Four Reasons for the Supply Chain Talent Shortage, Part 1

90 percent of chief executive officers believe they should be doing more to attract supply chain talent

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“We’re like Rodney Dangerfield—we don’t get no respect.” Professor Yossi Sheffi, a professor of supply chain management at Massachusetts Institute of Technology (MIT), chuckled when I asked him why there’s such a shortage in supply chain talent. He, like a number of supply chain professionals I spoke to over the past month, was lamenting the fact that the term supply chain doesn’t do a great job of suggesting the hard, dynamic work involved in running the manufacturing, movement and storage of a product. And while the reputation problem can hurt pride, it can also affect businesses in a much more tangible way: Companies across the globe are sinking millions of dollars into their supply chains each year—and there simply aren’t enough qualified people to make sure that investment goes as far as possible.

A recent study by the University of Tennessee, Knoxville, revealed through surveys of companies that 90 percent of CEOs believe they should be doing more to attract supply chain talent. In a similar Deloitte survey, only 38 percent of executives interviewed were extremely or very confident that their organizations possess the competencies needed to deal with today’s supply chain issues.

That’s a huge problem. The global supply chain is a $26 trillion per year industry and it’s only getting more complicated. Between 2010 and 2020, the number of available jobs in supply chain will grow by 26 percent. Currently, the demand-to-supply ratio of jobs to qualified individuals is six to one. In a few years, that could be as high as nine to one. Most of the openings exist in middle management positions, in which there is a current shortage of 54 percent.

What is it about the supply chain industry that led to such a dearth of qualified professionals? Part of it comes down to the rapidly changing global landscape and a lot of it comes down to image. We looked at research and talked to leading supply chain professors to try to get to the bottom of the problem—and come up with a few solutions.

Four Reasons for the Shortage

We consulted industry leaders and publications like DHL’s whitepaper to give our own take on the reasons for the shortage.

1. The Industry Is Expanding Faster than Workers Are Becoming Qualified

Over the past two decades, globalization led to an ease of outsourcing and a rush to manufacture in multiple countries. Parts are being manufactured across the world from each other, cutting costs, but at the same time, increasing complexity. In the past, managing a supply chain just wasn’t as hectic.

“Inventory was cheap—it wasn’t a consideration,” said Sheffi. But in the last five to 10 years, we saw a sea change in the way people view procurement, transportation and supply chain management. Suddenly, companies are losing money as their shipments fall prey to disruptions both unforeseen and avoidable—and much of it comes down to not having enough qualified people making invaluable decisions. “There’s now a decades-long lag. As good as MIT is, we can’t give anybody 30 years of experience,” said Sheffi. Most of the people I talked to agreed that, 20 years ago, those who wanted to make money went into marketing or finance—never procurement. Now it’s a hugely important industry, but no one has the necessary experience.

2. The Qualifications Needed for Supply Chain Careers Are Expanding

David Closs, a professor of supply chain management at MSU, believes that one big issue behind the talent shortage is the amount of talent required from each individual. “If you’re in procurement, you’d better be good at procurement. But these days, it also means you have to manage corporate social responsibility, and understand political issues like trade, taxation and customs. It becomes much more complex. I believe this to be the case partly because of our education system and partly because the world has changed.”

It’s a tough but important issue to face: People who work in supply chains today need to be dynamic. They need to be able to work long hours, to travel across the world. It’s a demanding field that—unfortunately—doesn’t carry the same prestige as equally taxing careers. It’s not enough for someone to understand logistics. They have to be able to be politicians, managers, designers as well, if they want their companies to truly benefit from their manufacturing and transportation process.

3. There’s an Education Shortage and Companies Have Trouble Gauging a Good Supply Chain Mind

According to the DHL report, the number of full-time business faculty in supply chain management and logistics was “consistently below 1.3 percent of all-field business faculty both in the United States and worldwide” over the past few years. Hau Lee, a professor of supply chain management at Stanford, said that there “just aren’t that many universities finding the number of people needed” to fill supply chain positions. While a number of universities are implementing programs to increase interest and encourage students to choose a career—more on that later—it’s hard to pump out enough graduates who are prepared for such a demanding job.

On the other side of things, many companies don’t accept the versatility inherent in supply chain jobs. Professor Lee gave the example of someone in procurement who might help change the way a prototype is designed and produced. That’s not old-school procurement, sure—but it would greatly affect manufacturing and help the company, so upper-level managers should be aware that a supply chain manager might do a lot for another department—but it all comes back to the supply chain.

4. Supply Chain Has an Image Problem

Everyone I talked to always returned to this point. Richard Wilding, a professor of supply chain management at the University of Cranfield, UK, said that most people he knows just “stumbled into supply chain” from engineering or business. Very few people actually make the decision—especially at a college level—to study the world of supply chain. Many people don’t even know what the term means. And until recently, that wasn’t a huge problem. But now, working in the global supply chain necessitates a thorough understanding of how it works—meaning that it may become harder for professionals to fall into that career path.

It’s time for the industry to accept that supply chain doesn’t have the best connotation. While the career itself is dynamic, demanding and an integral part of any company, most people would say it sounds pretty boring. Why the huge disparity? Partly because of the changing global environment and partly because efforts to change that perception are also pretty new. But many people I talked to believe that a shift in connotation can stem from a clearer understanding of what supply chain professionals do and lead to a big increase in supply chain talent.

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