While various industry supply chain teams continue efforts in achieving 2017 year-end strategic, tactical, and operational line-of-business business and supply chain focused performance objectives, this is the opportunity for Supply Chain Matters to look back and review our prior 2017 Predictions for Industry and Global Supply Chains that we published at the beginning of this year.

Our research arm, The Ferrari Consulting and Research Group has published annual predictions since our founding in 2008.  Our approach is to view predictions as an important resource for our clients and readers, thus we do not view them as a light, one-time exercise. Not only do we research and publish our annualized predictions, but every year in November, we look-back and score our predictions for the year. After completion of looking back and scoring the current year projections, we will then transition into the unveiling of our 2018 Predictions.

As has been our custom, our scoring process is based on a four-point scale.  Four will be the highest score, an indicator that we totally nailed the prediction.  One is the lowest score, an indicator of, what-on-earth were we thinking? Ratings in the 2-3 range reflect that we probably had the right intent, but events turned out different. Admittedly, our self-rating is subjective, and readers are welcomed to add their own assessment of our individual predictions in feedback comments.

Our prior posting in this series included Part-One- a look back at our 2017 overall global economic outlook and our specific predictions related to sourcing and procurement.

We now re-visit two more of our 2017 predictions.

 

2017 Prediction: A Supply Chain Talent Perfect Storm

Self-Rating: 4.0 (Max Score of 4.0)

We predicted that for all functions that make up the umbrella of today’s supply chain management capabilities, a supply chain talent perfect storm, one that was sure to occupy more of the management attention of supply chain and business senior leadership would be front and center. The perfect storm is increased skills demand meeting limited available skilled talent supply.

Not to be viewed coy, but this prediction was an obvious one, given that this area has been a noticeable challenge for quite some time. Our notion of the perfect storm appears to be the case as-well since in multiple venues, industry and business publications, the challenge of finding appropriate skills has indeed accelerated. A sobering quote we shared highlighting the recent 2017 Pulse conference came from MIT Professor Dr. Abel Sanchez: “Only 20 percent of today’s workforce will have the skills needed for 60 percent of the jobs that will exist in the next ten years.” The implication is that businesses, supply chain management academic institutions and government need to re-think and transform how people acquire needed skills in faster cycles of self-education, expert knowledge-sharing and on-the-job training.

We expected organizations and recruiters to more broadly define and recruit employees from skill based dimensions and in expected performance parameters for both current and future organizational needs. Initial checks of select recruiters indicates for the most part, supply chain teams still make and evaluate hiring decisions solely based on years of specific experience vs. an inclusion of expected person’s traits and skills levels. Compensation levels for the most in-demand technical and analytical skills have reportedly increased, but compensation levels for ongoing roles remains one of best candidate at lowest cost.

We felt that individuals who possess required cross-functional hard and soft skills, including in-depth technology prowess coupled with broad change management prowess would continue to experience a seller’s advantage. From many accounts, that indeed is what is occurring with companies now turning to specialized management or technical consulting firms as an extended contingent workforce to springboard business process change. Last month, Argentus Supply Chain Recruiting, a Canadian specialized recruiting firm, published an infographic of the hottest jobs and skill clusters in supply chain and procurement in 2017. The listing included Logistics Managers, Strategic Sourcing Managers, and Business Transformation Consultants each commanding six-figure salaries.

Reports from various other recruiting firms indicate that needs for increased online customer fulfillment and a more compelling online business presence has made candidates deeply experienced in E-Commerce dimensions in such demand that retailers such as Amazon are suing other companies that poach employees. Conversely, changing Omni-channel driven customer fulfillment has added far more challenges in determining actual end-consumer demand which adds to the need for planners with deeper online product demand analysis experience.

Increased levels of production and global supply chain activities in economies reaching technical full employment levels has made it especially difficult to recruit workers with the deeper technical and analytical skills required to operate today’s equipment and service’s needs.

On a positive note, supply chain management focused professional organizations such as APICS, CSCMP, IBF and ISM have stepped-up efforts in various supply chain competency certification programs, additional learning opportunities and educational partnerships with specialized supply chain academic institutions.

 

2017 Prediction: Increased Anti-Trade Geopolitical Forces Will Provide Added Sourcing Challenges for Industry Supply Chains

Self-Rating: 2.5 (Max Score of 4.0)

 The essence of this prediction was that major developments surrounding global trade policies would occupy the attention of many industry supply chain organizations during 2017.

Last year we purposely delayed the publishing of our 2017 predictions because of uncertain backdrop of the United Kingdom referendum to leave the European Union and the unexpected election of Donald Trump as President of the United States. Mr. Trump’s ascent to the Presidency was from a campaign of anti-global trade rhetoric. There were genuine fears that the Administration of Donald Trump could trigger a trade war with China and Mexico with threats to impose higher import tariffs for components and products entering the United States.

Reports of corporate tax reform legislation laden with import taxes were being initially floated but were later dropped by U.S. Congressional leaders. With these heightened global tensions turning more anti-trade and possibly more protectionist rhetoric among nations, our belief was that industry supply chains needed to be prepared to deal with potential near and longer- term implications that such policies will bring about. Throughout the year we have urged industry supply chain teams to educate and prepare senior management for various implications or impacts of significant changes in global policies.

Thankfully, while the rhetoric continues, overt actions have not occurred, not yet.

That is not to state that such threats have moderated, far from it. Heightened trade tensions continue in a current environment of better than expected economic expansion. The question is whether a shoe will fall, whether that be ever more heightened tensions concerning North Korea’s nuclear intentions, the ultimate result of the Brexit and NAFTA negotiations, or which countries assume de-facto leadership in reconstituted Trans Pacific Partnership trade policies.

We self-rated this 2017 prediction at a lower score but we still believe the threat is real, and supply chains need to be prepared, regardless.

Organizations have gained added time to beef-up their supply chain network analysis and scenario planning capabilities.

 

In our next blog posting in this series we will look-back and self-rate three other of our 2017 predictions.

If clients or readers wish to contribute additional thoughts related to what occurred in 2017 and what to anticipate in 2018, you can contact us via email:

feedback <at> supply-chain-matters <dot> com.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.