The Future of Supply Chains Falls to Younger Workers and Robots

Stephen DeAngelis

May 14, 2019

By any measure, today’s supply chains are remarkable accomplishments. They often span the globe and, despite often requiring hundreds of transactions, shipments move through the supply chain keeping store shelves stocked and consumers happy. Supply chains have been around since the earliest human settlements began trading goods. Each succeeding generation of supply chain professionals builds on the hard work and wisdom of professionals in preceding generations. Teresa Chiykowski, Senior Content Marketing Manager at Kinaxis, observes, “Today’s supply chains are the result of what we’ve done in the past; tomorrow’s supply chain will be the result of what we’re doing today.”[1] One may well ask, “What about the future?” Many supply chain managers are openly wondering where they are going to find the next generation of supply chain professionals. Chiykowski asks, “How confident are firms that they’ll have this workforce at the ready?” Her answer, “Not very. In Deloitte’s 2015 Supply Chain survey of 400 executives, only 38% of respondents say they have the competencies they need today. And that doesn’t even consider the future.” Rich Weissman insists, “The shortage of labor in the United States is hurting companies from coast to coast and the performance of your supply chain is at risk.”[2] More alarmingly, he predicts, “Labor shortages will only get worse, and supply chain managers need to address these issues head on.”

The need for a new supply chain workforce

Angela Carver asserts, “Labor shortages can be attributed to five main components affecting the labor pool.”[3] Those five components are:

1. Lack of emerging talent. Carver writes, “As supply chain and manufacturing industries increase in complexity and size, so must the workforce. The growth level of the labor pool is currently inadequate for the corresponding growth of the industry, outpacing available staff six to one.” Companies looking for supply chain personnel must compete with other economic sectors that together are looking to fill more than six million job openings.

2. Growing skills gap. Carver notes, “The talent gap is also contributing to growing labor shortages. As Baby Boomers retire (an estimated 60 million between now and 2025) and GenXers enter the workforce (approximately 40 million) a significant talent gap is appearing. Experienced Baby Boomers are being replaced by their less knowledgeable and less experienced younger counterparts creating higher turnover rates and increase onboarding periods. This not only causes a talent gap, but increased labor costs as well.” On the brighter side, Adrienne Selko (@ASelkoIW) insists, “Supply chain management is a career that perfectly matches the skill set of the Millennial generation — if they can be persuaded to pursue it.”[4]

3. Growing supply chain complexity. According to Carver, “Customer needs and requirements are increasing in areas such as order fulfillment, VAS and omni-channel retailing. This increase complexity means workers must have more technical skills to fulfill minimum requirements.” Technology can help. Accenture analysts Gary Hanifan (@GHanifan) and Kris Timmermans (@KrisTimmer) note, “Companies are cutting supply chain complexity and accelerating responsiveness using the tools of artificial intelligence. Through AI, machine learning, robotics, and advanced analytics, firms are augmenting knowledge-intensive areas such as supply chain planning, customer order management, and inventory tracking.”[5]

4. Increased need for functional knowledge. Carver explains, “[The digital age and supply chain complexity] has forced employers to eliminate siloed structures, creating jobs where a wider range of functional areas must be covered. … These types of jobs have helped to make the talent gap that much more apparent.” These new jobs are directly connected to the digital age and require technical expertise. Although this creates a workforce challenge for businesses, Hanifan and Timmermans assert, “In this new environment, both machines and humans are essential: By collaborating in roles such as supply chain planning and inventory management, the combined power of humans and machines will create new sources of value for businesses.”

5. Lack of educational opportunities. According to Carver, “Academia has also impacted the labor pool in that there are now [fewer] professors available to teach supply chain/logistics concepts needed to prepare for these positions.” In the end, this means supply chain managers need to attract and train the talent they need at company expense.

Because cognitive technologies are going to play an essential role in future supply chains, Hanifan and Timmermans assert companies need to create three new categories of AI-driven jobs. They are:

  • Trainers who help AI systems learn how to perform, which includes everything from helping natural language processors and language translators make fewer errors, to teaching AI algorithms how to mimic human behaviors.”
  • Explainers who interpret the results of algorithms to improve transparency and accountability for AI decision making and processes.”
  • Sustainers who ensure intelligent systems stay true to their original goals without crossing ethical lines or reinforcing bias.”

Selko believes tomorrow’s supply chain professionals will need additional skills along with a familiarity with AI. “Looking at future skills,” she writes, “employees will need to sharpen their strategic thinking and problem-solving capabilities. … But wait — there’s more. Other skills that are becoming more important are the ability to manage global/virtual teams, the ability to persuade and communicate effectively, and the skills to both lead and develop others. The good news in all of this is that the largest generation of workers, the Millennials, have career preferences that exactly align with what is needed.”

The solution: Robots and coming generations

Almost every economic sector facing labor shortages is looking to automation to help fill the gap. Merrill Douglas observes, “We’re sitting in the middle of a perfect storm for robots in the supply chain.”[6] He explains, “Companies use robots throughout the supply chain. Manufacturing is the traditional venue, but these days, you might even see robots in retail locations. Walmart, for example, has been testing bots that roam the sales floor scanning shelves in 50 of its stores. But many new developments focus on the warehouse. There, robotic solutions fall into at least three categories: bots that deliver product from place to place; bots that pick, insert, or otherwise manipulate items; and bots that do both.” Douglas is quick to point out humans aren’t entirely out of the picture. He writes, “Robotics systems help distribution facilities gain speed, increase accuracy, cut costs, and handle the grunt work so employees can focus on more productive tasks.”

As baby boomers retire, Millennials and Gen Z’ers are the most likely individuals to take their place. Brian Reaves observes, “It doesn’t take a crystal ball to see that it’s critical to shift your focus to Millennials and Generation Z now in order to future-proof your supply chain workforce.”[7] He then asks, “But how?” Good question. Reaves cautions that companies can’t lump these generations together as “the younger generation” because there are distinct differences — some of those differences are due to age. Some Millennials are mature adults in their 30s while some Gen Zers are teenagers. Nevertheless, writes Reaves, “For an industry like supply chain that is continuously changing, technology-driven, focused on problem solving, and growing (both in size and importance at the C-suite level), [new generation] attributes make Millennials and GenZ an ideal fit for positions throughout the field.”

Returning to the question about how to attract them into the supply chain field, Reaves has a few suggestions. First, they must be convinced that the supply chain field is both interesting and cutting edge. Since AI is essential to the supply chain’s future, they must be convinced the problems they will tackle are both challenging and important. Reaves cites Steve Hopper, founder and principal of Inviscid Consulting, who adds, “Both Millennials and GenZ are energized by work that serves a greater purpose and makes the world a better place. Generally speaking, however, Milliennials prefer collaborative work that addresses the big picture, while GenZ prefers more independent work — built on intensive information gathering — that addresses more discrete components of the big picture.” In other words, to attract these new generations of workers, companies need to help them see the big picture, understand the important role supply chains plays in making the world a better place, and convince them their technology skills will be challenged in interesting ways. The future of the supply chain relies on human/machine collaboration maturing in new and exciting ways.

Footnotes
[1] Teresa Chiykowski, “The Future of Supply Chain Management,” Kinaxis Blog, 23 January 2017.
[2] Rich Weissman, “Help wanted: The giant risk supply chain managers are ignoring,” Supply Chain Dive, 23 July 2018.
[3] Angela Carver, “Labor Shortages in the Supply Chain Workforce,” Datex.
[4] Adrienne Selko, “The Evolving Supply Chain Skills of the Workforce,” IndustryWeek, 23 October 2018.
[5] Gary Hanifan and Kris Timmermans, “New Supply Chain Jobs Are Emerging as AI Takes Hold,” Harvard Business Review, 10 August 2018.
[6] Merrill Douglas, “Robots in the Supply Chain: The Perfect Employee?Inbound Logistics, 23 April 2018.
[7] Brian Reaves, “Millennials and GenZ: The Key to Future-Proofing Your Supply Chain Workforce,” MHI Solutions Magazine, 23 March 2018.