Challenges Facing The Supply Chain Industry
12 Feb 2019
Marc Bentley consultant with Brightwater’s Supply Chain & Logistics division discusses the 5 main challenges facing The Supply Chain Industry today.
In January of this year, I attended the National Manufacturing & Supply Chain Conference & Exhibition in Citywest. With over 6,000 attendees from every facet of manufacturing & supply chain, there was an impressive line-up of speakers from industry, academic and government backgrounds who engaged in thought-provoking keynote addresses and debates. For anyone working in supply chain, it was an absolute “must attend” event.
The event also provided a Careers sector where people could go and talk to recruiters like myself and employers about their next move or their next hire. As a leading recruiter in supply chain, Brightwater was asked to present on the topic of talent within supply chain and even though I was well aware of the challenges facing the industry, even I was taken aback by the enthusiastic response to my presentation.
For me, the main challenge facing supply chain recruitment is the shortage of key talent. Global supply chain is a €25 trillion per year industry with the job growth predicted at 22% through to 2022. Furthermore the demand to supply ratio for jobs to qualified individuals is 6:1 and we can see that ratio stretching in certain areas. A recent study revealed that 90% of CEOS believe that they could (and should) be doing considerably more to attract supply chain talent.
So what are the issues?
For me, there are 5 main challenges:
1. Industry growing at an explosive pace
Over the past 2 decades, globalisation led to an ease of outsourcing and a rush to manufacture in multiple countries. While parts are being manufactured across the world and thereby cutting costs, this has led to a complexity within the supply chain as a result and it’s having a major effect on procurement, transportation, logistics and supply chain management. Shipments are failing to come through due to disruptions both avoidable and unforeseen. Much of this comes down to not having enough qualified people making invaluable decisions and organisations not understanding the requirements and complexities of the supply chain and the effects it has on the rest of the business. Nobody knew to plan for this eventuality so hiring decisions for this area lagged behind, creating the shortage of talent we have now and the resulting panic amongst employers.
2. Qualifications and requirements expanding
Working in supply chain means that you have to have a huge amount of knowledge across a vast array of areas. Supply chain professionals need to know customs rules and regulations, fulfilment, distribution, warehousing, transportation, consolidation and any other logistics and trade-related services. They also have to manage corporate social responsibility and understand taxation and trade barriers. They also need to be able to work long hours and in some cases, travel across the world. Certainly at senior level, supply chain professionals need to be acutely aware how their role and department affect both cost management and profitability across the organisation.
3. Education shortage
For new entrants and graduates who wish to start a career in supply chain management, training is essential. Some of the larger multinationals offer graduate programmes that are the ideal foundation to a career in supply chain. While a number of universities and third level institutes are implementing programmes, there are simply not enough courses that cater for the demands of the industry. Employers need to collaborate with universities and government to start lobbying for more education around this sector. There needs to be far more awareness around the sector as a career of choice.
However for those working in the industry already, they should do their best to realign their skillsets in accordance with market demands and requirements. Professional institutes such as the Institute of Purchasing & Materials Management and the Chartered Institute of Transport & Logistics provide excellent courses and are a great source of knowledge and support. Ideas and skills around process automation and efficiency, as well as a knowledge and capability of digital programmes and decision technology will always give an individual the edge over their competition (both from their employer’s point of view and in a career move).
4. Industry image problem
Quite a few people fall into supply chain by accident via another career, eg. engineering or business. There are very few people who make the decision especially at pre-grad or grad level to work in supply chain. Many people don’t even know what the term means. However with the growing importance of supply chain for the majority of businesses, working in supply chain requires a thorough understanding of the sector. Some perceive the industry as simply working in a warehouse, checking stock or procurement. But the sector and therefore careers within the sector can be incredibly dynamic and at the forefront of any new technology and innovation (take for example DHL’s new pharmaceutical facilities at Dublin airport). A common perception problem of supply chain careers as “lacking in excitement” has and will continue to hurt the industry’s recruitment potential unless some major work goes on behind the scenes, most likely to be undertaken by the professional bodies associated with the sector.
The dreaded “B” word has had a major impact on the supply chain & logistics world. The food and drink sector with all its inherent challenges and reliance on exports has been one of the hardest hit in the wake of Brexit and a lot of hard work has been going on behind the scenes to mitigate its impact. However it’s the potential red tape associated with Brexit that will cause problems. It will undoubtedly increase costs to businesses while those specialising in perishable foods and raw materials could be left particularly vulnerable. Ireland, as the only island member remaining in the EU, needs to optimise and innovate in order to ensure that we still have a competitive edge. The challenge remains that regardless of the outcome of Brexit, supply chain professionals really need to come up with innovative ideas that also manage cost efficiencies and business needs.
The global supply chain sector with its ever-changing landscape is growing far faster than the supply of qualified and experienced professionals. More and more companies are seeking talented individuals who have knowledge, skills and experience and who can add significant value and benefit to the supply chain department and ultimately the company. Those working in the sector have to cope with more challenges than ever before. The job requirements are changing all the time and employers need to be cognisant of that. Employers must also be more flexible on their hiring practices and at times, look internally to see what talent can be gained from other departments and work closely with colleges and professional bodies on courses that match employer requirements.
Marc Bentley is a consultant with Brightwater’s Supply Chain & Logistics division and specialises in placing supply chain & logistics professionals across a range of industries in Ireland and overseas. Contacted Marc on 01 662 1000 or email [email protected]twater.ie.