Tony Richter of Bastian Consulting talks about the shortage of talent available to the supply chain and logistics industry, and how companies might attract and keep the coming generation of professionals.
According to Tony Richter, Partner at Bastian Consulting, there is a short-term problem and there is a long-term problem in attracting young and talented people to enter a career in supply chain.
He notes that in the short term, the COVID-19 restrictions on international travel mean that the supply of talent – particularly supply chain tech or software professionals, who often migrate to Australia from countries such as India and China, among others – is much weaker than the industry has been accustomed to.
As the vaccine program rolls out, and restrictions on younger people migrating ease, this short-term supply issue will stabilise, Tony says.
But there is a longer-term problem, he cautions, within the industry when it comes to attracting talent.
“I think for the younger generation, and particularly for those born in Australia, there’s been a lack of education as to what a career in supply chain can actually look like,” Tony says. “Compare supply chain and logistics with something like accounting. If you’re an aspiring accountant you get your CPA, and there is an educational and accreditation structure that gives clarity – at least in terms of a baseline – for what you can expect.”
This isn’t the case in supply chain and logistics, he says. There is a great variety of roles in the industry, but for a young person interested in some of these roles, but not others, there aren’t clearly defined channels to go through.
On top of that, there is also an outdated, yet still pervasive, view of what the industry looks like.
“It still has a reputation of being about just trucks and sheds and moving boxes – old school transport type of stuff,” Tony says. “It’s an old industrial sector in most people’s eyes. They don’t realise how much analytics, software, technology and data-science goes into it these days. Whether it’s process mapping, optimising manufacturing or warehouse settings – there’s a lot of science and abstract thinking that is obvious once you’re in the industry but might not be very apparent if you’re looking in from the outside.”
He adds that while first tier businesses understand supply chain to be core to their business model and competitive advantage, some smaller- to medium-sized organisations still regard it as a “back-office or largely administrative function”.
Tony says that the “talent gap” has been a talking point for those in the industry for some years now, and that the phenomenon pre-dates COVID-19. That said, COVID-19 certainly brought to the surface the talent gap by simultaneously creating more demand for talented labour while at the same time restricting its supply.
“Even before COVID there was increasing investment in the sector because of need,” he says. “COVID is really shining the spotlight on the area now because every business, big or small, realises it needs a smoothly operating supply chain function because that in itself is a competitive advantage, rather than merely a support function. There is now an over-investment taking place because people realise how they’ve under-invested for so long, and combined with the factors limiting talent supply, this is creating a real problem.”
We ask Tony where the unfolding process of automation fits into talent-gap considerations. Is it possible that many young people assume that much of what concerns traditional supply chains and logistics is being automated, and therefore suspect that their futures in the industry might be limited?
“There is absolutely a move towards automation, and it’s an ongoing learning process,” he says. “In some areas, like demand and inventory planning, there’s AI and algorithms that are taking out the repetitive transactional nature of supply chains. But it’s a stereotype to say that just because AI is out there that means every company is adopting AI or has the capacity to work with AI – because there’s a lot of variations around who can actually use this stuff.”
He says that companies will use AI to the extent that it is applicable and affordable, but that for a great many businesses human labour and Excel spreadsheets will still be the norm for some time to come.
“But not only that,” he adds, “while some might focus on job losses caused by automation, particularly in the bigger businesses, what people sometimes forget is that automation creates new jobs in warehousing environments. There’s a gap in skills now as to how to work with the technology, how to get the full ROI, how to best maximise utilisation and capacity and so forth.”
This is where there are real opportunities for young supply chain professionals who are both technology-savvy as well as experienced enough in on-the-ground terms to fill such roles. “There are some middle management roles that pay between $100k and $130k, let’s say – around the lower-middle management level – that you can probably get to after seven or eight years of solid work in the industry, and perhaps less if you accelerate your career in the right ways,” Tony says. “That means you can be earning quite good money by the time you’re in your late 20s or early 30s. For instance, now there is a big push among some companies to implement autonomous mobile robots for purposes of cleaning. It’s a newer concept for Australia but a process many companies want to implement, but very few people have actually worked with them. Because we lack that middle-band of young, technologically adept, but relatively career-mature professionals in Australia, companies will have to import talent from overseas. If we want to nurture a pool of homegrown supply chain professionals, we need to offer them a vision or career path that they don’t simply associate with traditional warehouse work – even if that initial ground-level warehouse work is an essential step in their career trajectory.”
So, if a company was trying to sell a young talented Australian on the idea of pursuing a career in supply chain and logistics, how should they do it?
“I would frame it in terms of why it matters,” Tony says. “I’m interested in the space because it’s the heart of business. It’s the engine that runs everything. I know that every professional – from marketing to finance to sales – is liable to overvalue their own positions within a company, and everyone is of course important in keeping their particular cog or wheel turning. But without well-functioning logistical and supply chain functions a business will literally grind to a halt.”
Providing more structure to manage the transition from university to work is key, Tony adds.
“Working alongside Universities and hosting orientations on-site with students pursuing a related degree of interest would be a great start. Mapping out what a potential career path would look like and getting this out to as many young people as possible while partnering with some educational institutions on some marketing initiatives is essential to grow the future talent pool. There is always the option of someone starting out working a warehouse floor and being promoted due to hard work and success. I feel that up until recently, most people have fallen into supply chain by default. But if we can be more proactive and show talented young people how interesting, involved and important this sector really is and why it should be their ideal career choice – that will make a world of difference.”
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