Talent management for flexible chains.

August 5th, 2015

Attracting and retaining talent is a complex task when it comes to flexible supply chains. It is crucial for companies to properly manage personnel and foster loyalty within the organization in order to be more competitive in any adverse scenario.

Mario Zavala*

Unlike other supply chains —in which the best way in which the flow of resources occurs to influence the times and forms of delivery of a good must be analyzed—, in flexible supply chains it implies operating a business in industries that by nature they depend on the changing and aggressive fluctuations of the market and that, in some cases, can even obstruct the entire value chain.

In fact, the relevance of talent management is present both in times of recession, when staff is reduced, and in times of expansion, when it is necessary to incorporate those who underpin growth.

Flexible supply chains:

• They require talent with a high capacity for thinking.
• They demand personnel capable of generating trust.
• They look for talent not only to compete, but to collaborate.

In this sense, there are three fundamental points that every professional involved in a flexible supply chain must have:

1) Interdependence. The achievement of the objectives is interrelated with the objectives of all the partners with whom it works.

2) Integrity. A strong sense of ethics makes work processes transparent and enables long-term relationships to be established.

3) Analysis. A rigorous analytical ability to report and communicate hard data, such as amounts and volumes.

It is important to mention that there are industries that characterize flexible supply chains, such as capital goods and commodities, since a high response capacity is required in the face of unpredictable changes in demand. Here are three examples:

1. a) Construction industry. There are inputs —such as ready-mix concrete— that must have flexibility because they are extremely expensive, perishable goods that are susceptible to movements in the economy.
2. b) Automotive industry. Planning is carried out based on forecasts that are fulfilled throughout the entire chain, but due to market sensitivities, regular processes could be stopped, as would occur in the case of a credit crunch.
3. c) Energy industry. It is particularly susceptible as oil prices fall, therefore the only way to stay in the market is to reduce production and, as a consequence, put pressure on demand.

Confidence Talent: A Rare Commodity

Flexible supply chains require talent that has, on the one hand, certain skills and, on the other, a high capacity for thinking. Regarding the first point, it is essential that people feel comfortable in a context of uncertainty, that they offer alternatives in extreme situations, that they are creative and innovative; Regarding the second, data mastery and effective integration of the information generated in a business are required to identify critical indicators in a timely and predictive manner.

However, talent must also clearly understand how the data provided by the market can provide decision elements in order to recognize quantifiable variables that generate algorithms for a better interpretation of demand. The foregoing causes this type of talent to be extremely scarce because it is essential to process and predict with solid bases and arguments, which permeate the entire value chain.

For flexible supply chains to function properly, personnel capable of generating trust are required, that is, building integration bridges throughout the production chain. What is sought is that all the necessary information of a business flows to make more and more precise demand estimates.

Alternatives for Mexican companies

Mexico is in a privileged position due to its demographic bonus. Rather than waiting for higher education to train people who are experts in flexible supply chains, you must be clear about how you want to compete in order to gain a better understanding of demand movements.

Currently, the leaders of Mexican companies face two alternatives: becoming big league players through mergers and acquisitions; or, perform as niche players, focusing on specialized products that ensure reliability in the rest of the links in the value chain. In both cases, the aim is to obtain a competitive advantage through the attraction and retention of the best talent.

In flexible supply chains, talent must not only be sought to compete, but more importantly, to collaborate, so it is recommended to underline the importance of developing this type of personnel and offer non-monetary compensation for retaining talent.

If these professionals work on projects that represent little challenge for them due to the unpredictable nature of the market, then possible gaps or "idle time" of the projects must be foreseen.

Likewise, it is necessary to build and strengthen loyalty towards the organization, particularly during difficult times, in order to avoid the flight and hacking of talent.

Advanced logistics planning allows for an assessment of trade-offs and assures companies of an optimized plan through which they can make better use of all assets while minimizing costs.

Francis Munoz*

Rising logistics costs, manufacturing bottlenecks, product variability, ever-changing demand, etc.; When there are so many variables and options to consider like these, it's challenging to be sure if the supply chain plan is the best one for the business.

That is why supply chain planning has gained strategic importance in companies. Good planning allows you to weigh the trade-offs and ensures an optimized plan that satisfies all constraints and makes the best use of all your assets while minimizing costs.

To the extent that companies can count on more information, more alternatives and negotiating strength, they will be able to better face the new local and global competition that threatens their position in the market. Pressure is mounting to lower supply chain costs while ensuring efficient and differentiated service levels.

 

Results of the implementation of a system for the supply chain

With the simple principle: "Do more with less", the optimization of the supply chain is based, by impacting the following aspects:

• More volume in terms of quality, productivity, profit margin, customer service, etc.
• Less cost with respect to time, resources, facilities, equipment, etc.

The selected solution should not only "cover the costs" of a plan, but use the costs of alternative options to "determine" the plan, ensuring you meet customer service objectives at a lower cost and with better use of your resources. manufacturing, distribution and inventory.

Companies that already use technology for their supply chain planning have benefited from end results that:

• They boosted manufacturing productivity up to a 30%.
• They reduced raw material costs by as much as 30%.
• They minimized finished goods inventory to 50%.
• They reduced acquisition costs to a 15%.

 

Plan smarter, faster     

The current context causes companies to look beyond the walls of their organization, evaluating not only internal resources and restrictions, but also those of their suppliers, business partners and customers to offer exceptional value, which is being demanded of them and thus grow in terms of competitiveness.

Specific technology for advanced supply chain planning allows you to define all the constraints of your supply chain (internal and external), and can help you improve your performance and profitability by optimizing the planning of manufacturing and links in the chain, solving the great challenges in all logistics processes.

Being able to tailor software to your development requirements is important, whether you need to plan across multiple sites, balance multi-product capability with profitability, consider lifespan constraints in future strategies, or choose the best recipe or product formula according to material availability and demand.

Specialized supply chain planning software can be tailored to your business needs to solve specific manufacturing and process execution challenges.

The supply chain optimization models allow to quickly determine the optimal feasible plans and scenarios of one, some or all the components of the supply chain, considering the specific restrictions of each type of industry and company.

• Optimization: maximize the use of your assets

The core of this class of system is made up of constraint-based algorithms and processing functionality that resides in memory, considers all production capabilities, transport routes and capacities, ability and work capacity, as well as alternative options for source. That means you can maximize the use of resource constraints and synchronize all production and distribution activities according to demand. This way, you can respond faster to changes.

• Scenario modeling: Evaluate and review plans

The unbeatable capabilities of supply chain planning software control special variables such as: "What if" that allow modeling and comparing the result of different strategies and budgets, such as: inventory generation, use of overtime, contracting of another factory to your company and making decisions about where to make or buy products to meet demand.

Also, you'll be able to quickly replan and react to events beyond your control (such as a missed delivery or unexpected process shutdown), plus have all the information you need to make faster, more informed decisions.

Source: Logistics Emphasis Magazine

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