In a turbulent landscape of energy crises, volatility and inflation, resilience will be a defining factor for supply chains and logistics in the coming years. Organisations need to look to the future and ensure they are considering all factors that will build resilience into their supply chain. Two of these factors will be attracting and retaining talent and the importance of organisational culture.
Drawing on research from our recent supply chain survey and working in conjunction with Professor Omera Khan, Founder and Director of OQK Associates Ltd and global thought leader in the sphere of supply chain risk management, we’ve put together a four-part series exploring the supply chain in 2024.
Talent was an important focus back in 2018 when we last conducted supply chain research. Almost three-quarters of respondents thought their workforce risk issues were going to increase in some way, and 69% put a strategy in place to tackle them. However, while it was a focus back then, it was not considered a particular challenge.
Despite the best laid plans of respondents, talent is considered to be one of the most significant challenges facing organisations today – and will continue to be so in the near future.
Additionally, workforce issues are one of the most significant risk factors currently facing the supply chain, second only to digitising processes. Interestingly, however, while digitising processes and data are currently having a serious impact on the supply chain with regards to risk, digital skills are not one of the top skills organisations are hiring for in the next two years.
Similarly, at the C-suite level – as we discovered in our Transformational Leadership research – only 18% of senior leaders think that digital skills and understanding is one of the top three skills for success. However, it rises to 31% (and becomes one of the top three) when looking at the sought-after skills for the next five years, suggesting that digital skills will be increasing in importance in the coming years. The skills valued the most highly by our supply chain respondents are transformation and change management, followed by leadership and people management, and commercial and operational awareness. This bears out what we’re seeing from our network and across our research: the supply chain, having undergone serious disruptions in recent years, is in a period of transition. Change is coming and organisations are looking to shore up their teams with experienced, transformational leaders. You can read more in our recent Transformational Leadership report.
Supply chain management is changing. Despite supply chains experiencing rapid change over the last 25 years, some predict that the scale of change in the next five years will be even greater. “Emerging technologies and new imperatives are rewriting the rules of the art of possibility”, Omera Khan states. “Everywhere you look, there are new competitive paradigms, new technologies, and new business models. And to navigate this brave new world, organizations need skilled, capable people—the best that they can find.”
Encouragingly, the results of our Transformational Leadership survey suggest that senior leaders are aware of the increasing demand for investment in skills growth. One of the top three skills required for success in the C-suite, both now and over the next five years, is identifying and building critical skills and capabilities within the organisation. This could have a profound impact on the ability of organisations to embed resilience. Building a workforce that’s skilled in multiple areas, for example, provides the kind of flexibility that means teams can be redeployed at speed in the face of significant disruption.
However, there is a concern that while leaders are aware of the need to develop the skills and competencies of their workforces, not enough is actually being done to achieve it.
“Skilled, capable people don’t grow on trees. They can’t be manufactured.”, says Omera Khan. “They can, however, be developed and ‘grown’, through a combination of education, training in specific skills and competencies, and exposure to experiences which will stretch, test, and strengthen them.”
So despite technologies growing significance, we must acknowledge that identifying, implementing and leveraging these technologies requires skills; much like with systems and leadership roles. “There is a requirement for skills in leadership and nurturing talent, as well as skills in strategy formulation and carrying out the appropriate analysis required to inform and guide those strategies”, says Omera Khan. In taking the macro view that encompasses the supply chain landscape, the needs of the organisation, the potential for risk, and more, it can be easy for companies to overlook one of the fundamentals: company culture.
Resilient organisations are ones with a culture of adaptability. The ability to adapt and evolve – anything from your workforce and operating models to your approach to business – is crucial. However, it is something that is often overlooked.
“This type of a need for change sometimes only becomes apparent when it’s too late,” says Omera Khan. “Organisations must keep an open mind about the need to future-proof their supply chains. It’s important to remember that organisational resilience isn’t about avoiding or responding to adverse events – it’s about changing before the cost of not changing becomes too great.”
This means leveraging opportunities and driving innovation to remain competitive in the face of challenging conditions, and investing in your organisational culture. In short: it means taking a long-term view, despite being beset by short-term challenges.
The vulnerabilities in today’s supply chain have come about due to a perfect storm of historical, economic and logistical factors. The push towards globalisation, just-in-time manufacturing, and centralised production have led to supply chains becoming increasingly complex.
Supply chains by their very nature are prone to shift trajectory, but the structural inflexibilities that have been developing have made it harder to see and address potential disruptions until, sometimes, it’s too late. Ultimately, constant innovation is needed to ensure the long-term viability of supply chains; positive disruption is something that can, and should, be initiated by leaders. A strategic forward-looking approach – one that aims to build resilience through a number of channels, including diversifying the supply network – will yield dividends.
Supply chain management initiatives to pursue moving forwards:
For more advice and guidance on how to future-proof your supply chain and discover the best talent, reach out to our team.
