Aligning Capabilities to Strategy

Changes in international supply chain management and logistics as well as the South African education and training environment have shifted the ways in which we operate in these environments irreversibly and forever.

There are tremendous threats – the required competencies are costly, both in terms of money and expertise, but to carry on as before may see substantial loss of business.

As a measure of the efficiency with which our company is doing it might be instructive for us to look at some key ratios over a three year period:

• Business lost to business gained in Rand turnover terms;
• Amount of administrative penalties imposed to amounts disbursed on statutory imposts such as VAT,import duties and the like;
• Amount of storage, rent, overstays and/ or demurrage paid to the total freight bill;
• Amounts written off due to errors to total turnover.

An increase in any one of these of these is a critical indicator that something needs to be addressed in the way in which the skills needs in our company are being addressed, so read on.

• Experience with many companies shows that there are a number of ways of in which they try to make sure that they have people who are competent to carry out their respective functions:
• Poaching staff who appear to have the right experience and/ or training from competitors
• Existing job holder shows the “newbie” how things are done;
• Experienced staff hold training sessions as and when the need arises;
• Sending people on external courses as either they (or their supervisors) feel the need;
• Organising training for different sections of the organisation which is applicable to their particular function (payroll, marketing, Excel and so on).

I would like to suggest that whilst all of the above methods have their place, each one has some critical risks:

• How can we be sure that our opposition is not overjoyed at our taking a real dud off their hands (normally this only becomes apparent much too late)?
• Is the existing job holder going to be that willing to share their expertise, or will they be passing on their bad habits?
• Can the experienced staff member really train, or is s/he simply an experienced individual with little ability to transfer their knowledge and skills?
• How do we know that the courses on which we spend substantial amounts of money are really needed, or simply nice to haves?
• When we send people from our company on training, how can we be sure that each of them has gained maximum benefit from that training?

There is a better way which is a great deal more cost effective and which does not require any rocket science.

It starts off with the simple concept, “begin with the end in mind”.

Each of us has a vision of where we want our business to be.  

Once you are clear on your ultimate goal or destination, the next step is to determine what actions on the part of the team will be most effective in getting you there.

For companies involved in international supply chain and related logistics operations, a good way of looking at competitiveness is through a supply chain congruence model:

   

In terms of this model, the higher the congruence, or compatibility, amongst these elements, the greater the performance of the organisation.

So, for the people element, their development requires a structured approach and methodology focused on aligning their capabilities to your organisation’s supply chain strategy.

How we structure this approach is key and will be discussed in future posts.

In your experience, is there more of a need to train staff than was the case in the past? If so, why do you think this?

How about the quality of work being produced by today’s supply chain practitioners? 

Would you say that this is improving or do you think that it’s going backwards?