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Workforce in supply chains: Skills and labor shortages test companies

Insights from the PwC Digital Trends in Supply Chain Survey 2022

While businesses across sectors continue to wrestle with the challenges of these tightened supply chains, maintaining and strengthening operations — particularly retaining talented and knowledgeable employees — has emerged as a key focus. But it’s not just a question of having the right talent and capabilities. Leading companies are also evaluating whether they have the right technology to back that up.

In our PwC Digital Trends in Supply Chain Survey 2022, we polled 244 global operations and information technology leaders, including supply chain professionals, CHROs and other C-suite executives, to gauge the current state of supply chain infrastructure and workforce, as well as their strategic challenges, opportunities and plans for the future. Businesses surveyed covered both publicly traded and private companies in sectors such as aerospace, automotive, chemicals and other manufacturing and industrial products; consumer markets and retail; energy, utilities and mining; pharmaceuticals and life sciences; and technology, media and telecommunications.

Across industries, most companies reported being satisfied with the talent in their supply chain operations and their investments in digital skills. However, similar to other parts of the workforce, supply chains have still seen increased employee turnover. That aligns with the results of our recent PwC Pulse Survey, in which 44% of chief operating officers and other operations leaders told us worker shortages and employee turnover would be one of their biggest operations challenges in 2022. To capitalize on talent investments, businesses must prioritize retaining and expanding a digitally capable workforce.


Upskill your workforce, upgrade your systems

Digitally upskilling your workforce

Fewer than two-thirds of respondents told us their supply chain teams currently have the necessary digital skills to meet future goals. Just 23% completely agreed that they did.

While that represents a healthy majority of business leaders feeling comfortable with their supply chain talent, the overall trend continues to be one of deeper investments in digital skills. As the workforce changes due to the digitization of the supply chain, more than a third (34%) of those surveyed anticipate the need for minor to moderate employee training and upskilling. Moreover, fully half anticipate a need for “significant” digital upskilling in the near future.

Amid rising costs and heightened turnover, only one in five leaders list digital upskilling of their employees as a top-three priority in the coming year. This may prove short sighted. One in four of those same leaders say their employees currently lack adequate digital training. 30% are concerned with the difficulty of getting existing employees and teams to work together differently in an all-digital space. And another 23% expressed great concern over attracting, training and retaining the “digital native” talent they view as essential to future supply chain transformation.


Digital upskilling and a growing workforce are the new prevailing winds


We anticipate the need for significant training and upskilling on digital skills
%
We anticipate the need for minor to moderate training and upskilling of employees
%
We will need to add more employees overall than we have now
%
We will need fewer employees overall than we have now
%
We plan to increase our overall reliance on outsourcing
%
We plan to reduce our overall reliance on outsourcing
%
We will retrain employees for different jobs because their current role will no longer be necessary
%

Q: In which of the following ways do you expect your workforce to change due to the digitization of your supply chain?
Source: PwC Digital Trends in Supply Chain Survey 2022, base 244

Key takeaways

  • Plans to grow workforces are almost twice as popular than plans to reduce. Versatile and flexible digital natives will likely continue to be an especially high-value investment.
  • Reliance on outsourcing will likely increase in the near term for almost twice as many businesses as it decreases.
  • Making digital upskilling fun and rewarding — through gamification of learning tools or spot rewards, for example — can drive the needed cultural shift for your existing employees.

Retention and expansion during a workforce shortage

More than half of these business leaders say they're seeing higher than normal supply chain employee turnover, while less than a fifth are experiencing lower than average rates. As a result, a full 41% of respondents anticipate needing to add more employees than they have now.

68% of COOs say hiring and retaining talent will be very important for their company’s growth in 2022.

Digitization is on the rise, even as turnover remains high
Q: Using the scale provided, please indicate your agreement with each of the following statements regarding your current supply chain workforce.
Q: In which of the following ways do you expect your workforce to change due to the digitization of your supply chain?
Source: PwC Digital Trends in Supply Chain Survey 2022, base 244

Key takeaways

  • While the hiring market already shows signs of cooling elsewhere, skilled and digitally savvy individuals will continue to be in high demand for the foreseeable future. To leverage your existing workforce, consider introducing or expanding your use of digital decision support tools and workflow automation. This can mitigate risk and lower the technical experience needed to operate routine supply chain planning and execution activities.
  • These tools drive improved visibility, issue flagging and action orchestration, all while reducing your need for replanning and expediting. This won’t just improve performance. It can also reduce potential areas of job dissatisfaction and attrition rates among your staff. Plan out and clearly communicate a roadmap for adoption and value creation of these tools, building a focus on employee experience as much as the customer one.

Upgrade systems, not just your people

Business leaders are upskilling and upgrading not just their workforce to meet immediate demands but their infrastructure as well. While large-scale transformative initiatives have been more likely to distinguish a company from its competition, 80% of respondents say they have not yet fully realized their technology investments.

Many existing legacy systems are simply not capable of providing the visibility and agility companies require to deal with the new realities of supply chain operations. More than two-thirds (67%) of companies across supply chain functions plan to review, upgrade or replace existing technological infrastructure within the next 12 months and less than a third don’t plan to do any of the above. Anticipating changes or upgrades to existing systems varied between three and four times more popular than full-scale replacements.

Knowing that existing systems may soon go unsupported or be otherwise unable to deal with increasingly complex issues — like those already being handled by AI-driven platforms and cloud solutions — 21% to 23% of industry leaders across all sectors already plan to review current infrastructure and evaluate their options. A successful digital transformation (both ROI and acceptance) is not an easy transition and requires planning and the right partner.

Key takeaways

  • One in five supply chain leaders are currently weighing their existing systems against alternatives. Two out of three are already adopting plans to review and upgrade. If you haven’t already, it’s probably time to consider how your organization could benefit from upgrading to scalable, cloud-based technology solutions and automated decision-making tools.
A majority are planning or considering changes to supply chain systems

Where you go from here

Successful companies foster a culture of change and collaboration, switching focus from function-centric activities to tech-enabled, agile, outcome-focused planning. Here are a few tips that can help you more comfortably grow both workforce and infrastructure simultaneously.

  • Think ahead. Map existing roles against future states. You may also want to orient all open positions to require some level of digital experience.

  • Deeply engage senior managers to get them comfortable with digital language and tools like the use of visualization-based performance metrics.

  • Try hosting listening sessions with staff to uncover specific pain points that can be resolved through better data presentation or analytic insights.

  • Consider employing outside low-code experts or “digital ambassadors” to kickstart change.

  • Make it a group effort. Think about implementing all-staff internal marketing campaigns, kickoff celebrations and deployment milestones for new digital tools.

As external and internal influences continue to reshape how we build and maintain our supply chains, it’s clear that over-reliance on old ways of doing business must give way to more innovative, collaborative efforts. Click here to learn more about how PwC is driving business transformation.

Methodology

The PwC Digital Trends in Supply Chain Survey 2022, fielded November 2021 to January 2022, surveyed 244 operations and information technology leaders, C-suite executives and other supply chain officers from companies in select supply chain-intensive sectors to assess how they are addressing supply chain management operating models, including the use of enterprise and emerging technologies. Sectors surveyed include aerospace, automotive, chemicals, and other manufacturing and industrial products; consumer markets and retail; energy, utilities and mining; pharmaceuticals and life sciences; and technology, media and telecommunications.

Contact us

Matthew Comte

Matthew Comte

Operations Transformation Practice Leader for Consulting, PwC US

Meghan   Murray

Meghan Murray

Sourcing & Procurement Leader, PwC US

Brian Matthew Houck

Brian Matthew Houck

Connected Supply Chain Leader, PwC US

Rafael  Lander

Rafael Lander

Operations Strategy Leader, PwC US

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