnover remains high – and is set to increase in Generation X and Y, necessitating a strong focus on retention.
4. Invest in talent and leadership development Professional development plans are a solid defence. Good plans balance formal (university courses and certifications) with informal (on-boarding and on-the-job-training) programmes. Make the shift from training to learning and include global mobility and job rotation in areas outside of supply chain.
5. Land top new talent early Create a talent pipeline, particularly for “positions that are typically difficult to acquire, by collaborating with colleges, universities and even high schools”.
It’s likely that the ‘perfect storm’ will have a global effect. What is your supply chain doing to weather the storm? Share your thoughts by joining our discussion on LinkedIn.
1: ‘A Supply Chain Talent’, Kusumal Ruamsook and Christopher Craighead published in Supply Chain Management Review, January/ February 2014 2: Adcorp Employment Index, January 2014 3: 2014 supplychainforesight, Barloworld 4: ‘An Update of the Supply Chain Skills Gap Survey in Sou
th Africa’, Institute of Transport and Logistics Studies (Africa), University of Johannesburg 5: ‘Global Competitiveness Report 2013-2014’, World Economic Forum 6: ‘Education in South Africa: Problems and Future Possibilities’, SA Booksellers, March 2014
7. 'Perfect Storm' brewing for South African supply Chain Talent', SmartProcurement, May 2014