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A Different Solution to the Supply Chain Talent Shortage

By Jeff Bodenstab12 Jul 2016

“78% of respondents to Gartner’s most recent Chief Supply Chain Officer Survey
identify talent as the No. 1 long-term supply chain risk”

There is a lot of documented evidence of a shortage in supply chain talent. Why is it happening? Planning is becoming increasingly complex; not only due to the increasing demand and supply chain complexity, but also due to the wide range of new data sources such as channel data, retail data and even web data – nearly all of which wasn’t available years ago. John Kern, senior vice president of supply chain operations at Cisco Systems says that as companies look for the skills to build complex global supply chains, the industry “is undergoing one of the most massive talent shifts we have ever seen,” .

78% of respondents to Gartner’s most recent Chief Supply Chain Officer Survey
identify talent as the No. 1 long-term supply chain risk

So with a shortage of people able to process this deluge of new data, here is what we may be doing 

wrong. Instead of thinking about how to find and train people to fit an increasingly complex and multifaceted job, maybe we need to consider how supply chain jobs and roles might be reconfigured to fit this new reality.

For instance, companies want demand planners to be business-oriented—able to add value through market intelligence and business smarts—but also to have mathematical skills to handle the statistical aspects of forecasting. These are rare birds. Why not split the job in two? Perhaps we can redefine the position—by automating the things the computer does well, and separating out the tasks that planners excel at. This increases productivity, reduces the talent shortage, and opens up the job to people that are not as statistically inclined.

For example UK distributor RS Components stocks 500,000 products and ships almost 45,000 parcels daily from its worldwide distribution centers to more than 1 million global customers. Global supply chain planning boss Andrew Lewis is a believer in automating demand planning and replenishment with software.

Lewis wants statistical calculations to be “black box”—so his people can do business, not statistics. “For some time now, I’ve wanted to be able to separate off the creation of the statistical forecast from the enrichment of it by the demand planners,” Lewis says. “I want my demand planners to be ‘people people,’ with interpersonal skills, who can bring out from other [business] functions the sorts of things the system can’t probably know… making the eventual consensus forecast—the demand plan—absolutely as good as it can be.”

At Kronans Apotek, 310 pharmacies were managing inventory locally. Finding someone who can manage a pharmacy and has the time and skills to manage inventory optimally presented a tough challenge. So Kronans reconfigured the work to centralize the planning into three people who plan and supply 27,000 articles for the firm’s entire drugstore chain with a highly automated demand planning and replenishment system that leverages data inputs from the pharmacies. The resulting solution achieved superior results while reducing the planning workload by 24 full time equivalents (FTEs) spread over more than 300 retail stores.

Internet retailer Wayfair uses advanced software to support supply chain replenishment. According to Gartner analyst Amber Salley, planners and smart machines have become co-workers; so demand planners were able to go from the drudgery of creating forecasts to becoming “market advisors.” This approach cut their planning workload by 80%, allowing Wayfair to grow fourfold in subsequent years, while adding only minimal planner headcount.

Gartner calls this new approach “Algorithmic Supply Chain Planning”. It helps firms decode the data streams coming into the business to understand demand patterns and align the supply chain in kind. They suggest using machine learning to constantly learn—with the help of the human workforce, focused on managing and tweaking the logic that underpins the automated supply chain planning.

You’re not going to find many math whizzes with the supply chain know-how of an industry lifer. But there’s talent in the machine. And that automation not only makes supply chain processes more efficient and cost-effective; it frees time to work more closely and innovatively with suppliers. This raises the profile of planners “from tactical order processor to strategic partner in the C-Suite,” says Jim Barnes, services managing director at the Institute for Supply Management (ISM), in a Supply Chain Mattersposting.

In Preparing Skills for the Future of Supply Chain Management, Bob Ferrari says, “We have reached a point where technology can support continuous synchronized planning and execution across the extended supply chain.”

78% of respondents to Gartner’s most recent Chief Supply Chain Officer Survey
identify talent as the No. 1 long-term supply chain risk”

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