Are you building next-generation supply chain talent?

As companies race to achieve supply chain excellence, the missing link for many of them is developing and retaining supply chain talent. While most have programs for entry-level hires and executive leaders, the biggest gap, as shown in Figure 1, is in the development and retention of mid-management leaders (senior managers and directors).

The reasons for this gap are many. Early retirements, growth in global markets, and the growing importance of supply chain leadership are all creating greater demand for supply chain talent than ever before.

The struggle is about what to do. What defines success in filling this gap? Current academic programs are a better fit for building entry-level skills, and certification programs that are focused on historic practices are not sufficient. That's because our research at Supply Chain Insights shows that traditional processes are not able to create growth while also minimizing costs and managing inventory. Complexity is just too great.

Instead mid-level managers need to be able to build the supply chain processes of tomorrow. For example, we believe that by 2030, a company's supply chains will be seen as a customer-centric, demand-driven network of networks that are driven directly by market signals rather than by internal orders, marketing and sales input, and financial budgets. To build these next-generation supply chain processes, our next-generation supply chain leaders need to be able to question the status quo and rethink processes. Developing the right talent to embrace new ways of thinking is critical. Our training programs, therefore, can no longer focus solely on the continuous improvement of existing processes. The focus needs to be on learning new forms of analytics, building "outside-in" processes, developing skills in horizontal processes (such as sales and operations planning, revenue management, supplier development, and new product launch) and building network capabilities.

Culturally, companies need to bridge the difference between a traditional focus on continuous improvement and the need to develop processes that seize growth through disruptive changes. For example the shift from inside-out processes (being driven by internally driven signals such as marketing and sales information or financial budgets) to outside-in processes (being driven by market signals such as point-of-sale information) is a disruption. It cannot be tackled as a gradual evolution. Digital manufacturing is also a disruption. It is not an evolution. To drive improvement in balance-sheet and income-statement performance, companies need to get clear on what types of changes are disruptive and which can be pursued through continuous improvement.

Another thing that supply chain leaders of the future will need to be conversant with is emerging technologies. For example, in Figure 2, I share insights from the research study on embracing new forms of analytics that we conducted for the Supply Chain Insights Global Summit. Embracing these new forms of analytics will require supply chain professionals to work with technology companies and learn a new language that most supply chain leaders do not know today.

As you work on your strategic plans for 2017, use Figure 3 as a guide to help your organization ask tough questions. Are you building next-generation supply chain talent? Can your organization adequately discuss how you are going to build 2030 strategies? Is there a clear design? Do you understand the role of new technologies such as analytics, robotics, machine-to-machine automation, and the Internet of Things? Do your work teams have a clear vision of the skill sets required? Have they embraced open-source analytics? Are they rethinking the current limitations of enterprise resource planning (ERP) architectures and the constraints of master data management? Is there a need to retool? Learn a new technical language?

You need to be able to first define the supply chain that could be, and then identify what this means for job progression, work teams, and change management. I strongly believe that conventional training on historic functional processes is not sufficient. Driving the future requires innovation in all areas. A good place to start is with human talent.