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E-people: The role of human capital in enabling digitization of supply chains

Mareike Walter-Paschkowski, Regional Manager Middle East and Africa, Logistics Executive Group, discusses the impact of constant digital disruption on talent development and the workforce.

Organizations play an important role in ensuring that their industry is progressing toward advanced stages of digitization. They need to acknowledge where they currently stand and recognize the benefits of digitization. They need to shift focus away from access and set into motion plans and programs that focus on the widespread adoption and usage of technology. As chemical companies shift focus, there is an opportunity to leverage Big Data and advanced analytics to make better demand forecasts and pricing decisions. This could ultimately drive growth and improve margins. The petrochemical industry has embraced the benefits of information technology for many years – in design, process management and process modelling.

As early as 2005 Dow Chemical was using advanced analytics to develop freight and logistics cost models as well as raw material spend analysis. The ability of procurement teams to make better decisions when renegotiating contracts led to considerable cost saving benefits. However, maximizing the potential of Big Data requires new skills and ways of working, and acknowledging the need for these new skills is the first step. To generate the benefits cited above, Dow has recruited 10 PhDs in computer sciences supported by a team of advanced analytics experts to work alongside its business intelligence team.

While digital technologies continue to advance, the ability of people and organizations to fully use its capabilities have not kept pace. Besides digital innovations in products and services, such innovations may also include ways to improve human productivity. But bringing new technology into the workspace alone will not make a productivity increase. Instead employees should be engaged to re-think how work gets done and understand how technology can enhance rather than threaten their capabilities.

So, let’s look into some major challenges and opportunities for talent management arising from digital supply chains within the petrochemical industry. Evidence that digital technologies threaten jobs is everywhere. Robots and advanced automation have been common in many types of manufacturing for decades. A less dramatic change, but one with a potentially far larger impact on employment, is taking place in clerical work and professional services. Technologies like the Web, artificial intelligence, big data, and improved analytics—are automating many routine tasks. Countless traditional white-collar jobs, such as many in the post office and in customer service, will disappear.

Despite the layoffs, the labor shortage for craft workers such as welders, pipe fitters, carpenters, scaffold builders, and construction hands is still strong. Even with the oil crisis, skilled laborers are still in short supply and competition to get fully trained staff for projects is bigger than ever. This shortage will be tightened with increasing digitization in the industry as new skills will be required to manage and embrace the new technology.

Most Middle East petrochemical companies do not have world-class organizational and continuous-performance-improvement capabilities. Nonetheless, there are a number of proven approaches that companies can embrace. These include programs based on adult-learning principles that combine conceptual training with on-the-job learning and the creation of continuous-improvement training teams to enable a company to constantly upgrade its capabilities. In addition a number of successful companies have already invested in corporate academies to help build up a cadre of management trainees.

Companies need to get ahead of the curve, realize that many of today’s ‘best practices’ evolved under very different business conditions, and may well become obsolete within this decade. Managers exploiting current businesses develop mindsets based on what they have experienced in the past. These mindsets become further embedded in systems, structures, processes and cultures that are self-perpetuating. It is hard for managers, especially those who excel in the current system, to explore new uncharted terrain, and even harder to notice that some mindsets have lost relevance in changing circumstances that require exploring for new businesses.

Companies will have to get rid of obsolete knowledge and prepare the organization for new sources to grow. Most Middle East companies have already formed close partnerships with Western players to increase the scope. And some of these partnerships aim not only to develop and execute joint projects in the region but also to transfer capabilities.

Digital technology will give real-time data to the employees. Employees will be less depended on systems, locations, meetings and structures as needed information will be available anytime, anywhere (self-service software, mobile applications, wearables). They will be able to optimize operations with rapid, accurate and transparent data in real-time, as well as determine potential future issues and take action before they became widespread. With the help of digital technologies, employees can more accurately assess performance and variability – and improve decision making. In the future, employees will be focused less on administrative tasks and can focus more on tasks involving problem solving, creativity and innovation and risk taking.

Company culture and reputation have a big impact on talent attraction and talent retention. If something goes wrong within your culture – Twitter blogs and Facebook postings of employees or clients can create a worldwide awareness within a few hours or a few days. This can have a huge impact financially (stock price) as you scare of clients and investors but also from a human recourse perspective (current employees want to leave and new ones are not interested). A company culture that meets the values and aspirations of current and future employees, that fosters personal growth and transparency will win the competition in talent attraction and retention.

Incentives

As work becomes more creative and complex, motivation becomes more intrinsic and the balance of incentives, rewards and reinforcers grows more complex.  For organizations to realize their full value, workers should be given the freedom to innovate. Within reason, the emphasis should be more on encouraging measurable outcomes and less on the behaviors that might get them there.

Professional development

When it comes to preparing organizations for a complex, high-speed future many people will talk about continuous improvement of operations. But this is one thing, another is to be relentless about continuously improving the people who do the work. Have you ever heard of DDOs? Deliberately Developmental Organizations = it is about implementing an every ones culture that is about realizing organizational potential is about realizing human potential. It describes a new model for the way each can contribute to the other – how organizations and their people can become dramatically greater resources to support each other’s growth.

Agile and consistent leadership

The best performers are consistent. Consistent leaders set goals for themselves and their employees and they achieve them. People appreciate consistent management. On the other side of the spectrum leaders will have to be agile. Markets demand that companies and people adapt constantly. It is in the combination of consistency and agility that leaders become strategic, performing and organizations purpose with excellence but changing course when the situation demands.

Empower your employees

This requires some critical organizational and cultural changes. Everybody for example needs access to customer data and the analytics and visualization tools used to interpret it – information that is typically hoarded in a particular part of the organization. This democracy of data passes decision rights to many (instead of few middle managers). It is a top down approach that can only be managed by breaking down appropriate boundaries, giving teams permission to set new rules and provide a strategic framework to support this new order.

Risk Taking

If we expect a workforce to continually adapt to change, people will need to be open to taking risks. A fear of failure inhibits this process. Company culture and leadership style will have to support this. For most Middle East organizations this will be a major cultural shift!

About the author:

Mareike Walter-Paschkowski is the regional manager for the Middle East and Africa at Logistics Executive Group (www.logisticsexecutive.com). Ms. Walter-Paschkowski applies her expertise in the logistics and supply chain industry to identify and attract required talent and industry professionals. She is a certified PRINCE2 (Projects In Controlled Environment) Foundation and Practitioner, as well as an active and professional member of the ICF (International Coaching Federation) and an Associate Certified Coach (ACC).

 

 

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