* Supply Chain Trends – just how many are there?

The Supply Chain continues to change at an ever increasing rate.  This is primarily due to the advances in technology and the availability of massive amounts of information.

To keep up with current issues and the impending changes, all those associated with the supply chain need to keep abreast of the “trends” as the saying goes, forewarned is forearmed.  But, there is a fundamental problem that any forecaster of sales, demand, usage or even the weather can tell you, it is all a calculated guess.  The ‘guesses’ get better with the more history and validated algorithms you have.

The supply chain at this level is changing so rapidly history becomes redundant and there are no algorithms.  Plus there is a plethora of opinions, some of which in reality are just a marketing tool. I wanted to see if there were overarching trends across the supply chain so did some research across a wide range of companies and organisations.

I have found there is a trend to the trends, with some particular ones floating to the top, although the individual weighting/ranking of these is hard to define. But the 15 top trends based on my research are:

  • Technology: Technology is having a major effect on the total supply chain, from cloud computing to mobile solutions and smart phones to artificial intelligence.
  • Information/Communications: The volume and types of software along with the proliferation of data has changed the way the Supply Chain is managed, even viewed.  There are better processing systems as well as automated performance reporting and even supply chain simulation software.  And because of the web, the cloud, and the number of software developers, companies of all sizes can operate with the same tools, cost is no longer the barrier it was.
  • Collaboration: This is all about collaborative relationships and closer integration between supplier-&-customer and supplier-&-supplier as well as intra-company relationships.  A common theme stated is to “build the relationship and trust between and within, companies”. This is not a “nice to have”, it is all about building strategic alliances, its importance can be shown by the number of positions now advertised with “…. Alliance Manager” within the position title (although there are a lot that are technically sales positions)
  • Outsourcing: Companies are divesting themselves of the tasks they do not excel in. We are all aware of the growth of the 3PLs over the last 20+ years but 4PLs are also now a standard business arrangement.  This trend is also obvious with call centres (on- or off-shore) as well as other back-room functions. The use of contractors is also gaining momentum.
  • Flexibility: Companies must be able to tailor their supply chains and processes to accommodate 1- increasingly demanding customer requirements 2- needs of different customer segments (or diversification of sales channels) 3- current unpredictability of the supply chain (due to market, regulatory and geographical changes/problems)
  • Sourcing: This trend had multiple options; some suggest regional and local sourcing whilst others are suggesting global sources. There is also densification of products, decentralisation of production and greater focus on Total Cost in Supplier Selection.  This area has a lot of inherent risk and all companies should be continually reviewing their sources with an eye on the risks with each.
  • Reporting and responsibility: Governments are now better able to ensure adherence to regulations and as the world grows smaller, companies must comply with an ever increasing number of regulations and requirements. Investors are also requiring better, clearer and more visibility in company reporting.
  • Environment: This is a double edged sword. There is a ground swell of customers and governments requiring companies to be more environmentally responsible.  But there is a growing need to use all available resources more effectively to contain costs for example utilising or selling waste product.
  • Strategy: Companies need to reassess their all strategies from the emergence of control towers to proliferation of product types and re-alignment of the supply chain architecture/structure. But even more critical, the Supply Chain must be acknowledged as a major strategic asset.

Once the trends are known, it is imperative companies have strategies in place to manage these trends. This will not be an easy task as each industry and each company within that industry will need to define its own appropriate strategy.

Click here,  to see a sample of the sources I used along with their own summarised list of trends. Included are Hyper-links to the relevant sites or PDFs giving a detailed perspective.

* Employees – A colleague or an asset, or both.

Over the years I have seen and heard many descriptions or labels for employees some better than others, some have been straight out disparaging.

Today I read an article by Eric Bigelow (Employees are Colleagues, not Assets).  His reference is all about the terminology, calling the employee an “asset”, where an asset is a chattel, an object that is owned).  Eric’s proposal is to have employees called colleagues, equals.  This is not to say all employees carry the same authority within an organisation, rather all employees should be treated with respect. It is from this basic assumption where everyone in an organisation will work for the success of the “team”, working towards the same goal.

Although the term “an asset” sounds pretty innocuous, it is a label and by placing a label on someone they are often treated in a certain way, especially if it is negative. Even worse the label may (and often does) affect the way the person being labelled acts in response. For example, a person labelled as “lazy”, is often treated as if they are always lazy and so attract more attention to their non-performances rather than their achievements and in turn this encourages them to behave in a lazy manner.  Whether the person actually is, or is not lazy, by labelling them as such encourages negative actions – if it really is laziness, then appropriate coaching and retraining needs to be undertaken, labels do not fix problems.

Another article I read in 2012 by Leon Kaye (Time to start valuing human capital as an asset on the balance sheet) says different, but for a different purpose.  As Leon states, employees are usually only shown as a liability on the balance sheet due to the salaries, over due leave, etc.  His argument is that more focus needs to be placed on the asset value of the Human Capital.  Now we have more terminology, Human Capital, this is not the employee rather it is their competency, knowledge and personal attributes that can add value to the company. It is this that must also be listed on the balance sheet.  But as Leon states, this will be very difficult with the current accounting standards and legal practises.

This is where we have our conundrum, how should employees be labelled, if indeed they must. Financially, they are both a liability and an asset. But this is not the person, to ensure this ‘asset’ is valued correctly on the balance sheet this same asset must feel they are part of the organisation and encouraged (even allowed) to perform at their peak and this in turn provides for not calling them an asset.

So it seems both are right, but the label must be used in the right context. When talking in a financial context, it is the skills and attributes (capital) of the employees that are assets (just as salaries and wages are liabilities).  When talking in a HR context, they should be called (not ‘labelled’) colleagues – or maybe just employees.  It is so easy to use the term indiscriminately; then again, everyone should be made aware of the meaning of the terms, including the employees.

Put simply: the employee is a person, a team member. When labelled an asset, it is their skills and abilities that are being referred to, not the person

Definitions:

Employee:  A person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business.
Human Resources: the set of individuals who make up the workforce of an organisation, business sector, or economy.
Human Capital: the stock of competencies, knowledge, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value, i.e.: the set of skills which increase the employee’s value in the marketplace.
Asset: Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, inventory, real estate, a car, and other property.
Liability: An obligation that legally binds an individual or company to settle a debt.