Supply chain and the 99%

A recently released poll from the Pew Research Center reveals some scary stuff about how Americans feel about economics in the US today. When asked about groups they felt had been helped by the federal government’s economic policies, just 6% felt that small businesses or the middle class had gained, while 41% thought large corporations were the winners. These stark numbers reflect a desperation that we in supply chain can actually do something about.

Our customers, suppliers and staff are the losers

Start with the first loser: small business. For many of us in supply chain these are our n-tier suppliers as well as our customers. Tapping the widest possible marketplace for purchased inputs is one way many of us can give hope to the small entrepreneur struggling to win contracts with big business that can mean growth, job creation and innovation. The means are there in the cloud, which levels the playing field for businesses of any size to compete. Let’s give them a chance.

The middle class, our next big loser, was traditionally the workforce we all depended on in our plants and distribution networks. In April, our manufacturing footprints report found a clear majority looking to reshore at least some production to the US, but very little in the way of new job creation.

Matching this fact with our perennial talent problem makes me wonder whether the case can be made to add training and skill development at lower levels in our operations. Manufacturing may be increasingly automated, but skill in handling these powerful new tools might well spark life in the middle class.

Is big business really the winner?

The big winners, according to Pew’s poll, are large corporations. You, like most other SCM World members, probably work for one and I know from endless first-hand conversations that most want to do the right thing. Our first master is, of course, the shareholder whose thirst for profit is limitless. But are we not also dedicated to the good name of our employer, the vibrancy of our communities and the satisfaction of our customers? Many of you have shared your hopes that we can somehow rebuild the positive image of big business as supplier, employer and neighbour.

It starts with embracing something we in supply chain know better than our colleagues in marketing or finance, which is that everything is connected. Last week in Minneapolis, General Mills hosted an extraordinary session comprising 30 senior supply chain executives from companies around the world. The day-long discussion circled the topic of our interconnected value chains and what huge benefits could be wrought from a co-operative, rather than competitive, attitude. The pay-off in profit terms looks promising; the wider pay-off in terms of our supply chain ecosystems may be even more important.

Priming the talent pump

Henry Ford blew up the old model of cheap, disposable labour with his revolutionary $5 per day wage in the early 20th century. It was at least a partial catalyst to Ford’s explosion of productivity by priming the pump of demand at the same time as it drew in armies of ambitious talent. Who among us is in a position to do something similar today?

Is it the big retailers whom I have argued need ever cheaper prices less than they need smarter, more empowered store associates? Is it the capital equipment manufacturers whose need for agility and service excellence trumps the value of lower-cost production? Is it the consumer packaged goods industry whose need to engage consumers in product innovation is more important than the need to shave a nickel off the price?

All the research we’ve done and seen on talent in supply chain cries out for more versatility, business savvy and creativity. At the same time, everything we hear about supply chain’s role in the eyes of the board points to something more than just cost cutting. The 99% are restive and unless we specifically design them back into our plans we may end up short on suppliers, short on talent and short on customers.

It shouldn’t be a government policy thing, it should be a business strategy thing. And it could start with us.

Please contact me directly with any comments, questions or suggestions. I welcome your feedback.

Kevin O’Marah
Chief Content Officer
SCM World