Transforming the Supply Chain Workforce
Supply Chain workforces are transforming, with flexible models and managed services set to enhance resilience, efficiency and strategic focus.
The nature of work has changed dramatically over the past few years. With the “work from home vs in-person” debate leading the charge, both workers and companies are thinking differently about how they structure their workforce. And Supply Chain teams may not be immune from significant changes.
This poses both opportunity and risk, given how difficult it is to hire and retain staff with deep supply chain expertise and critical knowledge. Until now, most organisations have maintained supply chain departments with traditional role segmentation around the key functions of procurement, demand planning, inventory management, logistics and customer service.
These roles have usually been full-time equivalent (FTE), with a strong focus on leveraging employee skills and knowledge to maintain continuity and resilience during the highly disruptive environment of the past few years.
However, things may be changing.
We’re seeing increased demand for services that support a more streamlined department and more flexible workforce models, particularly those that are able to bring in at least some of these key functions “as a service” – without affecting performance or resilience.
Economic headwinds driving workforce change
The headline issue driving this change is the current economic environment. Company leaders who are under pressure to manage expenditure are no doubt considering how an augmented workforce model (where skills and services are brought in to manage specific projects or functions) has been deployed successfully in other parts of the organisation, and whether it can be applied successfully within Supply Chain.
When you consider the so-called ‘hidden costs’ of FTE can add as much as 40% on top of base salary (superannuation, insurance, training costs, utilities, consumable and other overheads), the case for augmented work becomes very compelling. However, cost management isn’t the only driver.
In recent years, consumer buying behaviour has significantly shifted towards a preference for ‘as a service’ or managed service models. Many of us now favour subscriptions and pay-per-use options over outright ownership in other aspects of their lives – e.g. Netflix and Spotify content streaming rather than owning physical CDs or DVDs – so why wouldn’t we expect to see similar trends in the operational workforce?
A more streamlined, strategic workforce
In making the case for managed services in Supply Chain, we are not making the case for a completely outsourced Supply Chain workforce. This would not be viable for a number of reasons. Critically, no one knows your business better than your people, and there will always be volumes of institutional knowledge that must be maintained to keep the environment running smoothly.
Rather, the better question to ask is: would your in-house Supply Chain workforce add more value in roles that were more strategic, with some of the day-to-day functions that can be carried out elsewhere removed from the FTE portfolio?
For example, an external partner with high-level Supply Chain experience could assume responsibility for some of the more transactional and/or repetitive functions (IBP process facilitation, demand management, forecast performance reporting, inventory optimisation and data transformation). This, in turn, would free up resources to move into a business analyst role – that is, using data and insights to make better decisions, and identify opportunities for change and improvement.
Meanwhile, as supply chain management becomes ever more complex, risk management is emerging as another key benefit. Increasingly, your Supply Chain workforce will need to have at least cursory knowledge of more topics (e.g. data and technology, changing consumer demands and even sustainability).
With some of these crossing over into territory outside the traditional Supply Chain skill set, managed services provided by expert partners will help to alleviate some of the inevitable expertise and knowledge gaps. The right partner will also bring invaluable, deep industry and subject matter expertise accrued over many years of collective experience.
Unlocking value from technology investments
While managed services can support Supply Chain departments at any level of operational maturity, it’s a particularly relevant discussion if you’ve invested in a best-in-breed integrated planning solution and want to unlock the value of your investment as quickly as possible.
We like to think of it as someone buying a Formula 1 car, then using it to drive themselves to the local shops and back once a week. While it may provide an initial thrill to know you’re behind the wheel of one of the fastest vehicles with four wheels on the planet, you’re not going to get the most value from your new investment unless you enlist the help of the right experts to show you how to drive and maintain it.
As always, technology is just one piece of the puzzle. People and processes matter, too.
Optimising the workforce can optimise the Supply Chain
Supply Chain workforces are poised for a transformative shift. As economic pressures mount and consumer preferences evolve, more flexible and strategic workforce models such as augmented work and managed services offer compelling benefits.
Supply Chain departments that leverage external expertise for certain functions will have greater flexibility to focus their in-house talent on strategic roles, driving innovation and improvement. Not only will this meet financial imperatives related to resource allocation; it will also ensure that supply chains remain resilient and competitive in disruptive times.
We are enablers of change and transformation in Supply Chain, Information Management, Financial Planning & Analytics, Management Consulting, Project Management, and Managed Application Services. Contact us to find out more about how we work with your teams or call 1300 841 048.
