Thursday, May 8, 2008

Development of human capital for SCM competitiveness

Development of human capital for SCM competitiveness

Companies big or small have been spending money to educate and train up SCM practitioners. Management sooner or later realize that the efforts to develop the human capital may have been wasted as the participants of these various education and training programmes do not demonstrate significant or subtle differences in improving the supply chain management.

There is a need to have an effective methodology to develop human resources. It is believed that practice makes perfect. We can see in football, soccer, tennis, golf, badminton, squash and almost any other games, that there is a need for the holistic training and development besides the natural talent.

It is in fact most powerful to get everybody back to basics to begin the baseline and the journey of continuous improvement to the ultimate goal. However, most management tends to favour the big bang approach and the perceived ability to leapfrog to the best practices. It is like everyone can be a Tiger Wood or David Beckam given the intensive “how to” training. Many have been let down, simply because there is a learning curve involved and not everybody can have the same learning speed, absorption, creativity and innovation.

There are corporations spending millions of dollars pushing the employees through education and training, sometimes within taking into consideration what are the practices outside their own environment. Some corporations take great pains to protect their decades old policies and procedures, and miss the opportunities to learn from outside some of the more effective concepts, tools, techniques, methodologies, and process thinking. In-breeding can be hazardous, more so if the competitors are adopting better practices from the market.

Not many people like to go through what people at GE underwent during the Jack Welch’s leadership. The simple philosophy of “Cost Down or Close Down” or “either number 1 or number 2 in the market, or out you go”, may become very stressful but can be very rewarding.

Education and training without alignment to the corporate and supply chain strategies can be a total waste of money, time and resources. The HP versus Dell corporate and supply chain strategies have been challenging, resulting in HP being the world leader at the moment. GM versus Toyota is another good case example. Nokia versus Motorola mobile phones is another example. There are many other exciting examples for corporations to benchmark. Al these should be part of the education and training to develop the competitive human capital.

No doubt people are generally reluctant to change, but then if their quality of working life can be enhanced with the right knowledge surely they can be motivated. How many people in supply chain management enjoy raw material shortages, finished goods shortages, perpetual expediting, lines down, stress-related quality problems, undesirable productivity, poor customer delivery and service, and on-going fire-fighting.

Some of the golden rules for development of human capital:
1) Top management walking the talk
2) Shared vision and missions guided by KPI’s for performance management
3) Education and training for almost everybody to have the same conceptual process framework, key concepts, key processes, and the appropriate KPI’s
4) Established proper project organisation and team
5) Identify the key action items and roadmap
6) Encourage process improvement teams to compete for overall performance with mutually agreed metrics
7) Ensure the process improvements are aligned to corporate and supply chain strategies
8) Encourage benchmarking with the outside world
9) Cultivate positive recognition and reward systems
10) The journey of continuous improvement and innovation

It is important not to have education and training just to satisfy the annual hours required in the KPI of the Balanced Scorecard.

No comments: