A recent DC throughput evaluation project gives us a firsthand look at a typical retail merchandise situation that suggests a supply chain talent gap may exist.
The client was a growing retail discount company that has grown their retail store network rapidly over the last several years, expanding in deliberate geographic chunks. Their bread and butter is seasonal merchandise that appeals to the younger generations, and as a result, their continued growth is very much dependent upon making the sale during those seasonal peak periods. But this past Black Friday–Christmas season, they hit an unexpected wall when sales fell short of expectations. Why? The flaw in their supply chain appeared to be within the four walls of the DC.
Upon close examination of process flows, and from one-on-one interviews with both DC upper management and front-line managers and supervisors, it became clear that there was a wide gap in depth of experience, and a significant lack of the “right” supply chain talent and skills to effectively run the DC. By and large, the front-line managers and supervisors were young, and their experience ranged from almost none up to no more than 10 years. While many had come from other retail organizations, none were prepared to deal with the most basic of job challenges when they learned that their current employer:
⦁ Lacked the WMS software capability to handle the door-to-door flow of merchandise through the DC (necessitating manual and spreadsheet tracking, scheduling, etc.)
⦁ Employed a traditional plan to handle increased and peak volume flow through the DC by “just adding more bodies” (without adding additional front-line supervision or considering the limitations on span of control for those supervisors in the functional areas)
⦁ Had NO HR function or program to facilitate development of a pipeline replacement program when managers and supervisors left the company (this was especially evident by key positions having been left vacant during the most recent seasonal fiasco). The net result was that the seasonal push of merchandise through the DC virtually ground to a halt, and with it, the effective generation of operating cash flow, the life blood that fuels the continued growth of any organization.
The bottom line: the DC management and staff lacked the depth of experience to “see” these problems coming, and lacked the resources and assets to effectively deal with the situations they encountered. Had the company had the foresight to hire and employ seasoned management with depth of experience in retail, people with the right skill set and depth of experience, who knew how anticipate rather than just manage, the situation might have turned out much better than it did.
Yes, Virginia, there is a supply chain talent gap! But it is incumbent upon executive management to have the depth of experience to understand what it takes to staff and run an effective end-to-end supply chain if their organization is to thrive and survive!
PS: To their credit, the young front-line managers and supervisors who encountered this challenge were motivated to seek out solutions to the best of their abilities, considering the handicaps they had to work with. Kudos to them.