Mind the skills gap!

Date : 25 October 2016

With the skills gap widening each day, equipping your business with the right capabilities and expertise will be key to success in the technologically empowered supply chain. Alex Edge explores five possible routes to success.

The world in which our supply chains are operating is changing at a rate never seen before. The use and availability of data is rising exponentially each year and, coupled with the increasingly interconnected environment around us, automation is fast starting to replace the roles of humans across the globe. A recent headline from the BBC in May 2016, “Foxconn replaces 60,000 factory workers with robots”, highlights a very real and present threat to global manufacturing industries.

Skills gaps surfacing

There has been a lack of investment in developing, procuring and retaining the skills needed for the supply chains of the future, and this is beginning to have a global impact. A recent study by DHL and the University of Maryland in the US has estimated that for every six supply chain roles available, only one suitable individual for that role exists.  The UK’s Food and Drink Federation has predicted that in the UK, the recruitment gap in food and grocery will near 130,000 individuals over the next 10 years. Change is needed now.

A new skills requirement

As a result of the significant changes we are witnessing in the industry, there is a need for more individuals to work in supply chains. Some 36% of respondents from a recent IGD study said that recruiting for individuals at a senior level is very difficult. These individuals also need to possess new skillsets, such as data analytics, commercial confidence, change management and value creation, which will be the new norm in the tech-powered world of the future.

The challenge for manufacturers and retailers alike is to build and secure capability within their teams now and for the future. This will enable them to be agile in the face of the ever-changing and increasingly globalised and connected marketplace. Increasing competition for these new and emerging roles will increase competition for supply of individuals into other industries such as finance and consulting.

Routes to success

Our recent research has uncovered five strategic ‘routes to success’ that companies should consider to help address the skills shortage and skills gap. The routes are inter-linked, and businesses may choose to embark upon multiple routes in order to address the gaps in their own supply chains.

  • The Expansive route focuses on recruiting individuals with the skills required for this modern, data-driven and ‘perma-unstable’ environment. By looking for individuals with analytical and change management abilities, potentially from outside the traditional talent pool, a fresh wave of innovation could be brought in for manufacturers and retailers alike. This expansive approach would highlight some challenges, particularly around increasing competition with financial institutions and consultancies for the same individuals. Some 15% of recent graduates interviewed in an IGD study said that their current supply chain role was merely a ‘stepping stone’ to another department. This means that the food and grocery industry also needs to tackle the perception and image problem that currently exists in supply chain, in order to boost the profile of these emerging roles and allow people to understand the broad opportunities available to them.
  • The ‘job for life’ mentality is fast being eroded; this should not necessarily be seen as a negative, as churn can help bring fresh and innovative thinking to businesses. The ‘Outsourced’ route identifies options for companies to simply outsource various aspects of the business where skills gaps currently exist. In an increasingly interconnected world, with the exponential increase in the use of cloud-based systems, outsourcing data analytics tasks are now a real option for forward-thinking organisations. Simply sending raw data to third-party providers would eliminate the need to have data analysts within your own business.
  • The ‘Skilled’ route is likely the default selection for most major companies across all markets. This route looks to benchmark your current capability levels within your operation. In doing so, this allows you to identify what areas within your team need to be focused on. Once these areas are highlighted, then targeted upskilling can be rolled out across teams. This could be performed at an individual level or applied at a much broader level. With this approach, you must consider that the rate of change within the industry is increasingly rapid, and we may not know what skills will be needed in the future. As a result, equipping team members with agile skillsets to help them and your organisation cope with change will set you apart from your competitors.
  •  The ‘Engaged’ route is heavily focused around the need for collaboration when trying to attract new entrants to supply chain. Addressing this significant gap requires a joined-up approach involving governmental, educational and industry input. The engaged scenario builds upon current industry schemes such as Feeding Britain’s Future in the UK, aimed at bringing the industry together to help students and young people develop employability skills and help make them more aware of the options available within the food and grocery industry. This engaged approach is critical when trying to secure a healthy pipeline of individuals, particularly across younger generations.
  •  The ‘Innovative’ route identifies breakthrough approaches to securing and retaining supply chain talent in your organisation. Companies are increasingly looking to social media to help find talent outside the traditional talent pool. In 2014, LinkedIn completed the acquisition of start-up company bright.com. This innovative approach is a smarter alternative to merely matching keywords between CVs and job adverts. By going one step further and introducing a matching algorithm, it enables businesses to look beyond their traditional target market to secure the right talent. This has allowed breakthrough developments in sourcing of individuals for many major FMCG manufacturers. Social media engagement could also prove fruitful in helping to make the food and grocery industry a more attractive industry in which to work.

No ‘one size fits all’ approach

Change is not new. However the rate of change is fast becoming exponential, presenting enormous challenges but also great opportunities for forward-looking operations. Companies will have to innovate, either through focusing on upskilling their current teams or sourcing new talent from other industries with the relevant skills. It is clear that collaboration will be essential in this increasingly interconnected environment; pure breakthrough innovations are no longer possible without interaction between government, education and the food and grocery industry.

It may not be possible to predict what the environment will look like and what skills will be needed within it, but we can equip our supply chains with the agile and proactive skillsets they need to flourish in the future.

Keep up to date with IGD’s supply chain news and research with its free weekly bulletin at igd.com/newsletters

Alex Edge
Supply Chain Insight Manager, IGD