Recruiting and retaining staff in automotive logistics is one of the most pressing issues the industry is currently facing, with shortages reported across all functions, from warehouse labour to truck driving.
At the same time, at an executive level, supply chain and logistics executives have traditionally been on the receiving end of management board decisions, expected to solve problems and cut costs without the opportunity to influence board-level decisions on company strategy.
The seismic disruption of the last three years may have shifted the ground on that traditional set up. Through the pandemic and several aftershocks, supply chain and logistics managers have been meeting more regularly with the executive level to discuss weekly or even daily contingencies to protect vehicle production.
With the next threat to the supply chain only a matter of time, is now the time for experts in the field to have a permanent seat on the board? And could the elevated status of supply chain and logistics help attract a new generation of talent?
Skin in the game
At this year’s Automotive Logistics and Supply Chain conference in Bonn, Germany, Martin Corner, head of supply chain and logistics at Aston Martin, got the discussion rolling by demanding to see the supply chain represented as a standalone function in the C-suite within the next five years.
“I would also like to think, to encourage people to come into supply chain, that in the next 10-20 years we get a high percentage of automotive CEOs who have come from the supply chain space.”
Corner’s argument was that there is no one better equipped to design and orchestrate the full value chain than those who work in the supply chain. They are the people proven to be blessed with pragmatic problem-solving skills and more likely to be data orientated and confident in engineering design.
“Who better to be a CEO than someone who knows how manufacturing operations work and how the full value chain feeds our plants so they can be agile for the future?” asked Corner. “Who better to work with sales to design the distribution network of the future by optimising for cost and agility?”
Corner made the case for the future of C-suite supply chain professionals by highlighting that they touched each aspect of the business from end-to-end. That included everything from the sourcing of inbound parts to the distribution of those for the aftermarket. Supply chain and logistics managers were also used to integrated business planning, understood the ebbs and flows of product design, volume planning and industrial operations, and managed finished vehicle deliveries.
“The future for automotive to be successful is a very strategic and resilient supply chain function that designs the value chain for automotive companies,” said Corner. “The leaders need to come from that space. No one else touches the business end-to-end.”
Corner admitted it would be hard to break down traditional functions but said doing so set the foundations for an ecosystem that would attract a new generation of talent that was more for agility and integration than hierarchy.
A talent for strategy
Jean-Christophe Deville, head of production and vehicle logistics at Toyota Motor Europe, said the voice of the supply chain had to be credible at the executive level, adding that there was a high degree of interest in supply chain and logistics at that level. However, he also said there needed to be more strategic thinking to bring added value to long-term decisions on plant and supplier locations, and that was a key requirement of new talent.
Supply chain is now represented at the sourcing committees and sales planning meetings, which is important for Toyota’s aim to procure, produce and sell in the same region.
“It is very important to be agile and reactive,” said Deville. “The Toyota production system is based on just-in-time, not just-in-case, and supply chain is [ranked] really high, higher since the crisis.”
What is important now, according to Deville, is a greater effort to attract a younger generation of talent, with an emphasis on diversity and inclusion.
“I’m pretty sure that if I went to the university and asked would you like to work for a Japanese company in the automotive sector in supply chain, it would be no, no, no,” said Deville. “I need to open up the possibilities for multiskilling that we need to balance with expertise. There are so many connections to many other jobs internally, we need to promote this with permanent learning activities.”
Deville recognised the strengths of different generations and said training people and making teams composed of those different generations was beneficial to Toyota.
“This is what we need to do more than ever because human capital is our most precious asset,” he said. “Investing in people is a clear priority and how to attract the younger generation is important. Toyota needs to be at the top of the list.”
The talent LSPs need for future C-suits
Michael Schuetrumpf, head of contract logistics at DP World Europe also noted the challenge attracting interest in a highly complex and stressful job but he also pointed to the rewarding aspects. Echoing Corner and Deville, he said supply chain and logistics management was “clearly the most complex and interesting part of the business” touching all aspects of daily operations and offering a rich learning environment from which to develop.
“We need to get this across to our people, we need to educate them that is the case,” he said. “We should use e-learning, advance knowledge and embrace new generations. They have new ideas and all the understanding. If we accept the right teams we can scale ourselves up.”
Schuetrumpf said it was important for younger people to join the team because the future in the C-suite will have to include logistic and supply chain experts.
Ken Allen, who was previously CEO of DHL Express, knows something about the C-suite himself. Today, chairman of the board for premium logistics specialist CNW, he stressed the importance of employees having full understanding of the systems and processes across the business and its customers. “The key priority is to understand your own business and where it fits into the value chain. Any employee coming into the business needs to have the total knowledge of processes and systems, as you can’t afford for anthing to breakdown,” said Allen.
“We have to hire for attitude; teach employees that the purpose of the business is to create and keep a customer,” he added. “The role of management is to build an insanely customer-centric culture so that if there is an issue, then everybody jumps in.”
Coverage from Automotive Logistics and Supply Chain Europe 2023
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Supply chain needs its own movement in the C-suite