Getting Ready for the Future

Inventory has always been the lifeblood of supply chains—and its management is about to get much more competitive. The main reason is technology, and a lot has been written on the impacts of artificial intelligence (AI), internet of things (IOT), robots, and other technologies. If inventory is the lifeblood of supply chains, labor is the nervous system. Soon a lot more is going to be written on the lack of talent skilled enough to use the technology.

The overall labor market looks positive, with low unemployment and an increase in median wage. The bad news: job creation has been concentrated in low to mid paying jobs and labor force participation is relatively low. Most relevant to supply chain managers: government statistics indicate that there's a rising skills mismatch in the labor market.

The pace of technology has outpaced the labor market's ability to train, re-train and re-educate workers. Traditional educational paths are slow to educate, unresponsive to society's needs, and leave too many students with intimidating amounts of debt. By some counts, colleges have failed to build supply chain programs at a pace that will fill even a quarter of the degree-requiring jobs of the future, prompting some companies to build in-house “universities”.

The most acute pain resides at the level of entry-level technical jobs. These are the frontlines of supply chain labor, where workers make and assemble products and services, and directly at the interface of company customer service and order fulfillment. Several leading supply chain companies such as IBM, Bosch, Ford, Barclays, Toyota, and Walmart are among the organizations studying and implementing apprenticeship programs.

Supply chain management has a strong tradition of industry working with academia, including colleges and vocational and technical schools. We are entering an era where the most successful companies will be the ones that take leadership in developing proficient and adaptable labor markets. Companies that find relationships with schools will provide the schools and students with valuable insights into needs. In return companies gain the insights of research and institutions with a longer vision so that they aren't unduly swayed by fads over genuine trends. And both companies and schools gain access to workers who want and need work useful to society.

Everyone is better off when surrounded by a healthy ecosystem populated by able and productive workers; furthermore, maximizing the value of those workers creates a healthier consumer market that forms the foundation of our economy. It does no good to implement advanced (and expensive) technology that workers cannot use properly.

Supply chain managers will enjoy profitable and efficient supply chains in proportion with their labor's ability to leverage technology. Are you getting ready for the future?

Special thanks to Prof. Edi Tebaldi for some of his economics and labor market insights.

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