With the "baby boomer" generation retiring and demand for supply chain skills outpacing supply, companies without a well-considered succession plan risk being left without leaders for crucial supply chain roles.
The United States' population is aging, putting the workforce at risk of losing some of its most experienced workers to retirement. According to the Centers for Disease Control and Prevention (CDC), nearly 24 percent of the total U.S. workforce will be 55 or older by 2018, compared to 18 percent in 2008.
Supply chain management is one of the most vulnerable industries when it comes to this changing employment landscape. As the space quickly grows and evolves, hiring managers are recruiting talent of all experience levels to fill skills gaps across their organizations.
To keep up with the growing demand for supply chain leadership, companies need to have a succession plan that helps them identify and develop new leaders who can replace existing leaders as they transition out of the company. Unfortunately, most have no such plan in place. According to a recent study from the American Management Association, only 18 percent of managers and executives have a succession plan in place to respond to a sudden loss of key executives—not nearly enough to keep business productivity up as people retire, despite the added number of supply chain undergraduate and graduate programs.
Proactive succession planning and a thoughtful recruitment plan are vital to the long-term success of any organization. But before a company can even begin to put recruitment and development efforts into place, it needs to have a clear vision of what type of skills it needs. The following three steps can help with that process.
Make your mission clear. To get started, define an organization or team mission that identifies the specific objectives of your vertical, then use that mission as the foundation of your succession plan. An example of a mission may be: "Our goal is to provide quality service to customers while using technology to be sustainable." Keeping your objectives at the forefront of your succession plan will be a constant reminder to your human resources (HR) department of what is important to your organization. From there, you can begin developing your succession road map.
Engage stakeholders across the board. Succession planning should involve team members beyond just the HR department. You want to be sure executives like the CEO, CFO, and supply chain team managers are also invested in the process. Having input from all affected shareholders is vital to understanding the keys to overall success for your organization and will allow you to look for the skills you will need in the future.
Look toward the immediate future. To be most effective, you must understand the dynamics and skill sets of your current team and prepare for potential staffing changes over the next year. For example, you'll need to think about things like who may be getting ready for retirement, who will be looking to move up the ranks soon, and where potential holes will be as people transition out of their current positions. Once you have a good grasp of which employees or roles you may need to replace or fill, you can determine whether you need to train existing talent or recruit new talent.
After laying this foundation, one of the most important steps you can take in creating a succession plan is to understand and further develop the strengths of your current staff. To accomplish this, consider taking the following steps:
Evaluate current skill levels. Look at your current employees' skills and use a numeric scale (for example, 5=excellent) to evaluate their performance as part of their annual review. Five- or seven-level scales are the most common and allow you to see exactly how an employee is performing, although for it be most effective, each number should have a corresponding detailed description of that number's representation. Doing this will help determine where internal candidates stand and help employees grow their skills, so they can continue to move up. Providing measurement tools and growth opportunities to current employees will also help reduce turnover by making employees feel more connected to the development process and by giving them confidence that their employer is invested in the future of their career.
Provide regular training. Regular training and development opportunities, especially those that focus on leadership and management, are a vital part of any succession plan. They provide your internal talent with the tools they need to move into positions that may be vacated in the coming months and years. When it comes to developing these training programs, it is not necessary to go it alone. Industry associations, for example, frequently provide learning and professional development opportunities, such as classes or workshops, that can be leveraged to develop your internal team.
Reduce turnover. High turnover rates can result in organizational inefficiencies, so it is crucial to examine turnover rates and determine their root cause. The logistics industry, for instance, is known to have turnover because of salary concerns, a desire for a better work-life balance, and a lack of regular training. To properly prepare for succession, employers must not only address and resolve conditions that contribute to high turnover but also focus on creating a positive work environment with competitive salaries and benefits packages.
While it's ideal to look internally, the truth is that sometimes you must go outside your organization to find the right person to lead your logistics or supply chain organization in the future. With senior leadership potentially approaching retirement, partnering with outside resources, such as a recruiting firm, can help you fill important roles. Here are some additional steps that can help you attract top talent.
Use social media. Tools like LinkedIn and the new "Jobs on Facebook" feature helps identify the right talent for your needs, using either a basic search or industry-specific group pages. You can see the discussions happening in real time and interact with engaged, informed talent through online conversations or targeted videos showing what makes your company unique.
Leverage professional trade organizations. Companies can work with trade organizations to meet talent, either through the organization's website or at trade organization-sponsored job fairs and other events. Professionals who are deeply involved with trade organizations are frequently the best ones to target because they are committed to long-term careers in the industry and are likely very knowledgeable.
Partner with educational institutions. Working with the supply chain or business programs at universities to recruit college graduates can help you find those hard-to-attract millennials. A few top schools to consider are those included in Gartner's "2016 Top 25 North American Supply Chain Undergraduate Programs" report. By hiring talent directly out of college, you can get an early sense of the candidates' capabilities and build your workforce from the ground up to ensure that your future supply chain leaders have the right management skills.
Once you have attracted the attention of job seekers, you need to choose the right candidates and make sure they end up at your company. To weed out unqualified candidates from the outset, provide a detailed definition of the skills and experience needed for potential employees to excel at your company. This means outlining the day-to-day responsibilities of a particular role in addition to what will be needed for long-term success. It will help to look back to your succession plan during the interview process to understand the diverse traits a leader-in-training will need to someday take on a high-level role.
Finding the right talent can be difficult no matter the employment situation, but in today's candidate market, a best-fit candidate can be challenging to find. When you do find the right candidates, you will need to make them an appealing offer quickly or risk losing them to a competitor. Know the salaries in your area and what kinds of benefits packages your competitors are offering. To help understand what to offer potential employees, use tools like the Ajilon Salary Guide to understand how you are stacking up and what candidates are looking for.
Succession planning requires a long-term, thoughtful approach that is flexible and capable of responding to a quickly changing talent landscape. By using these best practices for monitoring employee skills and engaging outside talent, you will be able to build a team of great future leaders.
Supply Chain Xchange Executive Editor Susan Lacefield moderates a panel discussion with Supply Chain Xchange's Outstanding Women in Supply Chain Award Winners (from left to right) Annette Danek-Akey, Sherry Harriman, Leslie O'Regan, and Ammie McAsey.
Supply Chain Xchange recognized four women who have made significant contributions to the supply chain management profession today with its second annual Outstanding Women in Supply Chain Award. The award winners include Annette Danek-Akey, Chief Supply Chain Officer at Barnes & Noble; Sherry Harriman, Senior Vice President of Logistics and Supply Chain for Academy Sports + Outdoors; Leslie O’Regan, Director of Product Management for DC Systems & 3PLs at American Eagle Outfitters; and Ammie McAsey, Senior Vice President of Customer Distribution Experience for McKesson’s U.S. Pharmaceutical division.
Throughout their careers, these four supply chain executive have demonstrated strategic thinking, innovative problem solving, and effective leadership as well as a commitment to giving back to the profession.
The awards were presented at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference in Nashville, Tenn. In addition to the awards presentation, the leaders discussed their leadership philosophies and career path during a panel discussion at the EDGE conference.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
As the final hours tick away before a potential longshoreman’s strike begins at midnight on the U.S. East and Gulf coasts, experts say the ripples of that move could roll across the entire U.S. supply chains for weeks.
While some of the nation’s largest retailers were able to pull their imports forward in recent weeks to soften the blow, “the average supply chain is ill-prepared for this,” Tom Nightingale, the former CEO of AFS Logistics, said in a panel discussion today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Despite that grim prognosis, a strike seems virtually unavoidable, CSCMP President & CEO Mark Baxa said from the stage. At latest report, the White House had declined to force the feuding parties back into arbitration through its executive power, and a voluntary last-minute session had failed to unite the International Longshoremen’s Association (ILA)’s 45,000 union members with the United States Maritime Alliance that manages the 36 ports covered under their expiring contract.
The ultimate impact of a resulting strike will depend largely on how long it lasts, the panelists said. With a massive flow of 140,000 twenty foot equivalent units (TEUs) of shipping containers moving through the two coasts each week, each day of a strike will require 7 to 10 days of recovery for most types of goods, Nightingale said.
Shippers are desperately seeking coping mechanisms, but at this point the damage will add up fast, whether a strike lasts for an optimistic “option A” of just 48 to 72 hours, a pessimistic “Option B” of 7 to 10 days, or even longer, agreed Jon Monroe, president of Jon Monroe Consulting.
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan “Nearest” Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of Uncle Nearest—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.