How Workforce Management Can Help Combat Supply Chain Disruption

In March 2021, a huge container vessel called the Ever Given blocked traffic in the Suez Canal for over 6 days. The ship, owned by a Taiwanese firm and operated by an Indian crew, ran aground due to adverse weather conditions.

The incident caused supply chain disruptions across the globe, holding up cargo worth over $60 billion. But that is just a blip on the radar when compared to the impact of COVID-19 since 2020, or the continuing effect of the war in Ukraine on supply chains.

As the world gets more chaotic due to ecological, social, and political instability, businesses are increasingly turning to technology for answers. But to effectively deal with supply chain disruption, you need to combine digital solutions with more effective workplace management.

What is supply chain disruption?

A supply chain is the complex interplay of entities, technologies, facilities, and transportation infrastructure that enables businesses to buy, create, and sell products/services. In the modern era, supply chain networks have evolved to span the entire globe.

Supply chains facilitate the free and uninterrupted movement of goods. Any event that blocks this flow of products and materials can lead to supply chain disruptions. The lockdowns imposed by COVID-19 is an excellent example.

What are the various ways in which a supply chain can be disrupted?

Global supply chains allow companies to tap into new markets and unlock new ways to economise production. But on the flip side, the quantum of risk related to disruption is also vastly increased. Many factors can cause global supply chain disruptions:

• Natural disasters
• Pandemics
• Catastrophic accidents and mishaps
• International trade conflicts
• Regulatory changes
• Cyber attacks
• Political/social instabilities
• Major price fluctuation

Given enough time, supply chain disruptions can have a devastating impact on businesses, leading to lost sales, production delays or shutdowns, product quality issues, reduced customer satisfaction, loss of brand image, unsold inventories, and lost revenues.

According to a GEP survey, European and US businesses suffered an estimated $4 trillion in revenue losses in 2020, due to supply chain challenges created by COVID, the US-China trade war, and cyber-attacks.

New approaches to supply chain risk management

Traditionally, organisations relied on historical data to predict the likelihood of future disruptions. Supply chain risk management strategies were based on available historical data. But with the rise of unprecedented events like the climate crisis and pandemics, this approach is no longer enough.

As supply chain disruptions can affect ordinary citizens, governments are stepping up to the challenge. In 2021, the Biden administration created a task force involving both the US federal agencies and private corporations to explore new ways to improve the resilience of American supply chains.

In India, government-backed initiatives like 'Digital India', 'Make in India', and GST reforms are steps in the right direction. But more concerted efforts that directly address long-standing concerns with internal and external supply chains are needed.

Investment in supply chain 4.0

While government work at the policy level, there are several other steps you can take to make your company more resilient to supply chain disruption. Perhaps the most critical of all is the adoption of digital technology.

Supply Chain 4.0 involves the harnessing of digital technologies like the Internet of Things (IoT), Artificial Intelligence, Big Data Analytics, and blockchain solutions to transform and modernise supply chain management, making it faster, more efficient, agile, and more accurate.

Example – How IoT Can Disrupt Supply Chains

IoT is central to the implementation of the ‘4.0 paradigm’ in industry and supply chain management. Using a network of embedded smart sensors and other connected devices across your logistics network, you can gain unprecedented visibility over your entire supply chain. The tracking data can be used to improve efficiency and make your logistics networks more resilient to unexpected disruptions.

Importance of workforce management for supply chain 4.0

The transition to Supply Chain 4.0 is a form of digital transformation, which is usually a multi-year process. According to the Harvard Business Review, the human element is critical for any digital transformation project.

Preparing your workforce for the increased rigours of a digitally enhanced workplace and logistical processes is not easy. Your HR managers will have to oversee the three Rs: 

• Retaining existing talent, particularly individuals with high-level expertise and experience in digital technology
• Recruiting new talent, in critical areas like data science, IoT, and coding
• Retraining and reskilling your existing employees to augment capabilities and shore up any gaps

To handle this level of churn in the organisation, the HR department requires enhanced capabilities of labour forecasting, budgeting, scheduling, and employee performance management. This can be achieved by deploying workforce management tools, either as a part of an HRM suite or as standalone software.

Addressing the challenges in the labour market

While workforce management frameworks can help in boosting the productivity and facilitate the retraining and re-onboarding of existing workers, hiring will remain a concern. For any 4.0 transformation, you need tech talent in critical fields.

At least 74% of employers in India are already worried about talent shortage and face challenges in filling vacancies. A recent Nasscom-Zinnov survey projected a shortage of 14–19 lakh employees in tech fields by 2026.

Investment in new technologies that can reshape the hiring process can provide some respite. But going forward, securing top tech talent will not be easy. Along with digital tools, you will need well-crafted strategies to address the issue.This white paper from Indeed will provide you with further insights into the current state of the Indian tech labour market and best practices to follow in recruiting for Supply Chain 4.0.