Talent Gap: How Did We Get Here?
How did we get here? By "here" I mean the supply chain talent gap that many companies are struggling to fill. In "Talent Gap: Where Are We Going?", the editor lauds the 30 Under 30 Rising Supply Chain Stars who represent the bright future of our practice. But, as you'll see in the chart at the bottom of 30 Under 30: Rising Supply Chain Stars, 83 percent of these Rising Stars did not select supply chain management (SCM) as a career. Why not? Certain events created a demand, and a concurrent lack of supply of needed logistics professionals. Let's take a look back and see.
The 30 young professionals profiled in this issue were not even born when Inbound Logistics began in 1981. Then-President Carter pronounced a malaise had taken hold of our economy: stagflation—negative economic "growth" coupled with runaway inflation (mortgage rates topped out at 18.5 percent).
The U.S. manufacturing sector was hard hit by this malaise. Back then, U.S. business was organized in a strictly hierarchical way, structured and managed from the top down and arranged in functional silos. Each function—purchasing, transportation, operations, and finance—was mostly limited to optimizing and managing its own internal processes. Traffic secured the best transport rates, and purchasing negotiated the best unit cost, usually without advance coordination or input from sales, customer service, or warehousing. Cross-functional cooperation was a rarity, and strategic cooperation across functions did not exist for many enterprises. Business professionals managed transportation, not logistics. The link between demand signals and supply, if it existed, was tenuous. The term supply chain management did not exist either.
Don't get me wrong. This structure grew organically from the dawn of our industrial age, and most companies were run well and produced astounding economic gains and job growth.
But U.S. business began to be challenged by a new kind of offshore competitor—emerging markets that, in most cases, paid labor rates one-tenth of what U.S. workers were paid. The emergence of these economies created a looming competitive blind spot. Businesses were driven to look for hidden efficiencies to survive; cutting logistics costs was an obvious place to start.
But cutting logistics costs alone could not do the job. To be a true global competitor, inventory must flow fast, and with reduced touches. That can only be done with strategic change. When purchasing, transport, and logistics functions work in tandem instead of in silos, enterprise operations are optimized. Demand-driven logistics rapidly evolved into supply chain management, which created a demand for a new type of professional: supply chain manager. Demand, more.
This was also the beginning of a trend where high schools, colleges, and universities de-emphasized the importance of gray collar or practical discipline careers, encouraging less-technical career paths. This career guidance policy would choke the supply of skilled transportation professionals precisely when demand spiked sharply up. That misalignment helped create the talent gap in SCM and other technical professions. Thankfully, that trend has been reversed, with high schools, associate colleges, and universities all now encouraging a career path in supply chain management. Supply, more.
That brings us to today. To sustain our success, we need a new crop of young supply chain management stars to continue driving excellence in the practice. Yes, we've come a long way, but there is still more to do.