By Joseph O’Reilly | Inboud Logitiscs
What do companies value more when hiring logisticians: an academic background or real-world experience in several functions? As the supply chain continues to evolve and change, the answer is increasingly both.
Switch on the TV or click through Web ads and you’ll quickly see how supply chain management and logistics permeate mainstream media. UPS loves logistics. CSX knows how tomorrow moves. These companies and others have done a laudable job advertising the importance of transportation and technology in today’s consumer economy. Supply chain is crossing over to everyone’s benefit.
As its visibility grows, supply chain management has inevitably become more sophisticated and disciplined. Commoditized warehousing and transportation are making way for an emphasis on cost reduction and customer service, composing an amalgam of artificial intelligence, assets, and human touch.
Consequently, education is catching up. Students matriculate through undergraduate and post-graduate programs with a specific focus on supply chain and logistics. Curriculum is tailored to unique functionality. This new skillset is much deeper than in generations past.
Such vertical expertise and experience is not unique. Whether it’s engineering, medicine, or law, depth of knowledge is valued. But the supply chain brings its own nuances, especially as an emerging sector.
Supply chain management requires agility and adaptation—on-the-fly diagnostics and execution. That’s why some corporate recruiters are placing greater emphasis on more diverse academic and work experiences. They are hearkening back to the entrepreneurial spirit of invention and innovation that many transportation and logistics pioneers borrowed from agriculture and manufacturing, then improved on.
As a new generation of supply chain professionals comes on board with more polished credentials than their forebears, companies are looking to tap into the past—into an ethos and ethic that valued experience as much as institutional edification. They want the best of both worlds—in the face of a brave new supply chain.
TOYOTA PRODUCTION SYSTEM: A WHOLE NEW BALL GAME
In 1978, Taichi Ohno published his seminal work, Toyota Production System: Beyond Large-scale Production, which introduced manufacturing and logistics to establish a new way of understanding process flow. By his own admission, Ohno was greatly influenced by Henry Ford’s ideas on pull logistics, assembly lines, and vertical integration.
But he also recognized and appreciated some of the nuanced cultural differences that existed between America and Japan in a post-World War society. One of the most important points of contrast was labor.
Like Ford, a farmer’s son, Ohno came to automotive manufacturing by way of a different trade. His concept of automation centered on the auto looms at his father’s textile plant. He also pulled ideas from supermarket replenishment. So the basic precepts of the Toyota Production System were borrowed and adapted. It serves as a good example for how supply chain best practices continue to disperse across industries.
Ohno emphasized this lateral approach to innovation in terms of developing talent. He wanted production line workers who could perform different tasks, and who didn’t exist in functional silos. Job specificity, he believed, was an inefficient use of labor.
“Some say that trade unions in Japan represent a vertically divided society lacking mobility, while function-oriented unions of Europe and America exemplify laterally divided societies with greater mobility,” wrote Ohno. “Is this actually so? I don’t think so.
“In the American system, a lathe operator is always a lathe operator and a welder is a welder to the end,” he continued. “In the Japanese system, an operator has a broad spectrum of skills. He can operate a lathe, handle a drilling machine, and also run a milling machine. He can even perform welding.
“Who is to say which system is better? Since many of the differences come from the history and culture of the two countries, we should look for the merits in both,” he added.
Ohno valued labor in the context of teamwork. In fact, throughout his book, he used countless sports metaphors to illustrate the importance of collaboration.
“In baseball, for example, if someone drew boundaries around the infield defense zone, and said only the second baseman could play there, while the third baseman could only play in another designated area, the game would not be as fun to watch,” Ohno wrote. “Similarly, at work, things do not necessarily run smoothly just because area of responsibility has been assigned. Teamwork is essential.”
By relying on this team approach, and allowing workers the latitude to interchange roles on an assembly line, an organization is better able to react to changes in demand. Further, a more decentralized workforce capable of executing on demand eliminates the most costly waste: time.
“A business should have reflexes that can respond instantly and smoothly to small changes in the plan without having to go to the brain,” Ohno wrote. “It is similar to the fluttering reflex action of the eyes when dust is around, or the reflex action of a hand pulling away quickly when it touches something hot.”
MONEYBALL APPROACH TO RECRUITMENT
Today, companies have re-engineered the Toyota Production System and Lean best practices in countless ways. Manufacturing remains core, but that hasn’t stopped others from adopting and adapting some of the principles that Ohno inspired, especially when it comes to talent development.
In the service sector, Lean strategy has become a big part of customer relationship management. It gives third-party logistics (3PL) providers and other intermediaries an anchor to deliver value-added capabilities and grow partnerships. With an ethos of continuous improvement, or kaizen, the 3PL proposition has legs to grow. Still, convincing shippers to look at operations through a different lens, with new parameters, can be challenging.
“Shippers are looking to hit home runs, and 3PLs aim to increase on-base percentage,” explains Brian Murphy, director, business development at Menlo Worldwide Logistics, a San Francisco-based 3PL. “Those tools in the operational world might create bias toward Lean. Are they using the right kaizens? Are they using value stream mapping when situations arise? How are they attacking problems?”
Menlo stresses the importance of kaizen as it works through various projects with its customers. As a metric, kaizen forces a new outlook for the 3PL, its customers, and employees on both sides tasked with delivering wins. While kaizen often doesn’t produce direct cost savings, this analytical approach creates a constant churn that opens new windows of opportunity.
“It demonstrates that we’re not letting the water stagnate; we’re moving the paddle around,” Murphy adds.
This business development tack dictates the type of professionals Menlo recruits. Borrowing from Ohno, baseball metaphors provide an ideal context for understanding.
Murphy compares the way companies look at talent development to sabermetrics—where management uses detailed statistical analysis to find baseball players who may deliver greater value than their visible performance or skillsets may indicate.
In effect, they are trying to bring greater objectivity to recruiting players. The term was coined by statistician Bill James, and popularized by Oakland Athletics general manager Billy Beane in the 1990s, as depicted in the 2011 movie Moneyball.
“As we develop our internal talent pool—whether in sales, operations, or human resources—we have to buy into what the organization is trying to accomplish,” says Murphy. “With the limited funds he has, Billy Beane’s perspective is: ‘Do I get Albert Pujols, or can I get five players who buy into our system?’
“Now, there’s a reason these players are on the market,” he adds. “But if they have the fundamental characteristics that fit with what the team is trying to do to be successful, they can develop the rest.”
Because the supply chain is so fluid, and change widespread, Menlo wants logisticians who can problem-solve and execute on the fly. Bringing people in who have horizontal experience in different areas, or building a team with diverse talents, often lends itself to thinking differently. It provides different perspectives, which creates new solutions.
Menlo’s Emerging Leaders program, for example, helps employees gain exposure to different areas inside the organization—and outside their comfort zone. This way, people might start thinking about a customer project or problem from human resources, accounting, sales, marketing, finance, or engineering perspectives. When they make recommendations, they can take these other angles into account.
“Organizationally, Menlo tries not to stagnate resources within a specific area,” Murphy says. “We want employees to think differently. The only way to do that is by providing experiences in other places.
“Students have a more embedded supply chain pedigree; they know the fundamentals,” he adds. “Instead of locking them into their area of expertise, providing a more expansive view is priceless.”
POLLINATING NEW PERSPECTIVES
Perspective is important for another reason. When people understand how their functional roles impact other areas of the supply chain—especially from personal experience—they gain a greater appreciation for the synergies necessary to optimize performance.
The University of Arkansas Supply Chain Management Research Center is striving to develop this perspective within its curriculum and among local Northwest Arkansas businesses as it prepares students for private sector careers.
This type of sensitivity to other areas of the supply chain—how transportation impacts inventory management, for example—is an important consideration for supply chain professionals as they grow in their jobs, says Terry Esper, associate professor and executive director for the center.
To point, the University of Arkansas is creating new synergies across industrial engineering, business, and agricultural departments, using supply chain as a platform for greater research collaboration. The idea is to stoke pollination across disciplines, allowing students in one area to work and interact in another.
CHALK IT UP TO EXPERIENCE
Not surprisingly, area businesses value the wealth of experience University of Arkansas students possess when they enter the workplace.
“We partnered with the university, and hire a number of new grads in industrial engineering, logistics, and supply chain,” explains Greg Primm, vice president of operations, for Fayetteville, Ark.-based e-commerce company Acumen Brands.
“What’s interesting is that we use students in different ways—and not always in their field of study,” he says. “We can take a process-oriented engineer or supply chain student, and apply that skill to the way we market products.”
Acumen’s marketing is analytical and data-driven. Whether through online advertising or social media research, it’s all about getting the company’s brand names and messages in front of the right people. E-commerce success is contingent on being able to integrate marketing with logistics.
“This kind of marketing requires a very analytical role,” says Primm. “We have employees with combination degrees—a minor in marketing and a major in supply chain, logistics, or accounting—who first and foremost are analytical, but also understand marketing. They are valuable.”
Encouraging more diverse work experiences among supply chain practitioners also serves to organically stimulate professional growth and development. Menlo’s Murphy believes that having logisticians move around and learn different roles helps keep them fresh and motivated in their careers.
“Through retention, talent development, and guiding people through the organization, they will emerge as leaders,” Murphy says. “They need different challenges.”
A company can differentiate itself by giving aspiring employees channels to grow within the enterprise. If it becomes just a matter of financial incentive, someone else will eventually up the ante. Going after the free agent market every year to find talent is difficult to do—and at some point, businesses will get burned.
Companies have to find ways to make sure their employees are always challenged, advises Murphy. Then they have to find the right people to accept those challenges, and make sure they live up to the promise of providing opportunities.
PROBLEM SOLVERS WANTED
Supply chain innovation may push the envelope regardless. The age of big data is creating new demand for analytical problem-solvers. Whether it’s identifying inefficiencies on the warehouse floor, or modeling total logistics costs for a new offshore manufacturer, supply chain practitioners who can quickly engineer solutions under pressure will be in high demand.
“The bigger picture is key,” says Primm. “You have to be able to not only pull the data and analyze it, but also make decisions from that information. Everybody at Acumen needs to do that. I’m not going to run the numbers, then lob them over the wall to marketing and see what they think. It has to be collaborative.”
Today’s reality is that supply chain comprises many minds from different functional areas—mining, farming, manufacturing, retail, transportation, and warehousing. How companies are able to aggregate and leverage this shared knowledge becomes a competitive differentiator. But it’s a challenge—one that Ohno presaged decades earlier as industry entered the throes of the digital revolution.
“An ‘agricultural’ mind at work in the industrial age causes problems. But should we then go to a ‘computer’ mind in one jump? The answer is no. There should be an ‘industrial’ mind between the agricultural and computer minds,” he wrote.
Today’s supply chain mind is no different. It’s a composite of skillsets and capabilities, across industries, both old and new.