Supply chains have been around in various forms for decades. However, with the rise of digitization, artificial intelligence and countless other disruptive technologies, things are changing at an exponential rate. Today’s customer demands short delivery cycles, more variety and customization, and low cost. This forces production runs to become shorter, sends the number of stock-keeping units through the roof, reduces forecast accuracy and much more. Consumers want to have their cake and eat it, too — preferably on the same day!
Whether technological advancements created more demanding customers or vice versa, it’s safe to say that each is an enabler of the other. Therefore, when hiring supply chain employees, it’s paramount that they understand and represent our modern era.
Knowledge versus skill
Knowledge is the understanding of facts, truths and principles, as learned from study or investigation. Skill is an ability to do something well, resulting from one’s practice and aptitude. We obtain knowledge from reading books, listening to lectures or watching videos. We obtain skills through the application of that knowledge, usually through repetition. Books about exercise won’t get you into shape — unless they are quite heavy and you lift them repeatedly.
Although one can teach many things to an employee, there are three things that I look for when hiring: analytical, abstraction and financial skills. Each one gives a candidate a significant advantage over the rest of the applicants.
Analytical skills. A candidate’s ability to analyze an issue based on available data gives you a good indication of their ability to think critically. Anyone can develop spreadsheets and graphs, but to be able to identify an issue, scrutinize the situation, understand it and develop a recommendation is another thing entirely.
Years ago, I assisted a major food manufacturer with a project. The client, a senior manager, asked me to review a spreadsheet while he and my boss went out to lunch. While they were gone, I reverse-engineered the spreadsheet to better understand the data. During my review, I found several errors. After I fixed them, I realized that my newfound results did not support the client’s conclusions. I rechecked my work and confirmed my reasoning, then presented my findings to my boss and the client. The client was pleased that I had discovered the errors, and both he and my boss agreed with my conclusions. The client and I went on to collaborate on several projects together, and we became good friends.
Abstraction skills. Abstraction is the ability to take concepts that are typically found or attributed to one industry and apply them to another. Although many people believe their company or industry is unique, supply chains are usually more similar than they are different. Virtually every supply chain follows the SCOR methodology of plan, source, make, deliver, return and enable. A supply chain’s uniqueness is really just the way its processes are developed, the nomenclature its team members use and how strategic objectives are executed. Most supply chain processes should be designed based on system requirements and material characteristics, not because the network happens to be in retail, chemical, pharmaceutical, or any other particular industry type.
Concepts such as strategic sourcing, transportation management and control towers work well regardless of industry. Crossdocking, once used almost exclusively in less-then-truckload, is now common in nearly every industry. Kitting and outsourcing have been successfully applied in countless fields, implemented based on each organization’s individual requirements.
Financial skills. The last skillset that I look for in a candidate is financial. The language of business is finance; so, for supply chain professionals to be taken seriously, it’s necessary for them to have this competency. A candidate should know their way around a balance sheet and an income statement and have a familiarity with financial ratios. Virtually any capital justification for a new supply chain investment should have a financial component as part of the analysis. Supply chain professionals therefore should be well-versed in total cost of ownership, landed cost models and discounted cash flows. This enables them to provide management with a complete picture of the costs of various alternatives.
Likewise, a savvy supply chain manager with a financial background will not only understand the importance of raw material inventory reduction, cost of goods sold and finished goods inventory, but they will also be able to explain how these things affect gross profit and earnings per share.
Supply chain professionals who possess analytical, abstraction and financial skills differentiate themselves from the competition and set a precedent for lifelong learning. These are key requirements to remaining relevant, staying ahead of the curve, and achieving career growth and success.
Disclaimer: This article was prepared by the author, acting in his personal capacity. The views and opinions expressed in this article are the author's own and do not constitute or necessarily reflect a statement of official policy or position of the author’s employer.