Human Risks in Managing Supply Chain

Dr Vijay Sangam, 23:20, 05 Jul 2010

Supply Chain Management has emerged as a key lever in creating value for today’s companies as they seek to lower costs, increase asset productivity, improve lead times and customer relationships. The success of supply chain largely depends on the people who manage and operate the Supply Chains.

Today’s management faces many serious questions about how to deal with ‘people issues’ in their organizations:

What makes today’s workforce so different from years past?
Why don’t the old approaches to human resource management work now?
How to recruit the right people for the right job?
Which should take precedence: recruitment or retention—or both?
What motivates the employees?
What do employees really want from an organization?
What are the best ways to keep employees motivated and engaged?

Indeed, the challenge of building and maintaining a high-performance talent base is a tall one for many organizations, especially when you consider the enormous impact of the digital economy and the wave of technology-driven change that has followed in its wake. Yet, it is also one of the most critical topics on the minds of today’s management all around the globe.

According to one research, 80 percent of global leaders think ‘people issues’ are more important than 3 years ago, and 68 percent believe that retaining and developing existing talent has become more important than acquiring new blood. The strategic fit that a company aims, is achieved through balancing responsiveness and efficiency in its supply chain that best meets the needs of the company’s competitive strategy. To understand how a company can improve supply chain performance in terms of responsiveness and efficiency, we must examine the four enablers of supply chain:

Organizational Infrastructure;
Strategic Alliances;
Human Resources Management.

Within the Human resources management the focus areas are:

How job descriptions are designed;
How positions are filled;
How people are recognized and compensated;
How career paths are directed.

The right person for the right job

Globally, a high employee turnover rate and a tight labor market make hiring and retaining the right person for a job, crucial. It takes more than just good intuition—it requires defining, documenting and communicating what people do and how they do it.

The success of the Supply Chain mainly depends on the human resources. Ultimately, hiring the wrong person could end up costing you more than you bargained for. At the same time, people leave organizations because of gap in promise and reality with regard to job content.

Research conducted by Columbia University indicates that 73 percent of employee turnover is due to misleading job descriptions and in some cases no job descriptions at all! Gone are the days when people were hired to merely fill a void. Today, the tables have turned. Employees want to work in an environment that makes them feel good about themselves. They’re looking for direction, feedback and empowerment. If they are not supported by management and allowed to flourish in their careers both employer and employee lose.

To find the right person for the right job, but who will also fit in with the team and the organization. The two selection criteria are Eligibility and Suitability. Eligible candidates are those who have all the technical abilities and the suitable candidate is the right fit for the organization. The ideal fit would be high eligibility and high suitability. However, the surprise fit would be low eligibility and high suitability. Organizations tend to favor the second option which could be a disaster for the supply chain efficiency. We are not hiring PR professional and we need subject matter expert to take the supply chains to next level. And at the same time high eligibility and low suitability may not be a good proposition; one should aim at balanced approach.

The success of any organization will depend when individuals develop into performing teams and achieve the Business goals by transforming supply chains into value chains. More and more companies are increasingly looking for ways to boost employee performance and effectiveness in order to deliver supply chain efficiencies. People are very important component of Supply Chain Success and great care should be taken in recruiting and retaining employees who are organization’s tangible assets.

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