We are sure that you are thinking about what does the HR department has to do with supply chain management. Let’s find out:
Firstly, the HR team of the workplace is responsible for finding the right people for the office. This means that they are also responsible for finding supply chain management staff.
Secondly, the HR team also has to find freelancers, contract workers, and other external stakeholders who may be involved in the supply chain management process. To achieve this, the HR manager has to ensure that they hire the right employee, as hiring the cheapest one is certainly not the answer to the situation.
Thirdly, every organization wants people who can offer high-quality to the system. To ensure that the employee will be able to offer high-quality work, the HR needs to assess the supply chain knowledge of the employee. For that, the HR team often spends some time understanding about the services and products that are released in the market.
Keeping all these factors in mind, we will move forward to understand how the supply chain can impact the HR department and how HR can seamlessly integrate it with the recruitment of the business. Dive in and start exploring further.
What HR Should Know About Supply Chain Management?
The supply chain is evolving continuously but the only aspect which is pulling it back is the shortage of qualified professionals who can manage the end-to-end working of the supply chain. Hence, the human resources department may be called upon to find people who can access and utilize technology in this field.
Consider the fact that a decade back, the technology that was utilized for supply chain management was excel sheets or a structure somewhat similar to it. However, today, we are living in a different world and supply chain is managed through advanced tools using sophisticated technology such as algorithms or machine learning. These algorithms help the supply chain manager to understand the requirements based on product lines, access regions, suppliers, factories, market patterns, etc.
Here, it is also important to understand that the method of collaboration has also changed. Earlier, most of the communication was carried over the call such as asking if the supplier wants to commit to a particular forecast. Now, there are automated tools such as AI, machine learning, cloud technologies, XML, web services, etc.
Hence, looking at the demand for supply chain management, human resources need to incorporate people who know how to manage and handle this structure with minimal supervision. It is not possible to hire someone, train them for three months, and then start the actual working. Of course, many organizations do that but only when they don’t require a supply chain manager immediately.
What is Supply Chain Management?
Usually, the supply chain contains two components explained below:
The supply chain handles the services and goods management, product, flow, and information related to these services and goods. This includes handling work-in progress, raw material, and finished goods that traverse from the distributor or supplier to multiple manufacturing units. The process also involves tolling, contract manufacturing, logistical services, and co-packing.
The supply chain professionals or managers have several responsibilities such as long-term planning, inventory program execution, supply quality, work-in-progress, delivery, replenishment, finished goods, etc. Following are the key performance indicators:
- Efficiency of the inventory (inventory aging, days inventory, measured inventory turns, etc.).
- Customer service (revenue upside, deliveries, stock outs, etc.).
- Quality of inventory and finished goods.
- Productivity of the team.
The other area is related to buyers, commodity management, and direct procurement. This also includes contracting and sourcing of raw materials and related services such as co-packaging, contract manufacturing, tolling, logistics, etc.
Here, the supply chain manager is expected to analyze whether to build the components or utilize a supplier for the same. Following are the key performance indicators:
- Cycle time.
- Materials cost.
- Supplier quantity.
- Team productivity.
- Supplier risk.
Recruitment for Supply Chain Management
It is necessary to understand that the human resources department of the business is directly or indirectly related to the supply chain. When the supply chain of the organization is adopting cloud management or any other related software, it is imperative to train the workforce. Something, that is solely the responsibility of the HR.
Before any change that is made in the supply chain, the HR is expected to ensure that the existing employees are well-equipped to adopt this change. This is so because of two reasons:
Firstly, you can’t hire all new people to adapt to the change or to adjust to new requirements. You need the experience of existing employees and for that, you need to train and fully-equip these employees for the change.
Secondly, even if you hire new staff, you need to give them some level of training. Of course, you don’t have to spend months on the training of the employees but you can spend a week to help the employee adjust to the process. This orientation should be effective to improve employee performance.
Supply chain management may be a different department of the business but it falls under the human resource department. In fact, every sector of the business is the concern of the HR team. This is because the HR team has to hire these professionals and look after their training, development, and satisfaction. So, in that sense, HR is deeply involved in supply chain decisions.