In our blog we would like to keep you updated about our progress as well as provide wrap-ups of recently published articles addressing our research topic.
After being invited to publish findings of your WIMOSC? research project in the international Supply Chain Management Review (SCMR), we were also able to present our results to a German readership.
Logistik Heute, a popular magazine for logistics specialist in Germany, published two articles in consecutive editions in December 2014 and January 2015. The majority of the discussed content was translated from our English article in SCMR. Please find below the references of our articles. The first article can been accessed online for subscribers of Logistik Heute under this link.
Karriere: Quereinsteiger für das Supply Chain Management, Logistik Heute, 2014, Vol. 12, pp. 20-21 (Prof. Dr. Kai Hoberg, Christoph Flöthmann, Dr. Knut Alicke).
Karriere: Tipps für den Weg nach oben, Logistik Heute, 2015, Vol. 1-2, pp. 22-23 (Prof. Dr. Kai Hoberg, Christoph Flöthmann, Dr. Knut Alicke).
We are very pleased to announce that research findings of our project "Who is managing our Supply Chains?" have been published in the current issue of the renowned Supply Chain Management Review.
In our article "The DNA of Supply Chain Executives" we discuss the educational background of supply chain, logistics and sourcing personnel. We find that a significant higher percentage of supply chain personnel hold university degrees compared to peers from logistics and sourcing. Furthermore, the percentage of university degrees has increased over time in all three disciplines. While only 33% of the 60+ years old supply chain managers hold a degree, 84% of the 25-29 years old do.
Within the article, we also discuss job transitions between SCM and other functions. As shown in a previous post in our blog, we investigate the career paths of 300+ supply chain executives and find six prevailing career patterns among them.
Our article concludes with interesting career advices obtained from interviews with 20+ successful supply chain executives.
The article can be purchased on the SCMR website
Another large-scale survey by "SCM World" has highlighted that the talent drought in SCM is "worse than ever".
In his recent blog posts, Kevin O'Marah, Chief Content Officer, discusses the steady itensification of high-level business leaders' concerns regarding a shortage in talent management.
SCM World surveyed hundreds of managers since 2011 and asked "how has the acquisition and development of supply chain talent changed over the last two years?".
While in 2011 only 22% indicated that is has become "more difficult", it is the case for 42% in 2014.
The study also digs into the root causes of the manager's perception. A top of the challenge list sits "finding talent" and also "hiring talent".
The full article can be accessed here.
Kühne Logistics University demonstrated its strong research focus at the POMS International Conference 2014 (POMS/Production and Operations Management Society) in Singapore – and was the European university with the highest attendance.
The conference was held from July 21-23 at the Marina Bay Sands Convention Center and featured one of the strongest line-ups of researchers belonging to the OM/SCM community.
I had the honor to present the results of our paper “Career Patterns of Supply Chain Executives: An Optimal Matching Analysis.” As mentioned in the blog post of January 7th, 2014, we leveraged social network data to identify six common career paths that differ in career slope, previous functional experience, and educational background.
The acceptance of our paper to be presented at this high-class conference gives us further motivation and support to pursue this practice-relevant research project.
The highly popular SCM blog SupplyChainShaman.com recently conducted a survey about SC talent management in companies. One output of this study was a "SC Talent Problems Matrix", featuring the severest challenges today and the predicted challenges in five years.
Herby, the top ongoing problems are
The top problems, however, are changing. According to the respondents, the emerging top talent challenges are
Blogger, Lora Cecere, Founder and CEO of Supply Chain Insights, also provides a interesting case study from her practical experience on how those problems can be solved.
Recently, we have conducted semi-structured telephone interviews with 20 successful supply chain executives from Germany, Austria, and Switzerland. Our goal was to generate further, "soft" insights on their careers and complement the findings from the quantitative analysis of the professional CVs (see previous blog post). We gained knowledge about their motivation, reasons for job changes and their personal success factors for their career progression. Based on those interviews we are able to summarize the comments into six general career recommendations which could be relevant to you:
Show the value provided by SCM to the firm: It has always been difficult for SC managers to articulate the value the function is providing to the firm. Many SC managers are experts in their field or in managing people. However, they are not great in communicating their requirements and successes to other functions. To advance the ladder SCM should be able to clearly highlight his successes.
Be ready and take advantage of sudden opportunities: It is unrealistic to define long-term and specific career goals. Based on our findings, opportunities often appear on short-notice and one has to be ready and willing to take advantage of that and accept invitations to take over new positions.
Follow your interests: Almost all interviewees – everyone being equipped with a successful career – state that their main motivation always has been the interest and fun in the job and its inherent assignments. Many have turned down job offers with higher salaries because they wanted to keep their diversified SCM job – only if you like your tasks, you will succeed.
Know your strengths and weaknesses – and make weaknesses your strengths: Several interviewees mentioned that reflection and awareness of their strengths and weaknesses were key factors for their success. Knowing your weaknesses can even be a starting point for morphing them into strengths. One interviewee mentioned that he could barely speak English after high-school. He overcame this weakness by enrolling in a British university for his undergraduate studies.
Find a mentor – even if there is no official mentoring program: Many interviewees mentioned that their career path and success were subject to some external influence, e.g. luck, coincidence or a mentor. Since nobody is able to influence luck or coincidence, one should try to find an experience leader as mentor, who gives valuable advices and opens doors for promotions. Many interviewees state that they even climbed up the career ladder in the slipstream of their mentor by taking over his position in case of the mentor’s promotion.
Know your firm’s expectations on their executives candidates: E.g., some companies demand extensive experience abroad without mentioning it officially. This means, you should gain knowledge of your superiors’ career paths. If all of them have been abroad for 2 or more years, you have to do the math and try to apply for an expatriate position yourself.
In our recent study "Career Patterns of SC Executives: An Optimal Matching Analysis" we analyze 307 resumes of SC Executives – gathered from Germany’s leading social network for business professionals XING.
Despite the individual character of careers we find evidence for common career paths, i.e. career patterns, which differ particularly in previous functional experience gained.
When considering the total business experience of supply chain executives, our results indicate that SC executives spend the largest portions of their prior careers in the two closest functions, i.e., logistics and procurement. Sales/marketing follows on the third position whereas prior work in SCM position only ranks on place four. That means, on average, SC executives gained much more experience in other functions than in SCM. Moreover, we identify six different career patterns among SC executives. The main driver for the distinction hereby is in which functions they worked before and for how long. Nevertheless, the patterns also differ significantly in other underlying characteristics, such as the length of the tenure until the first SC executive positions, field of studies or highest degrees. We find evidence that companies are open to recruit executives from other functions and appoint them as head of SCM. However, "SCM devotees", which launched their career in SCM, usually advance faster to the department head, as do former consultants.
In our subsequent analysis we rank the careers by their tenure required to advance to an SC executive position and we identify significant differences in previous functions, industry affiliation, total business experience, previous executive experience, field of studies and highest degree.
For more detailed findings, and background on research methodologies applied, please click here to download the research report.
"Talent shortfalls in one of the key challenges in the near future!"
This is an insight of the large-scale study "2013 Trends in Logistics and Supply Chain Management" conducted by the "Bundesvereinigung Logistik" (BVL). The BVL is a network of over 10.000 Logistics and SCM executives worldwide and has conducted surveys for more than 20 years.
The researches were able to collect 1.757 responses in an international survey among supply chain executives. Talent shortfalls were mentioned by 70% of respondents across all regions and sectors. Shortages are especially experienced for skilled labor force and supply chain planners. Reasons for that are manifold and differ between regions.
While Europe is suffering the demographic change, i.e. a small cohort of young people, supply chain departments in emerging economies are challenged by war for talent with other functions like finance and marketing.
However, as mentioned in our blog before, not only recruiting but also retaining and developing talents remains crucial. The respondents indicate that they are also aware of that.
Alexandra Müller, WIMOSC Research Team member at the KLU, recently conducted a survey among supply chain managers entitled "Motivating Supply Chain Behavior – Designing the right Incentive System".
The goal of this survey was to gather information on SC incentive systems in place in small, medium and multinational companies located in Germany, Austria and Switzerland and expose their strengths and weaknesses.
A link to an online questionnaire was emailed to 1500 supply chain managers and managers from related functions. 347 of them obtained insightful responses. These responses generated a total of 1815 measles vaccinations, which the KLU donated to "SOS Kinderdörfer".
The three key research questions were:
The responses were manifold – while many participants highlighted satisfaction with their incentive systems, others indicated room for improvement.
A general opinion was, that incentive systems pay off: they do not promote conflicts, increase the motivation of the employee and thus his performance, encourage people to act in companies’ interests, KPIs are long-term oriented and the right ones for individual functions.
However, others responded that top-level managers need to acknowledge incentive misalignment across different functions which lead to different satisfaction levels along the hierarchy.
In case you have further interest on that topic, click here to download to the 22-page in-depth report.
Yet another interesting study regarding Supply Chain Talent Management was issued in late 2012, this time by Supply Chain Insights LLC. Lora Cecere, Founder & CEO, conducted a survey among sixty companies. The goal of the study was to understand the current state of supply chain talent related to hiring, recruiting and training practices.
One particularly interesting finding - among many - was that the key problems in managing the SC talent are likely to shift within the next five years. While companies struggle today with "reluctance to embrace new ways" and "lack of clear career paths", filling the gap left by retiring senior supply chain managers will emerge as the major challenge soon. This means that HR departments will rather spend time for headhunting experienced managers for the middle- or upper-management echelons than for finding and hiring fresh graduates from universities.
The full report is accessible here
"Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory."
This truthful quote of industry-pioneer Andrew Carnegie is the introduction to an article published in this month's edition of the Supply Chain Management Review (SCMR). The article contributes to the subject of supply chain talent development which is also a main topic of KLU & McKinsey's joint-research project. Author Mark Trowbridge, a well-experienced principal consultant for strategic SCM and procurement solutions, describes some innovative techniques used by successful SCM leaders to recruit, motivate and retain top talents. Besides discussing several factors constituting the recent talent shortage, he also highlights a valuable "sample report card for supply management skills diagnostic" which enables companies to assess staff competencies. If you are interested in this particular theme, the article is definitely worth reading.
A recently published a comprehensive report named "DNA of the COO" which deals with insights on the persons behind the role of the COO, their skills, experiences, relationships and mindsets.
The report is based on data which was gathered by surveying 300 COOs and 40 other C-suite members of international countries from different countries and industries.
The study comes to the conclusion that the impact of the COOs will grow over the next years given the increasing competition caused by the globalization and stagnating economy.
Interestingly, the study also reveals that COOs seem to be the most ambiguous board members and possess the best combination of deep operational knowledge and strategic insights to become the next CEO (compared to CFO and CIO which were investigated in previous E&Y studies).
Asked for the top challenges they were faced in the last five years, the COO’s top answers were "increasing complexity, wider set of tasks", "increasing pressure on efficiency" and "growing strategic influence on the business model".
The report and the effort of E&Y invested in it, support our perception of increasing influence and importance of operations and supply chain management and motivate us even more to pursue our own research project.
Careers of supply chain managers are not always straight – often managers change positions or even companies to advance their careers. The question "Should I stay our should I go?" is not only a famous song of the rock band The Clash but also the title of a recent article published in the journal "Supply Chain Quarterly" of the "Council of Supply Chain Management Professionals" (CSCMP). In the article, Timothy Stratman – an experienced executive coach – deals with seven considerations and recommendations for a sophisticated decision whether you should stay with your current company or switch to another one.
His seven-rule lists features:
Stratman also provides six etiquettes in case you decided to leave your company. Since any supply chain manager might face this decision during his career, this article is definitely worth to read.
The online job board StepStone recently conducted an online survey on salary levels in Germany. Over 40.000 employees participated, 33% of them being "managers", i.e. employees with staff responsibility. Large German newspapers like Handelsblatt, Welt, Süddeutsche, Spiegel quoted the study prominently.
Within the study, StepStone distinguished between procurement, logistics and supply chain management functions, an approach (unfortunately) not very common in German-speaking countries. SC managers salaries are among the highest among all managers with staff responsibility.
In addition, huge gaps in salaries between SCM and logistics functions were exposed. While SC managers with staff responsibility and variable bonus payments in average pocket 78.306 Euro annually, logistics managers within the same category receive 43.685 Euro only (-44%). In our opinion, this gap is subject to different requirements demanded from the employees and the influence of their decisions. While many logistics managers are responsible for a small team within a warehouse, SC managers work more strategically and make key-decisions (e.g. make-or-buy) which might drive the company, its suppliers and customers for years.
For further information you can find the link to the full report below. Click here to download our comparison slide.
Ken Cottrill & James B. Rice of the MIT Center for Transportation & Logistics recently presented a new white paper regarding one main issue for the shortage of SC talents: the disconnect to the HR department.
Ken Cottrill was also the author of the widley discussed paper “Are you prepared for the supply chain crisis?” in 2010 when he addressed the upcoming shortage of SC talent for the first time. Within his new paper “Supply Chain Talent Managament: Adressing the HR disconnect” the authors blame the lack of communication and collaboration between the SCM & HR department as catalyst for the insufficient supply of talents. On the one hand, the SCM often views the HR department as bureaucratic help-function and barely discusses recent issues and requirements. On the other hand, HR doesn’t view SCM as a key-function in the company either – and thus does not strive for closer collaboration or knowledge exchange. Within their paper, Cottrill and Rice mention several approaches for closing the gap between both departments. One of these is to provide contemporary supply chain trainings for the HR professionals.
A better understanding of the day-to-day tasks and required skills of SC personnel enables the recruiters to make more sophisticated decisions when selecting employees from several applicants.
An interesting study of the California State University recently revealed major changes and trends in SCM requirements. The researchers Zinovy Radovilsky and Vishwanath Hegde hereby pursued a very creative research approach: They collected online job advertisement from various online platforms of the years 2009-2011 and compared them with similar job postings from 2004-2006.
Several difference in those job advertisments were exposed. These differences indicate changes in requirments of SC managers (e.g. expertise, soft-skills, IT knowledge) since one can expect that companies understand best which skills are crucial for a satisfying performance. The Top 3 "hot topics" mentioned in the recent advertisments were "Global Supply Chain Issues", "Inventory and Materials Management" and "Sourcing, Procurement and Supplier Management".