Supply Chain Talent Management

Transcription

1 Supply Chain Talent Management in the Arabian Gulf

2 Executive summary For chemical companies in the Arabian Gulf region, demand for supply chain talent is growing rapidly, and talent supply is still catching up with this increase. To deal with this talent shortage and build a sustainable talent pool for the future companies can take action on several fronts, such as: Collaborating with local academic institutions to expand and strengthen the region s pool of supply chain talent. Creating environments for supply chain talent to succeed, by focusing on development and training, offering meaningful career paths, and working actively to retain skilled employees. 1 Recasting the supply chain to leverage talent, reducing complexity and improving processes to enable available talent to work more effectively. Aligning talent and supply chain analytics, which enables the company to predict talent needs, optimize staffing and create individualized development plans. Supply Chain with its extensions of suppliers and logistics services providers is one of the largest employers that can open huge opportunities to contain the relatively high unemployment rates in the Arabian Gulf States, especially among women. Today, the supply chain talent-related goals of governments, chemical companies and citizens in the region are aligned and companies have a real opportunity to take their talent strategies to the next level. With a comprehensive, integrated approach to building talent, companies can position themselves to attract, develop and retain the skilled people they need and leverage that talent to drive business success. 2

3 Today s supply chain talent challenges An integrated approach to talent management Around the world and across industries, supply chains are becoming more sophisticated and complex. They must handle shifting patterns, with demand growing in non-traditional areas, such as China, Latin America and Australia, and accommodate new supply sources in areas like the Middle East. And they typically involve a variety of evolving tools and technologies, and require the close coordination of in-house and partner operations. At the same time, a flexible, efficient supply chain is increasingly critical to competitiveness, because it is a key to adapting to rapidly changing business realities, and to keeping the cost of operations and products down. Indeed, research has shown that companies that exhibit strong supply chain performance typically achieve market-capitalization compound annual growth rates that are seven to 26 percentage points above their industry s average. 1 The growing sophistication and importance of supply chain operations is making skilled supply chain talent more critical than ever. But for chemical companies operating in the Arabian Gulf region, a number of factors are making it especially difficult to find that talent. Demand for supply chain talent is increasing in the region, as a growing number of chemical companies establish operations in Arabian Gulf countries. In addition, with the increased availability of shale gas, chemical companies in the region are increasing their focus on their supply chains, from feedstock to finished product delivery to customers. However, the local availability of skilled supply chain talent has not kept pace with this sudden increase in demand. In particular, the local labor pool is lacking in the newer and more-advanced skills needed in today s supply chain operations skills such as strategic sourcing; demand/ supply planning and optimization; supply and inventory planning; network modeling; and supplier relationship management. These shortages are particularly troubling because chemical companies in the region typically serve distant markets through long, complex supply chains involving a number of chokepoints making accurate planning and efficient logistics critical. Overall, analysts estimate that for the last several years, the Arabian Gulf region has been producing less than one-half of the supply-chain focused graduates it needs and a large majority of Middle East supply chain managers report that it is difficult to recruit supply chain professionals. Unlike many regions, where waves of retirements are thinning the ranks of available, experienced supply chain professionals, Arabian Gulf countries do have a relatively young population. In addition, some countries in the region have launched initiatives designed to boost the number of technical and engineering students, and even supply chain management students, in their educational programs. But with the rapid growth in demand for supply chain skills, it will take some time for these efforts to catch up and have an impact. With a local shortage of key supply chain skills, Arabian Gulf chemical companies often need to look to the global talent market. There, however, they may find shortages of supply chain talent as well, especially when it comes to mid-level experienced managers and key supply chain skills. Even when it is available, skilled expatriate talent is typically a higher-cost option. In addition, some countries are actively discouraging the use of imported talent through the implementation of morerigorous localization policies. To address these issues, chemical companies in the region need to take a more robust, comprehensive approach to supply chain talent one that integrates the various aspects of talent management, aligns talent strategies with supply chain strategies and, ultimately, business strategies. To do so, companies need to focus on several key actions: Collaborating with local institutions Creating environments for supply chain talent to succeed Recasting the supply chain to leverage talent Aligning talent and supply chain analytics Together, these factors can help companies strengthen their ability to attract, develop and retain key supply chain talent; make the best use of the talent that is available; and create a lasting talent advantage that will help them use the supply chain to drive sustainable business results and become high-performance businesses. Figure 1: Integrated approach to talent management Business strategy Workforce talent strategy Discovery attract and source talent Operating a flexible, cost-effective supply chain requires sophisticated skills and capabilities and a talented workforce that can use them. Accenture research has found that high-performance businesses those that perform well over time, independent of economic cycles devote disproportionately more time and energy than their competitors do to developing talent. Business workforce alignment Define talent needs Develop Workforce innovation talent potential Deploy talent right place right time To keep pace with today s dynamic supply chains, companies need to constantly measure workforce performance results, and use those measurements to keep talent strategies aligned to business strategies, objectives and demands. This integration of talent and business strategy can help companies proactively manage supply talent and keep it focused on delivering business results. (See Figure 1.) Workforce performance results Business results 3 4

4 Collaborating with local institutions Companies can play an active role in helping local governments and schools develop skilled supply chain talent. As mentioned, a number of Arabian Gulf countries are establishing university and vocational programs designed to help create a local supply of supply chain and other technical talent. Chemical companies can get involved in these efforts through scholarships and other forms of financing. In addition, they can provide supply chain knowledge and expertise, and offer these programs access to their own subject matter experts. Beyond supporting those programs, companies can partner with each other and/or with local governments to establish, fund and operate separate academic and training centers that focus on building local supply chain knowledge and skills. Companies also can create their own internships and other training programs to help give local talent hands-on experience. On another front, chemical companies can encourage local and global supply chain partners to recruit and train local talent, and undertake their own collaborative efforts with local academic institutions. With their significant procurement needs and large capital projects, chemical companies are in a position to influence partners ranging from engineering and IT companies to logistics-services firms to become involved in efforts to build local talent. 5 In general, Arabian Gulf countries have growing expectations for corporate involvement in the up-skilling of the local workforce, and companies may be inclined to view collaboration as a compliance- and social responsibilitydriven exercise. To a large extent, this is true and companies have a choice of being proactive about building local talent today, or being reactive and behind the curve tomorrow. In reality, however, local collaboration should be viewed as much more than a compliance issue. Building a local talent pool is the right thing to do not only from a societal perspective, but also from a business perspective. There is a tremendous amount of untapped potential talent in the Arabian Gulf region. For example, women s enrollment in tertiary education in Saudi Arabia far outnumbers enrollment by men. Yet, women make up only 16.5 percent of the nation s workforce.2 By working with local institutions and other organizations to strengthen, expand and leverage the local workforce, companies can position themselves to have a sustainable, stable talent pool in the region. In addition, as that local talent pool grows, it also can provide a valuable source of supply chain skills that can be used in chemical companies broader global operations. After all, supply chain is probably the largest employer after manufacturing in chemical companies. 6

5 Creating environments for supply chain talent to succeed The supply chain training framework In a global and agile supply chain organization, effective talent development requires new ways of leading, learning and collaborating. Companies need to think in terms of creating a complete career track for supply chain professionals that encompasses academic requirements, training and career progression. Today s supply chain professionals need to have a sophisticated understanding of logistics and planning that goes far beyond the traditional sales-oriented role of demand planning. With that in mind, supply chain operations should not be treated as a career diversion or dead end, but rather as a way to grow and advance, with a clear, structured path for moving ahead in the company. Today s supply chain operations are key to the entire order-to-cash process and central to business success. Thus, chemical companies need to think of the supply chain organization as an enabler of revenue growth and a source of competitive advantage, rather than a cost center and handle supply chain talent accordingly. The clear definition of roles at all levels of the organization, from senior leaders to the shop floor, is essential to a successful talent environment. Role clarity enables greater predictability and accountability in the execution of supply chain processes. In addition, it makes it possible to look beyond traditional skill sets in assessing talent, and instead to create accurate definitions for the competencies needed in each supply chain role. This makes it possible to build a competency framework that can be used to plan career progression for individuals. Ultimately, clarity about roles and competencies enables people to know what they must do to execute their jobs well. 7 Development of employees is also important. Chemical companies should consider customizing development and implementing a workforce-ofone approach. This approach involves segmenting the workforce based on factors, such as learning styles, values, personality and mobility, and then tailoring development opportunities to the individual. In addition, companies can offer modular learning and training choices from a list of defined and sanctioned alternatives, letting individual employees shape the training and experience they receive. Development efforts should be guided by careful workforce planning based on an analysis of future talent needs that identifies upcoming gaps in workforce skills. Chemical companies can determine future talent demand, and then develop and recruit employees to meet that demand. As part of that effort, they can route high-potential employees into accelerated development programs that help those individuals quickly grow into supply chain leadership roles. Similarly, chemical companies should have clear retention strategies in place, particularly in light of today s skill shortage in the region. Otherwise, they run the risk of finding and developing local supply chain talent, only to see it move on to competitors in the Arabian Gulf region or beyond. Supply chains typically operate in a world where markets change rapidly and to help supply chain talent keep pace, chemical companies can leverage new approaches to learning and collaboration. For example, structured learning and events can be made available on an anytime, anywhere basis, and combined with social technologies to keep content fresh and relevant. Thus, a company might capture insights from conference calls, presentations and vendors, and turn them into three- to five-minute podcasts or vodcasts that are easily accessible to mobile workers. Companies should employ blended learning that encompasses formal and informal methods, and includes instructor-led sessions, simulations, classroom workshops and online selfstudy, among other techniques. Social media, mobile applications and wikis can be effective alternatives or complements to the traditional classroom. Cross-training through job rotations or collaboration with other parts of the business and operations in other geographies should have a prominent place in the blend. When supply chain professionals have experience in areas like marketing, sales, finance and manufacturing, they are better able to understand the needs and value of those areas, and the interdependencies between the supply chain and the rest of the business. Overall, supply chain organizations should be looking to transition from standardized, HR-driven training curricula to personalized learning experiences that target the strengths, competency gaps, career goals and learning styles of individuals. This will help companies in the effort to find, develop and retain skilled talent, and to offer talented individuals a clear career path. Finally, it is important to note that supply chain leadership is the lynchpin to creating and advancing a strong talent environment. Supply chain leaders need to drive the talent vision forward with their choice of workforce-performance metrics, the learning options they sanction, and the flexibility they give employees to fit development into their daily work schedules. At the same time, leaders need to communicate the importance they place on tracking and measuring talent programs, and ensure that people are taking advantage of learning opportunities and seeking development opportunities. Figure 2: Companies can benefit from a supply chain academy framework. Leadership skills Specialty areas Common foundation Product development Companies often benefit from an academy approach to supply chain training, in which content is organized into carefully defined curricula and topic areas all of which works together in a complementary, coordinated fashion. In pursuing this kind of approach, chemical companies can use a comprehensive framework (See Figure 2.). Such a framework should include three layers of training: A common foundation of tools, techniques and processes that helps to ensure that all supply chain employees have a solid baseline of skills. Procurement and exchanges World class supply chain expertise Value creation and realization Integrated supply chain management Supply chain planning Manufacturing Transportation Warehousing Service management and customer support Inventory management Supply chain analyses tools and techniques Supply chain concepts and processes Specific specialty skills, as needed, in areas like procurement, warehousing and transportation. Leadership skills, which build on the previous two layers to help leaders manage the integrated supply chain and create value for the business. Training can often be provided through e-learning techniques, including simulations, virtual instructorled training, webcasts, case-based learning, and online, self-study courses. These electronic channels enable companies to provide both immediate, specific training, and online learning when and where it is needed. Meanwhile, classroom-based training can be used to focus on advanced and higher value-add topics. By using this type of framework, companies can help ensure that their training efforts are covering the full range of required skills, while providing consistent training and skills and a common operating language for supply chain professionals across the organization. 8

6 Recasting the supply chain to leverage talent As a rule, chemical companies in the Arabian Gulf and, indeed, around the world have an opportunity to reduce supply chain complexity, which in turn can help them make the best use of the supply chain talent they have. In addition, having a less-complex, moreadvanced supply chain can help in the effort to attract and retain key talent. Chemical companies need to take a holistic, end-to-end approach to improving the supply chain, rather than simply pursuing the tactical spot fixes sometimes associated with continuous improvement efforts. In reducing supply chain complexity, companies can target several enablers: focus; simplicity and speed; discipline; and responsiveness. Focus. This means being able to identify, pursue and measure operational and organizational improvements that are likely to have the greatest impact on business results with the least effort. Companies should create a governance structure that is charged with maintaining a constant focus on such improvements, overseeing the prioritization of improvement efforts, and targeting those that will quickly improve performance and contribute to both short-term and long-term business benefits. Simplicity and speed. This means improving operations by addressing not only the pain points of budget overruns, transport delays, etc., but also the root causes of complexity, such as inflexible processes, too many customer offerings, inefficient distribution, a lack of customer segmentation and poorly understood customer needs. 9 To drive simplicity and speed, companies need to eliminate complex activities that are neither seen nor valued and, too often, not paid for by customers. In situations where complexity is creating value in the customer s eyes, processes need to be standardized process variation is a drag on a supply chain s speed and flexibility. By removing process and organization complexities, companies can enable their workforces to be more agile and efficient. Discipline. This means keeping the organization focused on continuously reducing complexity and building execution excellence. This requires an effective performance management system that aligns metrics, targets, review cycles and corrective actions with the goals of greater simplicity and speed. It also requires supply chain leadership that can handle the multiple challenges of today s operations without allowing the organization to get distracted and off track. Responsiveness. This means reducing planning cycle times and removing barriers to flexibility. Responsiveness needs to be built into decision-making processes. That is, companies need to find ways to flex the supply chain to allow production and logistics to break their own rules in order to accommodate changes, such as a sudden increase in customer demand for a specific product, an extended outage at a key plant or a disrupted shipping route. As a starting point in these efforts, chemical companies need to carefully document their supply chain processes in a process map that shows the roles involved in those processes. 10

7 Aligning talent and supply chain analytics Analytics tools are often used to understand networking, logistical and inventory challenges, and improve processes in the supply chain. But now, these tools can be applied in a similar fashion to the workforce itself. Looking ahead, that ability is likely to help Arabian Gulf chemical companies take their talent strategies to the next level. For example, just as companies predict demand for transportation needs using statistics and robust models, some are now predicting the amount and type of talent needed to optimally staff the organization and deliver what customers want. Often, human capital analytics solutions use the same mature and proven analytic platforms that supply chain operations have used for some time. A wealth of workforce data such as turnover rates, recruiting success, willingness to recommend the company and so on is typically available for use in analyses. This data can be analyzed and combined with business data to uncover a range of insights. For example: Workforce investment analyses can help determine the impact of variables, such as work climate, employee satisfaction and retention on supply chain performance. Workforce forecasts can analyze turnover, succession planning and business-opportunity data, and identify potential shortages of key supply chain capabilities. Analytics-driven talent value models can enable companies to determine what employees value, and then create personalized performance incentives and development plans. Talent supply chain analyses can be used to support real-time decisions about talent-related demands. Overall, analytics, when applied to the workforce, can enable the supply chain organization to predict talent needs, optimize staffing to meet customer needs, create personalized performance incentives and development plans, and respond quickly to changes in the business. (See Figure 3.) It is important to note that analytics also can help companies support the enablers of focus, speed, discipline and responsiveness described earlier. For example, by analyzing performance management data, supply chain organizations can identify compensation imbalances that over- or underpay resources. A company might identify employees who are significantly overpaid (e.g., two standard deviations above their peer set) based on the outcomes and performance they drive (e.g., two standard deviations below). At one company, Accenture found almost $5 million in annual compensation costs that fell into this category costs that were not driving business results or reinforcing focus, speed and discipline. Figure 3: Analytics capabilities Competitive Advantage Optimization Predictive Modeling Workforce mix scenario modeling Build workforce optimization Recruitment optimization Constraint based optimization Optimized broadband rollout Attrition prediction Demand prediction Forecasting Demand forecasting Supply forecasting Statistical Analysis Causality/driver correlation Alerts Exception alerts Query Drilldown Efficient drill to detail Ad hoc Reports Rapid analysis Std. Reports Degree of Intelligence Rapid report development Source: Adopted from Dave Rich, Brian McCarthy, and Jeanne Harris, Getting Serious About Analytics: Better Insights, Better Outcomes,

8 Conclusion Talent is the new currency for highperformance operations, and that is especially true when it comes to the supply chain. For chemical companies in the Arabian Gulf region, that reality poses some significant challenges, due to the lack of key supply chain talent. As companies consider the actions needed to contend with that talent shortage, they need to take a critical first step developing a clear, comprehensive talent strategy for the supply chain. This strategy should spell out how the company plans to source, develop and identify talent. It should look not only at talent itself, but also the ways in which talent will be supported by culture, organizational structure and the company s operating model. And the talent strategy should be closely aligned with the overall business strategy and focused on enabling the company to build business value. Building an effective pipeline of local talent and a comprehensive talent strategy will take time but for many companies, the need for talent is urgent. For them, the key will be to find talent sources that help them bridge the gap between today and tomorrow. For example, global companies operating in the region might want to bring in teams from other regions over the short term, or establish regional centers of excellence that make it possible to leverage scarce skills across several locations. Others may want to work with an outsourcing partner that can provide advanced supply chain skills in key areas, such as planning or supplier relationship management. 13 In general, however, such efforts should be considered as steps toward achieving the longer-term goal of developing and leveraging local talent. With that in mind, work with expatriates and partners should emphasize knowledge transfer and the infusion of skills into the local workforce. Ultimately, with a reliable local supply of highly skilled supply chain talent, chemical companies will be able to move from today s scramble for talent and reliance on the expatriate workforce toward a more sustainable, steady state talent landscape. From there, they can tap into the local workforce to provide critical supply chain skills to other regions and, in a sense, make the transition from being importers of talent to exporters of talent. The Arabian Gulf region is at a turning point where the talent-related goals of governments, chemical companies and citizens as well as the demands of today s global supply chains are all aligned. Chemical companies in the region have a real opportunity to take their talent strategies to the next level. With a comprehensive, integrated approach to building talent, they can leverage the skilled talent they have, enable their supply chain professionals to work more efficiently and effectively, and position themselves to attract and retain supply chain talent coming from both local and global sources. In the end, the right approach to talent can help them use this new currency to operate the agile, efficient supply chains needed to compete. 14

9 Contributors Saleh I. Al-Shabnan Vice President, Global Supply Chain Center of Excellence Saudi Basic Industries Corporation (SABIC) Abdulwahab Al Sadoun Secretary General Gulf Petrochemicals and Chemicals Association (GPCA) Omar Boulos Country Managing Director Accenture Middle East Kenan Nouwailati Managing Director Management Consulting Accenture Middle East Steve Pearce Senior Manager Resources Operating Group Accenture Andrew Brown Senior Manager Management Consulting Accenture Darren Cairns Manager Management Consulting Accenture About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 261,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become highperformance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, Its home page is About The Gulf Petrochemicals and Chemicals Association (GPCA) The Gulf Petrochemicals and Chemicals Association (GPCA) is a dedicated and non-profit making association serving all its members with a variety of data, technical assistance and resources required by the petrochemicals and chemicals industry. GPCA s mission is singular and specific in that it intends to support the growth and sustainable development of the petrochemical and chemical industries in the Gulf in partnership with its members and stakeholders, and be both a sounding board and a meeting point for debate and discussion. It is the first such association to represent the interests of the industry in the Middle East, and it has brought a major dimension to its task by creating both a forum for discussion and a place where like-minded people can meet and share concepts and ideas. Since its inception in March 2006, the GPCA has earned an enviable reputation for steering the regional industry towards a whole new level of cooperation and raising the standard in terms of common-ground interests. Additional information is available at Notice Copyright 2013 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of Gulf Petrochemicals and Chemicals Association and Accenture. References 1 Seven Imperatives for Dynamic Supply Chains. Accenture s groundbreaking research with INSEAD in 2003 revealed companies that exhibited strong supply chain performance were rewarded with a market capitalization compounded average growth rate (CAGR) premium of seven to 26 percentage points above the industry average female-workforce-low/ Copyright 2013 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture _lc