Transportation/Supply Chain Talent Shortage:Turning a Major Problem into a Massive Opportunity

October 6, 2016, Glendale, AZSouthwest Association of Rail Shippers

Nick LittleManaging Director, Railway Management Program

Assistant Director, Executive Development ProgramsThe Eli Broad College of Business

Michigan State University517.353.5663 littlen@broad.msu.edu

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Nick Little – Background and Scope• High school thesis on freeway extension• Aspired to run the railway … but …• Joined British Rail pre-privatization from high school• On receiving end of great people development• On giving end of (great?) people development• Committed futurist• Practitioner turned quasi-academic• Problem or opportunity or both?• Observations

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The Numbers• 6:1

– Demand:supply for SC people globally• $95,000

– Top MSU undergrad starting salary (++)• 48,000 increasing to 175,000

– Truck driver shortage in NA per American Trucking Assoc.• 203,000

– Number of SC Technician jobs in USA• 30% annual growth

– SC jobs requiring trained & educated people• 247k to 216k

– Rail jobs declined in last 12 months

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A Major Problem

• Not enough good people to go round• 6:1 – global jobs to available, acceptable people

Source: SCTAI 2008

• Wrong skills, in wrong place, at wrong time, in wrong quantity.

• Impacts … – Costs increase– Retooling– Poaching– Rapid churn

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Current Research

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Insomnia

• Talent and leadership• Integrated solutions• Risk management issues

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Talent and Leadership

• Talent concerns• Talent expectations• Talent acquisition and qualification• Building and retaining leaders

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Representative Quotes: Talent Concern

Our entire leadership team is probably going to be turned over in the next 5-7 years; we’re all hitting that same age. We actually feel pretty good about succession plans for our replacements but it’s going down that next level and making sure we keep really good folks around so that they are going to be around when we get replaced so they can backfill their jobs.

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Representative Quotes: Talent Expectations

Younger employees don’t like the physically demanding nature of logistics-related jobs, and they are difficult to motivate. Our logistics centers have recruited 40 percent of its employees from the retired military. These employees are very disciplined and have significantly enhanced the morale of all employees.

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Representative Quotes: Talent Acquisition and Qualification

We’ve tried to create more opportunities for people to develop by working on projects outside of their site or business unit.

We know what we have to do. We have partnerships with the top supply chain universities in the nation to keep our pipeline much more robust and spend more of our time in supply chain human resources ensuring that our talent management and talent recruiting is always top of mind.

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Illustration of Talent Management Capabilities

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• Ability to work across organizational and firm boundaries• Ability to identify and manage value co-creation• Understand risk/reward trade-offs in the context of the

entire value chain• Ability to apply analytics to identify and evaluate potential

supply chain solutions• Cross functional and global rotations

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Leadership Development Practices

• Sourcing from the military• Apply mini-promotions to provide perception of

movement• Make talent in non-hub locations feel part of the team• Partnering with universities to demonstrate path from

internship to ultimate goal• Corporate university where employees can take

credentials away• Gender and minority initiatives.

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New Entrants

• Sources:– Universities– Community Colleges– High Schools– Middle Schools?

• Why follow a career in supply chain?

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$60,000 $120,000$100,000$90,000$80,000$70000$45,000 $140,000 $160,000

Supply Chain IntegrationCustomer Support

Product Development

Supply Chain ManagementConnecting people to products and services across town and around the globe.

Typical Education (or equivalent experience)

SecondaryAssociate/Vocational

Undergraduate

Postgraduate Master’s

Postgraduate Doctorate

MaterialHandler

Driver Long Haul Driver

Global Trade Control & Supply Chain Security

Supply Chain Planning, Master Scheduling, Forecaster

Production & Inventory ControlShop Floor Control, Dispatch, Expedite

Warehouse Ops. Planner

Demand Planner, Buyer, Buyer/Planner, Procurement Analyst, Procurement Agent

Customer/Supplier Program Management

Management (Production Control, Distribution, Logistics)

Market, Program, & Product Development

Packaging Engineering

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$80,000 $180,000$160,000$140,000$120,000$100,000$60,000 $200,000 $220,000

$35,000 $90,000$80,000$70,000$60,000$45,000$15,000 $100,000 $120,000

Clerk

Traffic, Transportation Planning

Logistician, Import/Export Control

Management (Logistics, Supplier & Supply Chain Management)

Director/Executive Supply Chain Management

© 2010 Supply Chain Talent Academic Initiative (SCTAI). Permission to use is granted provided copyright statement and logo are included.

Less Years Experience More

The above represents general industry data from various research sources

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The Opportunity

• Exciting area to work in– Analytics– Relationships– Negotiation– Operations– Fulfillment

• No longer seen as merely the “rescue squad”

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8 Reasons to Consider a Career in Logistics

1. Job availability [at all education levels]2. Annual income [BLS median $73,780/yr … $35.51/hr]3. Location and relocation4. Specialty options, competencies & industrial sectors5. Career contentment

– 89% better career opportunities– 79% happy with current job [CSCMP survey]

6. Advancement opportunities7. Entry level opportunities8. Job security [“the Amazon effect”]

Source: MHI

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The New Normal

• Strategic criticality• Wide range of capabilities, competencies, skills• Education and training

– Many different solutions such as • Degrees• Certifications• Non-traditional learning• Internships• Rotational programs

• Career path no longer vertical; now more lattice-like

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Conclusions• People have talent• People are your best assets• People need to grow• People like to succeed• People have more capabilities than we realize• Supply chain is the greatest place to work!