An Accenture white paper written by Geoff Deines and Terry Nulty on how to re-tool and re-align your supply chain talent to meet the significant opportunities that are coming as the global economic cycle moves from recession to growth.
Globalization, Complexity, Speed, AgilityIs Your Supply Chain TalentReady for Growth?By Geoff Deines
Now that the “Great Recession” hasended, growth is once again animperative for global businesses. Becausethis growth is occurring almost entirely inemerging markets, a two-speed economyhas developed that is likely to endure forsome time to come.1 In this new era ofglobalization,2 emerging markets requiremore resources (investments, materials,commodities and talent) than mature markets,which are being asked to do more with lessand still deliver expected profitability.This disparity contributes to a hyper-competitive, complex environment of rapidlyevolving customer expectations and erodingmargins. Most supply chain workforces areunable to execute at the pace required to excelin this environment.
Why are supply chainorganizations struggling to adapt?Many companies used the downturn Putting these human capital elementsto streamline operations and become together in alignment with supplymore efficient. Some companies chain operational strategies is theinvested in new technology, capital critical action that high performers areand infrastructure; and some focused pursuing today. Witness the successon luring talent from less fortunate of supply chains at UPS, P&G, Danahercompanies. These tactics, while useful, and Reckitt Benckiser in leveragingwere typically executed in isolation and talent to outperform their peers in aoutside the context of a clear talent consistent and enduring manner.4strategy. As a result, few companiesreaped the returns they expected.Supply chains must now embrace aconstant diet of volatility and create alevel of operational excellence that willallow them to “sustain performanceno matter what is occurring in thelarger economy.”3 And while both ofthese are core operational objectives,we believe that, to excel, supply chainsmust also create a human capitalstrategy that integrates operationalperformance objectives with theorganization, talent, culture, leadershipand analytic capabilities required todrive sustainable growth and create alasting talent advantage. 3
What are the first steps increating human capital or talentadvantage in a supply chainorganization?In the current two-speed recovery, companies can create asupply chain talent advantage by aligning their operationalstrategies with an integrated human capital program focused on:Removing Creating Leveragingoperational and leadership and talent analytics to enableorganizational complexity strategies to create and predict businessto increase agility and an environment of and human capitalspeed to business results. improvement and performance to align accountability for success. supply chain operations and results.4
Figure 1: Sample benefit/effort matrixBefore Diagnostic Prioritization and Sequencing After Diagnostic Prioritization and Sequencing high high strategic and structural issuesmedium mediumBenefit Benefit complex projects with high benefits rapid improvements low low low medium high low medium high Effort EffortRemove The payoff is well worth the work: more efficient and agile organizations Enabler: Focus Focus allows companies to identify,complexity from can better respond to existing and emerging consumer demands, and pursue and measure operational and organizational improvements thatthe supply chain. the ability to execute allows supply chain organizations to maximize the are likely to have the largest impactComplexity in supply chains grows productivity of their talent. In a seller’s on business results with the leastby accretion, one process, product, market, with top talent once again in effort. Prioritizing these efforts, alongand software tool layered on top of high demand, an agile organization is a with longer-term projects with highanother. A wide range of factors in strong drawing card for attracting and returns, enables the organizationthe current global market —the global retaining key talent. to quickly improve performancedispersion of production facilities, lack and contribute to the short-termof access to commodities, increased In our work with supply chain and long-term bottom line.volatility in commodity pricing, and organizations, we see leading supply chains taking a holistic, end-to-end Figure 1 shows how a supply chainpolitical disruptions, to name a few — approach rather than the tactical team can map opportunities (projects)spurs on this increased complexity. spot fixes sometimes associated on the benefits/effort matrix. ThenRemoving complexity from the supply with continuous improvement (CI) the team prioritizes and filters thechain requires concerted will and efforts. As part of this holistic and opportunities based on the criteria andcontinual effort from all levels of the foundational approach, companies buckets the opportunities into short-organization. Such simplification is develop the organization, talent, and longer-term categories.necessary to align processes and build culture and leadership to removean operating model and organization complexity and then activate withcapable of balancing emerging “enablers” such as:5business strategies, talent strategies • Focusand available talent globally. • Simplicity and speed • Discipline 5
These high-value impact areas Enablers: Simplicity process and organization complexitiesare further solidified when create agility in their workforceorganizational structures and and Speed to deliver new outcomes in newcapabilities are aligned to these Inflexible processes, too many markets and increased customerbusiness priorities. High-performing offerings, inefficient distribution, long value (see the sidebar “Using Talentsupply chains create the structure cycle times, and poorly understood Data to Sustain Simplicity”).and decision- making practices customer needs are all root causes of(governance) that institutionalize Agility requires the alignment of complexity. To simplify, companiesthe constant focus on measurement operating metrics, targets, and need to eliminate complexities that areand operational improvements. incentives across the supply chain neither seen nor valued by customers. organization with the goal of driving And where customers value complexity,Consider the leading global retailer speed, reducing complexity and processes need to be standardized.that has integrated its supply chain eliminating waste. These enablers Process variation is a drag on anand process improvement capabilities create a cultural mindset that is enterprise’s speed and agility, like ato focus on “perfect” customer order critical to sustained results. Our weight tied to the leg of a runner.fulfillment while optimizing processes experience and research suggestsand business profitability. This focus Often, companies focus on the pain that companies that excel atarea could drive inventory costs beyond points (e.g., budget overruns, transport creating agility in their organizationsustainable levels, given the need to be delays, high employee turnover) rather through simplicity and speed doin-stock and meet customer demand. than the root causes of complexity. so because they have createdTo balance this risk, the retailer has Or they simply eliminate low-volume a culture that demands it.applied Lean Six Sigma principles products and services to streamlineto its operations while evolving its UPS is an example of a supply chain operations — all under the guise oforganization to increase usage of company that has created a culture efficiency. These approaches fail topredictive analytics. The combination of “constructive dissatisfaction”6 give companies insight into whichof Lean principles with advanced that fosters change and agility. The customers and offerings are trulyanalytics capabilities has provided a company has mastered the ability profitable and which services buildsustainable foundation to link process to reduce complexity in process flexibility and brand loyalty. Supplyimprovements, business performance execution (e.g., global delivery chains that attack and removeand organization priorities. standard practices for drivers) while6
Using Talent Data to Sustain SimplicityThe increasing need to remove complexity from supply chain operations ispresenting unique challenges related to talent. Many companies have takencosts out of their supply chains via process improvements and operational costchanges. However, leading supply chain organizations have taken an additionalstep. They use data and talent analytics to drive focus, speed, and disciplineinto their organizations — in essence, institutionalizing these enablers.By analyzing performance management data, supply chain organizationscan identify compensation imbalances that over- or underpayresources. These imbalances in pay-for-performance can severelyimpact the culture of discipline we have described here.For example, consider the value of identifying employees who aresignificantly overpaid (e.g., two standard deviations above their peer set)based on the outcomes and performance they drive (e.g., two standarddeviations below). At one company, we identified almost $5M in annualcompensation costs that fell into this category — costs that weren’tdriving business results or reinforcing focus, speed and discipline.Our belief that talent is the “new currency” for high performance furtherreinforces the need to optimize investments and expect returns onthese costs. Creating a recurring and robust capability — most likely bypartnering with HR — that uses talent data and analytic modeling isessential for high performance. This capability gives supply chain leadersanother data set to drive results and maintain organization agility.managing business complexitiesthat customers are willing to pay for cycles and corrective actions all support the achievement of those Companies need to(e.g., overnight delivery, real-time goals. Leadership serves as the critical eliminate complexitiestracking, financial services offered). conduit for sustaining this discipline. that are neitherAdditionally, supply chain leaders and Leadership focus on discipline shouldmanagers with experience in both not be underestimated. Today’s supply seen nor valuedthe production (where the productscome from) and the commercial chain leaders face multiple challenges to their efforts to maintain discipline, by customers.(where the products are going) sides such as global and diverse talent,of the business will drive the cultural complex stakeholder groups, andelements often needed to reduce the need to develop local leaders incomplexity and enable speed. This type emerging countries.of background fosters a collaborativemindset and an intuitive business Discipline in the supply chain issavvy that is essential for success in just as important when times aretoday’s global supply chain. good as in times of economic crisis. High-performing companies strive to create a leadership culture basedEnabler: Discipline on a vision of execution excellence.The discipline enabler is an essential These outcomes benefit the enterprisefoundation for the focus, simplicity (e.g., by making jobs easier orand speed enablers. Discipline less frustrating and by buildingis required to “swim against the transferrable skills) as well as improvecurrent” and continuously remove overall performance. Such a visioncomplexity out of the supply chain. celebrates the benefits of collaboratingTo do that, companies need a both inside and outside the supplyperformance management system chain organization.aligned with their strategic goalsso that the metrics, targets, review 7
Create in their talent currency curtail their capacity for success. When an organization rigorously follows competence standards, peopleEnvironments for Global and agile supply chain at all levels of the organization know what they must do to execute organizations require new waysSupply Chain Talent to lead, learn and collaborate to their jobs well. At UPS, truck drivers memorize the “340 methods,” which effectively develop their talent. Roleto Succeed clarity, from senior leaders to the shop cover everything from the most ef¬ficient way to carry keys (to avoidTalent is one of the largest investment floor, is essential. And organizations fumbling for them) to the numbercosts for a company. And talent is also need talent strategies and workforce of steps per second that would bethe means by which organizations put models that capitalize on clearly con¬sidered walking at a “brisk pace.”7tangible assets to work. Employees defined roles as well as the capability development programs to drive In addition, companies need anmanage costs, identify efficiencies, aligned supply chain leadership teamstreamline processes, manage collaborative results. composed of champions in each regioninventory and make it possible to or business. These leaders drive thedelight customers. For an increasing Role Clarity for talent vision forward through thenumber of companies, future growth Execution Excellence performance metrics they choose foris dependent on the success of these their workforce, the learning optionscostly, intangible assets. The first requirement for a successful they sanction, and the license they talent environment is role clarity at give employees to fit development intoIn fact, Accenture research and all levels of the organization. Clarity their daily work schedules.experiences suggest that talent is drives predictability and accountabilitybecoming the global currency for in the execution of supply chain Then, as part of the discipline involvedhigh performance. High-performing processes. And clarity is critical for in driving operational excellence,organizations create talent surpluses, defining required competencies. these leaders communicate theinvest in the right local talent pools, importance they place on trackingand maintain a strong global balance and measuring talent programs. Theyto hedge on future talent needs. In pose questions such as: “Are peoplecontrast, companies that under-invest taking advantage of learning or seeking development opportunities?”8
and “Are employees able to articulate Talent Strategies for a • Foster employee-definedthe skills and knowledge they have personalization (e.g., using socialgained and how they apply their Workforce of One media to create a customizedexpertise in their daily work?” Once role clarity and competence learning experience).At Accenture, our Supply Chain and expectations are defined, high While significant literature andTalent & Organization Performance performers then look for ways to research have delved into thesepractices are jointly applying these customize their talent strategies to customization approaches, the criticalprinciples of discipline internally to meet the needs of a “workforce of focus for supply chain organizationsimprove our consultants’ performance. one.” This concept has sprung from should be on partnering with HR toOur practice leaders have determined creative efforts to engage and retain define the talent needed to achievethe desired industry, business and talent in today’s hyper-competitive supply chain results. Once the talentsupply chain acumen needed to labor market. Workforce-of-one demand is defined, the approaches toeffectively serve our clients. approaches include:8 hire, develop, retain and engage the • Segment the workforce (e.g., workforce may incorporate workforce-This curriculum is then supported by of-one ideas.senior leaders teaching, measuring based on learning styles, values,and mentoring consultants on these personality, wellness profiles, Limited Brands is an example ofprinciples while also leveraging new mobility). an organization segmenting itscollaboration and learning techniques • Offer modular choices from a list of workforce to focus on specific value(e.g., knowledge portals, podcasts, defined and sanctioned alternatives potential. Limited Brands has identifiedsocial media formats). This approach (e.g., international job rotation merchants, merchandise planners,helps align metrics and performance opportunities). and allocators as critical segments.expectations with leaders who are • Define broad and simple rules (e.g., These segments make the buying andresponsible for enabling their teams to Google’s rule of spending 20% of product flow decisions to achieve theserve and deliver outcomes for clients. time on projects that create value company’s financial targets. On the for the organization). basis of that analysis, Limited Brands has created customized development and career path programs for talent segments. As a result, the company 9
has maximized the value of its supply Fostering New generations entering the workforcechain and has achieved financial and keep pace with best practicestargets while creating a talent Learning and across industries. Social media, mobileadvantage in the market.9 Collaborative Channels applications and wikis, for example, are important alternatives to theFurthermore, developing programs Rapidly changing markets and traditional classroom.that enable these talent management competitive landscapes require aapproaches supports role clarity nimble supply chain workforce — People learn best when theyand enables collaboration. A supply and a flexible learning architecture.10 understand the relevance of thechain organization that focuses on Structured learning available experience. To meet the diverse needsdriving workforce performance and anytime, anywhere, combined with and demands of a workforce thatstrengthening its talent encourages job effective use of social technologies spans three generations, supply chainrotations and movement in and out of helps keep content fresh. For organizations must transition fromtraditional supply chain roles. example, insights from conference standardized, HR-driven curricula to calls, presentations and third-party personalized learning experiencesA supply chain workforce that includes vendors can be turned into 3- to targeted to the strengths, competencyindividuals experienced in sales, 5-minute podcasts or vodcasts easily gaps, career goals and learning stylescustomer management, planning, accessible to mobile workers and of individuals.procurement, manufacturing and the uploaded within a day of the event.like is significantly more collaborative, Supply chain learning solutionsagile, and prepared for global business As with the discipline enabler, the have traditionally been foundedrealities. People who understand and learning strategy must be disseminated on competency-based coverageappreciate the value of these roles top-down and reinforced bottom-up. of supply chain functions such asas well as the expectations of each Furthermore, the learning strategy procurement, planning, forecasting,of these disciplines can better meet must draw on expertise outside the inventory management and logistics.customer demands and drive greater core competencies of the supply Filling competency gaps, however,business outcomes. chain organization. For example, is only part of the story. It is just organizations need to research and as important to identify people’s support delivery, collaboration and strengths and to find opportunities learning technologies that engage new to develop and communicate these10
Figure 2: Analytics capability12 • Workforce mix scenario modelingCompetitive Advantage Optimization • Build workforce optimization • Recruitment optimization • Constraint based optimization Predictive • Optimized broadband rollout Modeling • Attrition prediction • Demand prediction Forecasting • Demand forecasting Statistical • Supply forecasting Analysis • Causality/driver correlation Alerts Query • Exception alerts Drilldown Ad hoc • Efficient drill to detail Reports Std. Reports • Rapid analysis Degree of Intellegence • Rapid report development strengths for the benefit of the individual and of the company. For Consider the example of a major retailer addressing an issue with the Align Talent and example, having recognized experts in different areas provides opportunities on-shelf availability of four product categories. Poor communication Supply Chain for mentoring and informal assistance that are a vital complement to between the supply chain organization and its 6000 suppliers Analytics any set of formal courses. was identified as the first root The value of quantitative data in cause of the problem, and a lack of shaping decisions in the supply chain A blended learning architecture understanding of each other’s supply has been well recognized for over a supports these formal and informal chain operations was the second. decade. For example, we know that learning opportunities. A good blend higher-performing companies are includes instructor-led sessions, The retailer adopted a two-pronged five times as likely to use analytics simulations, classroom workshops, solution: Training to ensure all parties strategically, compared with low blogs, webcasts, and online self-study, were speaking the same language performers.11 These companies use to name a few. Learning opportunities and using the same processes for analytics as a differentiator by should be provided 24/7 in a variety of forecasting and satisfying demand, ensuring they have the processes, languages and draw on expertise from combined with new technologies to culture and expertise in place to gather consulting, business and academia. support timely communications and raw data, distil it into insights and use real-time decision making. As a result those insights to shape decisions and Cross-training through job rotations of this initiative, shelf availability of or collaborations with other parts of create value (see the analytics value the four product categories moved chain in Figure 2). the business should have a prominent back to acceptable levels. place in the blend. Because of the Supply chain organizations can use interdependencies between the analytics in the same way to drive supply chain and other parts of the talent performance and therefore organization, supply chain talent must improve execution and business understand how the business works as outcomes. Just as companies well as how the company’s positioning predict demand for transportation in the competitive landscape needs using statistics and robust influences the supply chain. 11
models, leading companies are now Most supply chain organizations, • Workforce investment analysis topredicting the talent needed to however, lack the analytical muscle determine the impact of variablesoptimally staff their organization and and organizational commitment to such as work climate, employeedeliver on consumer expectations. translate insights into action and satisfaction and retention on supply to integrate analysis into everyday chain performance.Leading supply chain organizations are processes. In one of our recent surveys, • Workforce forecasts to analyzemoving beyond traditional reporting fewer than one in five respondents turnover, succession planning, andand looking at emerging opportunities used a disciplined, repeatable analytical business opportunity data and fillto use talent as a critical analytic approach to inform how work gets potential shortages of key supplyopportunity. These organizations solve done and decisions are made.13 chain capabilities.business issues by using robust toolsand data models, including business As a result, execution is hampered in • Talent value model, which usesand human resource inputs, to predict every aspect of the supply chain, such analytics to determine whatsupply chain talent impacts. as sourcing, transportation, inventory employees value and then create management and talent management. personalized performance incentivesFor example, workforce skill Of these, the role of analytics in talent and development plans.segmentation can be combined management is the least recognized. • Talent supply chain, which coverswith customer demand to schedule “The best organizations see their how to make real-time decisionsservice technicians during the hours people not only as individuals but about talent-related demands.customers will most likely need their also as a rich source of collective data Human capital data and reports havespecialized skills. This type of analytics that managers can use to make better long been used in organizations.has measureable business outcomes decisions about talent.”14 For a supply Analytic solutions for human capital,that drive critical alignment of talent chain organization, the rich collective however, have only recently adoptedand supply chain metrics — customers data could cover: the rigor and analytic capabilities thatare happy, service technicians are have been traditionally used to analyzeengaged, and the company achieves • Human capital facts (head count, networking, logistical and inventoryhigher profitability. turnover, recruiting success, challenges in the supply chain. willingness to recommend the company) across unique supply chain workforces.12
High- performing organisationscouple the robust and predictive This analysis demonstrated the cultural and business performance High- performingmethods used in supply chain analytics breakdowns across regions, functions organizations couplewith the emerging trends in human and individual leaders. The CEO thencapital analytics designed to address spearheaded cultural, leadership, talent the robust andworkforce optimization, organizationalanalysis, functional diagnostics and and organization changes to create “interlock” between the supply chain predictive methodsbenchmarking capabilities. Human culture and business performance. used in supplycapital analytic solutions now use the This interlock was created throughsame mature analytic platforms that revisions to the operating model chain analyticssupply chains have used (e.g., SAS, across the enterprise and thenCognos) for some time. This analysis, creation of two new leadership with the emergingbased on consistent platforms, drivesnew insights and capabilities. competencies and expectations to address the desired business outcomes. trends in humanAs an example, a large, global Additionally, human resources capital analytics to processes were revised to sustain andconglomerate needed to address an enable these new accountabilities address workforceunderperforming healthcare business.A new supply chain function had been and expected outcomes. optimization,created to serve new regions andthe organization wasn’t executing as organizational analysis,expected. This data-driven company functional diagnosticswas searching for insights to addressthe poor performance. An organization and benchmarkingvalue analysis, based on robuststatistical models and structured capabilities.executive interviews, was used toassess the client’s culture and barriersto business outcomes. 13
Do Not Leave Value on the TableSupply chain organizations are It is important to move on all threeleaving value on the table. They are fronts in an integrated manner. Thenot growing as fast as they could and highest value to the organization isthey are missing market opportunities achieved when these three elementsbecause their supply chains are unable are focused on achieving the sameto execute successfully in what is likely outcomes in a defined time period.to be a permanent era of volatility. High-performing organizationsIn response, high-performing demonstrate an urgency to deliverorganizations are developing a streamlined operations that enableconcerted plan of action that includes new leadership and collaboration whileall three of the following initiatives: using talent analytics to sustain their performance. These high performers• Creating a simplified and “at speed” organization as well as talent also realize that the organizational strategies that create the future changes these three initiatives drive rather than sustain the past. is substantial. Thoughtful change management programs are required to• Developing new leadership, support and sustain them. In today’s learning and collaboration volatile market, in which resources are capabilities that enable the pace at a premium, companies must create a of change for supply chains. talent advantage in their supply chain• Building talent analytic models to deliver short- and long-term results. and predictive capabilities that mirror supply chain analytics and process models.About the AuthorGeoff Deines is a Senior Executivein Accenture Talent & OrganizationPerformance consulting. He hasover 15 years experience in talentmanagement and organization changemanagement across Retail, ConsumerGoods and Automotive clients. He hassupported many clients in developingtheir workforces to improve andsustain high business performance.He is currently the Global SupplyChain Workforce Practice co-lead,responsible for developing clientsolutions across all industries. Basedin Detroit, he can be reached email@example.com.The author would like to extenda special note of thanks to thefollowing Accenture colleaguesfor their contributions to thispaper: Terry Nulty, Marjorie Arnold,Irfan Rahman, Randy Boyd, MarcSotkiewicz and Ritvik Bhawan.14
Reference1 Caroline Firstbrook, “Gearing Up 6 Nunes and Breene, p. 97. 12 Adopted from Dave Rich, Brianfor the Two-Speed Global Recovery,” McCarthy, and Jeanne Harris, “GettingOutlook (October 2010). 7 Paul Nunes, Tim Breene, and David Serious About Analytics: Better Smith, “A Team You Can Count On,” Insights, Better Outcomes,” 2010.2 Accenture, “Competing in the New Outlook (January, 2011).World: The Services Imperative,” 13 Dave Rich, Brian McCarthy, andMarch 2010. 8 Drawn from David Smith and Susan Jeanne Harris, “Getting Serious About M. Cantrell, “A Workforce of One,” Analytics: Better Insights, Better3 Mark George, “Transforming Business Outlook (June 2010); Susan M. Cantrell Outcomes,” 2010.Performance through Execution and David Smith, Workforce of One:Excellence,” Harvard Duesto Business Revolutionizing Talent Management 14 Thomas H. Davenport, Jeanne HarrisReview Nº 197 - Harvard-Deusto Through Customization. and Jeremy Shapiro, “Competing onBusiness Review (enero, 2011). HBR Press, 2010 Talent Analytics,” Harvard Business Review (October 2010).4 Paul Nunes and Tim Breene, Jumping 9 Susan M. Cantrell and David Smith,the S Curve – How to Beat the Growth Workforce of One, p. 73.Cycle, Get on Top, and Stay There.Cambridge: HBR Press, 2011. 10 See Peter Cheese, Yaarit Silverstone and David Y. Smith, “Creating an Agile5 Adopted from Mark George, Organization,” Outlook (October 2009).“Transforming Business Performancethrough Execution Excellence,” 11 Thomas Davenport, Jeanne Harris,Harvard Duesto Business Review Nº and Robert Morison, Analytics197 - Harvard-Deusto Business Review at Work: Smarter Decisions,(enero, 2011). Better Results, Harvard Business School Press, January 2010. 15