World Bank Study: Global Shortage of Logistics Skills (Guest Post by Kai Hoberg, KLU)
My guest post today comes from Kai Hoberg from the Kühne Logistics University (KLU) in Hamburg. Together with his co-authors, Alan McKinnon and Christoph Flöthmann, he has just published a new report, which is commissioned by the World Bank and analyzes the shortage of qualified logistics personnel.
Qualified logistics personnel is in short supply worldwide. This is the conclusion of our new report, titled Logistics Competencies, Skills, and Training: A Global Overview. While there are too few well-trained executives in the logistics sector in emerging countries, there is an acute shortage of qualified staff at the operational level in developed economies. We argue that this skills shortage is likely to worsen in the absence of new initiatives. There are two aspects that deserve further elaboration: First, physically, there are too few people available to cover vacant position in the logistics sector. Second, the currently employed workforce is partially lacking the skills demanded for their job. Based on an empirical analysis, we derive multiple recommendations for relevant stakeholders, i.e. companies, governmental institutions and logistics associations. The proposed measures include innovative training methods like logistics-related business games that can be employed without requiring high upfront investments or long implementation lead-times.
Kai Hoberg is Associate Professor of Supply Chain & Operations Strategy at KLU. In his academic career he was a visiting scholar at Cornell University, Israel Institute of Technology, University of Oxford and National University of Singapore. He is on the scientific advisory board of the German Logistics Association (BVL) and has been working with companies like Procter & Gamble, McKinsey & Company, Jungheinrich and Zalando on supply chain innovation projects.
The End of Supply Chain Theory?
It is among the common research practices in our field to build a statistical model with a limited set of variables in order to take the lens of a theory – often being alien to our field – on a supply chain phenomenon, and to test this model based on maybe 200 datasets. Other researchers collect data from three or four case companies to build or extend a research model that comprises a small set of propositions. So far so good. “So far so outdated”, I should say if I were to be malicious. Why? Researchers in fields like supply chain management might soon (or already?) be competing with “companies like Google, which have grown up in an era of massively abundant data, [that] don’t have to settle for wrong models”, as the editor in chief of Wired put it already back in 2008, proclaiming The End of Theory. So, is the data deluge about to make our research obsolete? If so, how should our community adapt to this new reality?
Personal Predictions for Supply Chain Management in 2017
What are the upcoming SCM trends? Firstly, in our recent research about “hot topics” in SCM, sustainability topped the list. Indeed, 2016 has, most probably, been Earth’s hottest year on record. Ask yourself: “What will be my contribution to revolutionize our business models and create truly sustainable supply chains?” Secondly, 2017 could become the year for supply chain managers, as an increasing number of companies realize that SCM belongs in the C-suite – and that this can make a difference! Another example is Lego, the toy maker, which has recently appointed a supply chain expert to become new CEO. Companies seem to understand that SCM is not just another name for logistics; it rather creates the smile of value creation. Finally, machine learning and artificial intelligence have recently made an astonishing leap forward. Not much imagination is needed to realize that this development is about to “disrupt” decision making in SCM. Why not let machines select your suppliers? Have a good new year!
Future Research Themes in Supply Chain Management
What are the future dominant research themes in supply chain management? In my new article, Mapping the Landscape of Future Research Themes in Supply Chain Management, co-authored with Robert Handfield and Christian Durach and published in the Journal of Business Logistics, we make an attempt to answer this important question. Our research is based on survey data collected from 141 SCM scholars. Big data ranks 1st on the list of topics that scholars expect will become important in the next years. Interestingly, this topic does not even appear in the top 10 of the list of topics that scholars think should become important. This list is led by sustainability and risk management instead. We calculated the differences between the will-become-important and should-become-important topics. The largest discrepancies can be found for: (1) the “people dimension” of SCM, (2) ethical issues, (3) internal integration, (4) transparency/visibility, and (5) human capital/talent management. These five under-represented topics could thus be good choices for future research projects or special journal issues.
Wieland, A., Handfield, R., & Durach, C. (2016). Mapping the Landscape of Future Research Themes in Supply Chain Management. Journal of Business Logistics, 37 (3), 1-8 https://doi.org/10.1111/jbl.12131
If you don’t have access to the journal, please feel free to request a copy of the paper via ResearchGate (blue button on their page).
The Fascinating Future of SCM
Who would have said ten years ago that SCM is an exciting discipline? Not many! But isn’t it exciting what is currently going on? We can observe a number of disruptive innovations that are about to shift the way business is done. If we want to get a taste of what we will experience in SCM in the near future, we can look at how high-tech companies define it already now (see for example Microsoft’s definition of SCM): It will be about true visibility across end-to-end processes – and these processes involve raw material suppliers, component suppliers, …, and ultimately consumers. We might soon need to trash current textbooks that are based on over-simplistic OR models and Excel sheets. Such approaches are often too static to keep pace with current developments. Business schools will have to re-think their SCM curricula: Programming skills and knowledge about artificial intelligence might soon be expected by any SCM graduate.
Should Companies Have a Chief Supply Chain Officer (CSCO)?
Supply chain management has certainly become far more strategic in recent years. But does that mean that companies should have a chief supply chain officer (CSCO)? In their new article, titled The Appointment of Chief Supply Chain Officers to Top Management Teams, Roh, Krause & Swink (2016) aim to answer this question. Based on empirical data, they show that “financial leverage, internationalization, and diversification all predict CSCO appointment to the [top management team]” and that these contingencies also “positively moderate the effect of CSCO presence on firm performance”. Most importantly, appointing a CSCO makes sense when financial leverage, internationalization, and diversification levels are high, but it does not make sense when these levels are low. But companies should be fast now: The authors also reveal that “most of the contingency performance effects manifest only for early adopters of the CSCO role”. I am sure that CSCOs will soon be appointed in many companies.
Roh, J., Krause, R., & Swink, M. (2016). The Appointment of Chief Supply Chain Officers to Top Management Teams: A Contingency Model of Firm-level Antecedents and Consequences. Journal of Operations Management https://doi.org/10.1016/j.jom.2016.05.001
A Massive Shift in Search for Supply Chain Talent
Supply chain management is currently undergoing a very interesting transformation. Supply chain management used to be a collection of logistics and procurement processes but it has become far more strategic in recent years. In more and more companies chief supply chain managers report directly to the CEO – or supply chain experts even become CEO, as in the case of Apple’s Tim Cook! But how do future supply chain managers need to be like? An article by Chao (2015) argues that “an understanding of technology and an ability to work in a global environment are increasingly important in the supply chain”. Technological and analytical skills are needed that enable companies to cope with the wealth of data. Another skill that is needed is the ability to construct complex and global supply chains. Companies expect supply chain managers to think strategically and solve problems. That also means that universities worldwide need to adapt their curricula to this changing demand.
Multi-Methodological Research in Supply Chain Management
Just like OM research, SCM research is dominated by three research methodologies: (1) analytical modelling research (optimization, computational, and simulation models etc.), (2) quantitative empirical research (surveys etc.), and (3) case study research. There has been a recent trend towards multi-methodological research that combines different methodologies. A new article by Choi, Cheng and Zhao, titled Multi-Methodological Research in Operations Management, investigates this trend. The authors “present some multi-methodological approaches germane to the pursuit of rigorous and scientific operations management research” and “discuss the strengths and weaknesses of such multi-methodological approaches”. The authors make clear that multi-methodological approaches can make our research “more scientifically sound, rigorous, and practically relevant” and “permit us to explore the problem in ‘multiple dimensions’”. However, such research can also be “risky as it requires high investments of effort and time but the final results might turn out to be not fruitful”. Anyhow, as the authors conclude: “no pain, no gain”!
Choi, T., Cheng, T., & Zhao, X. (2015). Multi-Methodological Research in Operations Management. Production and Operations Management DOI: 10.1111/poms.12534
Personal Predictions for Supply Chain Management in 2016
I believe that SCM in 2016 will be focused on customers – more than ever before! First, analyzing customer data could become the new core competency. Many companies already got rid of non-core processes. For example, Apple has focused on R&D and marketing but outsourced production to contract manufacturers – a typical smiling curve! Now, companies are increasingly focusing on analyzing customer data and just happen to be making phones or cars. Cars could soon be offered by innovative IT giants from silicon valley who outsource engineering to traditional carmakers. Cars could become “software on wheels”. Second, production will take place closer to consumer markets. While labor costs in China continue to increase (and there is no “new China”!), new technologies make production close to major markets affordable again. For example, Adidas will start production in Germany in 2016 – in its new “Speedfactory”, which is operated largely by robots. This could dramatically speed up delivery to fashion-conscious consumers. Finally, what we will see in 2016 are truly sustainable business models (see my previous blog post). I wish you a good start into 2016!
Future Engineering and Manufacturing Supply Chains
According to a new DHL white paper, titled Engineering & Manufacturing 2025+ – Building the World, the Engineering & Manufacturing (E&M) sector is on the brink of change. The E&M sector is expected to transform over the next 10 to 15 years by responding to this change with intelligent and sustainable manufacturing as well as new business and collaboration models. These transformations will have substantial implications for our supply chains. While traditional supply chain goals like quality, efficiency, total cost, or delivery performance will remain important, future E&M supply chain models will (1) reflect a global network of regional supply chains, (2) focus on risk management to create resilience and compliance, (3) take care of emissions and resources to make the world sustainable, (4) implement end-to-end connectedness and integration, and (5) be agile and responsive. And I agree: In this era of volatility and due to the need to create CO2-neutral business models, supply chains need to be adapted and redesigned soon.
