Talent Drought Threatening Today's Supply Chains

A disconnect exists between top leadership and supply chain executives when assessing supply chain talent

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New YorkMay 28, 2015—The heart of a global business is always the operations by which it buys, makes and moves what it sells to customers. Yet only 45 percent of supply chain and 40 percent of procurement executives at U.S.-based global companies said that they are extremely or very confident that their supply chain organizations have the competencies they need today, according to the newly released 2015 Supply Chain Survey from Deloitte.

The survey also found wide disparities between these supply chain executives and top company leadership when it comes to assessing their supply chain's talent. In sharp contrast with the supply chain and procurement executives, more than three-fourths (77 percent) of CEOs and presidents said that they are extremely or very confident their supply chain organizations have the required competencies needed for today.

More than half (54 percent) of the CEOs and presidents also said that their supply chain organizations receive excellent or very good support from their human resources department, compared to only about a quarter (24 percent) for all other executives.

"Today's global economy demands a networked and efficient supply chain," said Kelly Marchese, principal, Deloitte Consulting LLP, and supply chain strategy leader. "The disparities in viewpoints that exist between company leaders and supply chain professionals could materialize into actual barriers to success, particularly as companies try to evolve their supply chains through new technologies and operating model changes. Approaches to talent management must evolve with supply chains to ensure today's workers can meet tomorrow's challenges. That can only occur if executives at every level are informed and in agreement when it comes to their talent needs."

Skills Development Crucial

On average, less than half (45 percent) of all executives rated their employees as excellent or very good on seven leadership and professional competencies, such as strategic thinking and problem solving, the ability to manage global or virtual teams, and the ability to effectively persuade and communicate. At the same time, an average of about two-thirds (65 percent) of executives said that these competencies will become more important to their supply chain during the next five years, creating a talent gap that could have serious implications for companies and their customers.

"Companies increasingly must extend their supply chain's talent base beyond technical skills to bring more leadership and professional skills into more levels," Marchese said. "This has the potential to empower and inspire employees at all levels to support constant innovation in fast-moving industries, and generate new forms of leadership that can help create more engaged and effective supply chains."

Retention over Recruitment

The survey also found recruiting new talent is seen as a greater challenge than retaining existing talent, especially at higher levels, suggesting that building skills internally is becoming increasingly important. About two-thirds of executives said that recruiting senior leadership for the director and senior director level is difficult, while less than half said that retention is difficult.

The Emergence of Value Webs

The 2015 Supply Chain Survey comes on the heels of the recently released business trends report, entitled Business Ecosystems Come of Age, from Deloitte. The report is a collection of nine articles that explore the ways businesses can thrive in the new world of ecosystems. In an article called "From Supply Chains to Value Webs," Marchese discusses the greater complexity facing supply chain managers, and the new challenges they face as linear supply chains evolve into value webs or ecosystems of suppliers.

"Having already mastered a profound shift from ownership to control of many assets, supply chain leaders will need new capabilities to also secure influence over and access to externally located resources, underpinned by increasingly organic, web-like arrangements," Marchese said.

Survey Methodology

Deloitte commissioned Bayer Consulting, a market research company, to conduct the online survey of 400 executives from U.S. companies in November 2014. Participating companies were required to have global operations, with one or more of the following entities located outside the U.S.: customers, operations or third-party service providers. This is the third consecutive year Deloitte conducted the survey.

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