COVID-19: Accelerating a Problem, But Not the One You May Think

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Without question, the impact of COVID-19 will be long lasting.

As we begin to look toward the future, the question is how its impact will endure. Preliminary results of a Gartner study show slightly over half (51%) of supply chain executives feel long-term it will reduce the globalization of supply chains; 56% view it as a catalyst for the restriction of trade and movement of goods. Two-thirds foresee it reducing the trend of offshoring manufacturing and a whopping 93% believe it will force the adoption of new business models.

At the end of the day, the pandemic will accelerate a trend the profession has been addressing for decades — supply chains will continue to get more and more complex. To compensate, the profession is further accelerating the race toward supply chain digitalization. Virtually all (96%) supply chain executives surveyed see digitalization accelerating and none see it slowing down. The 4% holdout only see the pace of digitalization staying the same.

While of supply chain is a sign of progress, the profession is running headlong into a much bigger problem. Before the pandemic, 73% of supply chain leaders commented that they did not have the talent they need to meet current performance requirements. As unemployment ratchets up, one would think things would come back to equilibrium —with more people available with fewer available positions — but that simply isn’t and won’t be the case. The pace at which the combination of digital, business and supply chain competencies are being required is growing proportionally to the acceleration of the digitalization of supply chain. All things kept equal, the talent gap will continue to grow (see Illustration 1).

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But with the appearance of artificial intelligence, machine learning and predictive analytics in supply chain applications, it is highly unlikely that all things will be kept equal.

To fill needs, Gartner found that 68 percent of professionals think that only staff with a highly specific mix of competencies and experience can successfully perform the work they need their teams to do. So, the solution would appear to be either hiring your way out or developing existing talent. However, that doesn’t seem to be working either. Very few believe they can hire talent fast enough, especially with many companies implementing hiring freezes, and only slightly more believe they can internally quickly develop it.

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Something must give, right? Gartner’s Digital Talent Gap Survey reveals the top activities most correlated with executives believing they have all the talent needed to meet current and future requirements. 1. Simplify systems and tools to reduce how much technical knowledge staff need to use them effectively. 2. Eliminate as many specific procedures, partners, rules and policies that staff must follow to complete workflows. In other words: simplify, simplify, simplify.

The challenge at hand is to capitalize on the advantages of digitalization without outpacing the ability of the talent to deliver the benefits.

At the end of the day, the solution resides with both the creators and the users of the technology. More technology providers need to develop systems and tools from the perspective of reducing talent dependencies rather than creating them and supply chains need to ensure the long-term talent cost impact is assessed before acquiring it.

Michael Uskert,
Chief of Research,
Gartner Supply Chain
[email protected]

 

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