Talent in Supply Chain

Burning Issues For Supply Chain Managers

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“There is no art to find the mind’s construction in the face”- this is very true and a challenge most managers face when recruiting. This is truth stands when the market is flooded with candidates or the pickings are slim. Finding the combination of skills, aptitude and attitude can be quite tricky when even the psychological and personality test only have rigid outputs and simply just putting warm bodies on the job can have costly consequences.

Considering that talent usually has a high contribution to the businesses expenses, is it no wise to pay for top quality than high quantity? My grandmother used to say “goedkoop is duurkoop”. This may seem counter intuitive but highly impactful individuals may come at a cost.

The costs of frequent recruiting add up and can be avoided or funneled by hiring and paying well for quality talent. What good does it do you when you have employees like wheel barrows that will only move when moved and could not be self-enterprising. Be willing to pay your talent very well, invest in it and care for it as you would any of your multi-million machinery, and you will realise the return on investment akin to the effort you put in.

Good talent should be multi-skilled, this is important for both the business and the talent. When skills are diversified it create for an adaptive environment and easier succession planning. Especially if the multi-skilling is geared towards upward mobility-93% of employees would stay at a company longer if it invested in their careers (LinkedIn’s 2018 Workforce Learning Report). This entrenches in your talent that they are valued, it creates sustainability and lowers staff turnover. The business benefits in that when talent leaves there is a ready replacement that can essentially-“plug and play”.

Most businesses neglect succession planning, this is an integral part of talent retention. This is also serves to retain institutional memory.

Remember the following:

1. Highly engaged employees are 87% less likely to leave
2. Average employee exit costs about 33% of their annual salary
3. 70% of employees chose a company the invests in their learning and development
4. Employees are 8 times likely to stay when they feel they are assisted in finding a work/life balance
5. Employees are 5 times more likely to stay when they are acknowledged
6. employees 4 times more likely to quit when there is no upward feedback or managers lack appropriate management skills

Supply Chain force majeure- Corona Virus

This virus caught us all by surprise. It has put a stop to production therefore interrupting
the supply chain in a way the world has not seen in recent history. Many businesses will
be crippled if not shut down completely. This impact will be ever so severe for
businesses that do

Investment in a good digital system may seem excessive for a business as the benefits
cannot be completely quantified upfront, but it is those businesses with the best
scenario planning or anti-fragile systems that will come out better. These ensure that
the business is more flexible and will point out trends with suppliers or regional
disruptions and give alternatives reducing or ultimately averting any adverse impact to
the business.
This event also highlighted the flaws of the JIT system. The system works well to
reduce costs across the supply chain but as many businesses import their products
from China, this has left a lengthy gap in supply. Many businesses have established
supply chains that work fluently without disruption and have done so for years. These
businesses consequently do not even have contingency plans or alternative supplier
locally or in a different region of the world. Some business will only carry buffer stock
enough to cover their lead times and when major disruptions occur there is not enough
time to react.
If your business makes it past this, interrogate your supply chain. Ensure that should an
event similar in magnitude or greater happen upon us again your business is prepared.

Benefits of forecasting, for your business

Reduce holding costs

 

Forecasting is a great tool for your business and its one of the requirements on your business plan. Estimating the amount of sales you be able to make in the next year and when you will be breaking even.  Below are a few reasons why you should be forecasting in your business.

1. HELPS TO PREDICT THE FUTURE

Forecasting does not predict exactly will happen in the future to the MARKET and your company over the coming years, but it will help give you an idea. This will provide you with a sense of direction which will allow your company plan accordingly and therefore get the most out of the marketplace which ever direction the market turns. Forecasting clarifies trends for the company inventory and services.

2. INCREASES IN IN-STOCK LEVELS

Forecasting helps enhance the trends in demand for your product or service throughout its cycle. Whether there is a seasonal, economical, promotional or event and holiday driven trend of demand. In order to keep your customers satisfied you need to provide them with the product they want when they want it. You also need to know where this demand is to avoid overstocking and increasing waste and returns. This advantage of forecasting in business will help predict product demand so that enough product is available to fulfill customer orders.

3. ASSIST WITH LEARNING FROM THE PAST AND IMPROVING ON IT

Looking at what has happened in the past can help companies predict what will happen in the future. This is where trends are derived. To see for example, if the is an increase/decrease in demand for your product when seasons change and to know how big this change is, thus making the company stronger and most likely more profitable.

4. GIVES A COMPANY A BETTER LOOK OF THE FUTURE

By forecasting on a regular basis, it forces companies to continually think about their future and where their company is headed. This will allow them to foresee changing market trends and gain market advantage or keep up with the competition.

 

 

Optimize staffing Costs

5. SAVE ON STAFFING COSTS

One of the advantages of forecasting in business is that it allows companies to predict how much product will need to be produced to meet customer demand. From here a company can use this data to accurately determine how many employees they will need to have on hand to meet the required level of production.

6. USE FOR SALESPEOPLE

Salespeople can use sales forecasting as a planning tool to maximize commissions and bonuses. By knowing what customers have purchased in the past during specific times of the year, the salespeople can time their sales calls so that they contact customers when they are ready to buy. This ensures they will be making the best use of their precious time.

7. CUSTOMER INFORMATION

Sales forecasting allows you to spot trends for your individual customers based on buying patterns. This will help you to spot opportunities to sell beneficial products to customers they hadn’t purchased. You’ll also be able to identify products customers buy frequently so that you can offer special promotions to increase sales.

8. REDUCE INVENTORY COSTS

Forecasting helps predict how much inventory should be on hand at any given time to achieve the set budget. By having the right amount of inventory, your company will be able to save on warehouse and transportation costs. There will also be less risk of incurring obsolescence costs or having to discount products because you have a large surplus.

Match inventory to demand

9. HELPS PREPARE FOR A DROP OR INCREASE IN SALES

A drop in sales is never a good thing for a company, however, the advantage of forecasting in business reveals sales drops which in turn, can be recognized and dealt with quickly. By forecasting demand, a company can see if an increase in sales is likely imminent. This will allow the company to prepare for this increase in business by providing extra staff or production facilities to meet this new level of demand.

10. STOCKAND PRODUCT MANAGEMENT

Sales forecasting will allow you to have better control of your inventory. You’ll be able to examine trends to determine your peak selling and slow selling periods, so you’ll know how much inventory you need to keep on hand during the year. This will help prevent lost sales due to out-of-stock situations, as well as the cost associated with carrying too much inventory