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MIT Center for Transportation & Logistics

MIT CTL WHITE PAPER

ARE YOU PREPARED FOR THE SUPPLY CHAIN TALENT CRISIS?
BY KEN COTTRILL
GLOBAL COMMUNICATIONS CONSULTANT MIT CENTER FOR TRANSPORTATION & LOGISTICS

ABSTRACT: Supply chain faces a severe shortage of talent at a time when the demands on the profession have never been greater. Globalization, market uncertainty, shifting demographicpatterns, and the emergence of supply chain as a strategic function are some of the factors that are driving the skills shortfall. The industry can build an adequate supply of talent in a number of ways, but companies must be more proactive in their approach to recruiting, developing, and retaining the supply chain professionals they need to stay competitive.

FALL 2010

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We have picked upan amazing amount of talent in the last 18 months. So many companies have cut back and seem to be doing it without regard to people’s abilities.

Amid one of the deepest recessions ever to hit the United States and with the official unemployment rate approaching 10%, companies should have little difficulty retaining key employees. Why then are supply chain leaders citing talent recruitment andretention as one of their top concerns in 2010 and beyond? We think the Great Recession is partly to blame. The scarcity of job openings caused by the downturn can, paradoxically, engender a false sense of security when it comes to keeping valued employees. Many individuals who show no outward inclination of wanting to change jobs are polishing their résumés and LinkedIn profiles in readiness forthe economic turnaround. Moreover, survivors of the downturn have had to learn how to achieve more with less; these skills make them even more attractive to enterprises intent on luring talent with improved compensation packages and appealing career prospects. In addition, shedding staff when the economic chips are down will come back to haunt some enterprises. Cutting too deeply not only hurts acompany’s reputation as an employer, but also benefits organizations that are savvy enough to recognize an opportunity to recruit premium talent. “We have picked up an amazing amount of talent in the last 18 months. So many companies have cut back and seem to be doing it without regard to people’s abilities,” says the CEO of a third-party logistics services provider (3PL). Supply chain leaders areaware of these recessionary dynamics and fear an exodus of top talent over the next few quarters as the focus shifts to market growth. In addition to these short-term effects, longer-term structural changes are driving the talent shortfall in supply chain. Demographic shifts, such as the loss of experienced personnel as the baby-boom generation retires, are changing workforce profiles.Globalization and increasing market volatility require specific types of business management skills. Supply chain is also grappling with some unique demands. In addition to its role as a bridging function that interacts with other corporate disciplines, the profession is becoming more involved in strategic decision making. Moreover, its global connectivity in areas such as inventory positioning and supplierrelationship management distinguishes supply chain from other departments. These challenges require a mix of capabilities that is hard to find, but companies need to fill these skills gaps in order to remain competitive. “The sort of things we were valuing and underlining as being important and what we were rewarding people for are different today compared to just five years ago,” says a seniorsupply chain executive at a global apparel company. The net result is a “talent tsunami” that could hit the industry in the next few years. What can firms do now to avoid such a crisis and lay the foundation for an efficient talent pipeline? MIT CTL is investigating the causes of the talent shortage crisis and possible solutions. This white paper, which is based on our preliminary research,...