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Supply Chain Insights

How to Prepare for the Great Resignation

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According to Aaron McEwan, a recent survey by Gartner predicts that in Q1 2022, Australia will be facing a similar event as the US now dubbed “The Great Resignation” – where one in three Australians will be looking to change roles.

The economy has shifted from an “employers market” early in the pandemic to an “employees market” today. Some 18 months ago, employees were stood down, faced a reduction in wages, had workdays cut, benefits taken, and very little received commissions or bonuses. Many employers had to for legitimate reasons, but others joined the “Managing through a Pandemic Conga Line” because it enabled them to create more profit at the top end whilst reducing costs. Besides, with so many redundancies and volatility in the market, no one was going to move jobs – at least they thought.

The supply chain sector was one of the hardest industries hit, with descriptions of the industry focused on “an unstable labor market which is negatively impacting the trucking industry and crippling the system of moving goods.”

Just under two months ago for example, 7000 drivers around Australia protested for better working conditions at one of Australia’s largest 3PLs, causing even longer delays on deliveries across the country.

Today, supply chain workers are becoming increasingly frustrated and overworked, so what can we expect to see more of in 2022?

Make it rain

There’s no denying that in the last two years Supply Chain and Technology have been two industries that have boomed, not just when it comes to demand of goods and services but expertise to deliver on that demand as well. Dealing with experts directly in these fields we have noticed a huge increase in candidate salary expectations, most wanting upwards of 30% to even consider looking at another role.

Two years ago, you could easily find WMS Specialists with a budget of $80,000 to $100,000 – now however, it’s a very difficult task to attract candidates with a budget less than $120,000. This is very similar for Warehousing and Operations Managers who you could previously find between $70,000 and $90,000. Lately however, many at this level will only consider roles above $110,000.

With the current labour market in shortage and resignation levels expected to rise, we predict employers with bigger pockets will be willing to provide unprecedented increases to secure top talent. Especially so if they are facing distressed supply chains. However, this doesn’t mean that companies won’t be able to compete with other offerings.

Watering your own yard

With a need to retain IP in a tight labour market, we expect to see more employers look at how to improve career planning and succession internally to ensure adequate support and training for workers to move up the ladder.

We are starting to see a number of leading organisations invest heavily in graduate programs, offering financial support for further tertiary education studies or providing retention bonuses to ensure continuity.

Flying unicorns

Now that the borders will re-open and travel restrictions are said to ease; overseas talent will be more accessible.

For omni-channel and eCommerce focused Supply Chain roles for example, we expect to see a surge in talent from the US, India, Asia and the UK arriving – bringing years of experience in an area that only few Australians seem to grasp well and many Australian companies still need.

Prepare for the talent crunch today

What can businesses do in preparation for the impending talent crunch?

  • Leverage your internal team with a candidate referral program
  • Initiate your internal career development plans
  • Partner HR with Marketing to create and promote your employer brand
  • Create easy to read, clear and concise job descriptions
  • Market map a talent pool or hire an external party to do this for you
  • Ensure you are set up with a good Talent Management System and process
  • Create a great experience for candidates
  • Ensure your salary bands are competitive in the current market
  • Create more compelling culture boost initiatives

HR staff will need more PR and marketing skills than ever before as it won’t be just about creating these initiatives – it will be about communicating them. Everyone says they’re flexible – but what does flexibility mean in your business? Remote working options for desk-based work, working four days a week and getting paid for five? What initiatives will set your business apart in a competitive hiring field to help attract the best talent?

It’s safe to say that those decision-makers with a longer-term view who skipped the train may be reaping the benefits very soon – for employees, the next few months will be a time of broad re-evaluation.

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Supply Chain

bp and Uber sign Global Strategic Delivery Partnership

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  • bp and Uber sign a new global strategic convenience partnership aiming to make more than 3,000 retail locations available on Uber Eats by 2025.
  • The partnership extends current local arrangements in Australia, New Zealand, Poland, South Africa and the west coast of US, adding the UK and eastern US in 2022 and with plans to launch in other European markets from 2023.

Today, bp (NYSE: BP) and Uber Technologies, Inc. (NYSE: UBER) are announcing a new global strategic convenience delivery partnership, extending their existing local arrangements to reach more consumers across the world. Together, the partners will offer a huge range of quality convenience products, including fresh and prepared ranges, from select retail locations.

bp is the first convenience retailer to team up with Uber Eats on a global level and aims to have more than 3,000 retail locations available on the delivery platform over the next three years. The partnership supports bp’s goal of growing its access to customers and expanding its delivery footprint, in response to soaring demand for food, groceries and everyday essentials brought to the door.

The new partnership covers retail sites in Australia, New Zealand, Poland, South Africa and the west coast of US. Sites in the UK and eastern US will be added to the app for the first time this year, with plans to launch in other European markets from 2023.

“We’re thrilled to team up with Uber Eats globally giving us the opportunity to reach many more consumers online in addition to those who currently visit our retail sites. We’ve seen how the pandemic has accelerated customer demand for delivered convenience and this partnership will allow us to scale up quickly on the Uber platform. And for the first time, we will be able to offer delivery options to existing customers on our own BPme app by the end of 2023,” said Emma Delaney, executive vice president customers & products, bp.

With 20,500 bp retail sites across the world and 550 million customers living within 20 minutes of a bp retail site, the partners see enormous opportunities for growth. bp sites offer a range of products tailored to local markets which may include hot and cold drinks, food-for-now options as well as staple groceries, fresh produce and ready meals, plus wine, beer and flowers.

  • In the UK, customers will be able to access a range of Wild Bean Café, and other branded food and products via Uber Eats – with the first 120 sites due live on the platform by the end of June.
  • In the US, the offer will be made available to bp’s network of independently owned retail locations to support the growth of their businesses. The goal is to make it easy for these partners to sign up to the Uber Eats platform and access benefits based on bp’s scale.

bp will benefit from Uber’s global brand and operations footprint, best-in-class technology for dispatching orders, and more than 4.4 million drivers and couriers on the platform worldwide.

As part of the agreement, Uber Eats and bp will work to introduce delivery options onto bp’s own app, BPme – initially planned to be available in the UK, US and Australia by the end of 2023 – powered by Uber Direct. This new offer will allow bp to directly connect its customers to delivery riders, making Uber Eats the trusted partner in fulfilling these orders. Since 2019, bp has seen a three-fold increase in users of the BPme app, with 16 million active loyalty users worldwide.

“With more than 20,500 locations around the world, bp’s reach is enormous—making them critical partners as we pursue our ambitions of helping consumers across the world get what they need delivered to their doorsteps,” said Pierre Dimitri Gore-Coty, Uber’s SVP of Global Delivery. “We are proud to support this next phase of the company’s convenience growth through this delivery partnership and look forward to deeper collaboration in the future.”

bp and Uber already work together in mobility with bp providing electric vehicle charging for Uber’s ride-hail drivers. The companies will explore other areas for future cooperation in convenience, including opportunities to utilize low carbon delivery methods to fulfill orders from bp sites.

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Supply Chain Insights

Officeworks to own and control Distribution Network.

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Officeworks invests in supply chain capabilities, will own and run it’s distribution centre.

Officeworks has changed its supply chain strategy in the wake of COVID-19 issues, with a view to owning and controlling a network of distribution centres across the country.

“When I joined we had a different strategy around our supply chain,” Officeworks managing director Sarah Hunter told The Australian, referring to the company’s previous outsourcing strategy.

“So we’ve worked really hard now to build our supply chain capability. We were in the process of outsourcing it, we are now in the process of building that capability.

Officeworks recently opened Australia’s first solar-powered robotic distribution centre in Derrimut, Victoria.

“We started in Victoria, and we have had approval to build, now board approval to invest, and we are building a new, similar (distribution centre) operation in Western Australia. That’s exciting,” she said.

“Looking at our capital expenditure three, four, or five years ago it’s a material step up in our investment in our supply chain.

“Most importantly for us as a business is that every team member who worked at the old facility has been completely retrained,” she said. “We have 120 team members who are now fully trained in how to work in an automated state-of-the-art environment.”

The need to control its own distribution became clear during the pandemic.

By December, Officeworks saw 46 per cent of its business come from online, including click and collect. Now it needs to move to retain this growth at a cost effective scale.

“We have created a facility that’s not only more productive, it’s going to enable our online business to grow in Victoria and into NSW at the rate that we expect our online business will grow.

“So now we have the capacity, the cost per pick is materially lower because it’s much more productive. It’s a win-win scenario for us. We’ve kept everyone employed with really great job security. We’ve scaled them up to work in the supply chain of the future.

“And on top of that, we now have the capacity for growth in Victoria that frankly we were struggling with through COVID.”

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Business Continuity

Skills shortage puts SAP projects on hold

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Business demand creates double whammy on recruitment pressure

Skills-related issues have hit a quarter of SAP users, in some cases putting projects on hold, according to a survey of companies in the Americas.

Research released by the Americas’ SAP Users’ Group (ASUG) shows that 26 per cent of organisations see skills in supporting, developing, and upgrading SAP systems as their number one challenge in working with the technology.

A quarter of users loyal to the German vendor said skills problems were holding up projects.

Geoff Scott, ASUG CEO, told a webinar last week that the combination of skills shortages in businesses and their technology teams created a vicious cycle of driving the demand for new tools and technologies.

“Business functions come and say, ‘Hey, I need to have all these things done.’ And technology teams say, ‘Well, I don’t have the same skills I used to have.’ And I think it creates a major disruption inside many of our member companies,” he said.

Skills were also a major issue for SAP users looking either to migrate to or support S/4HANA, the latest version of the tech giant’s ERP software based on an in-memory database.

“We are going to feel the pinch of that skill gap. My word of caution is that as you think about moving to S/4 if you have not already, the ability for you to plan that migration may hit some turbulence related to skill gaps with your external partners. That’s something that you absolutely positively should consider,” he said.

While technology issues were the greatest concern in the research overall, broken down, only integration problems were more cited than staff turnover and maintaining knowledgeable staff.

Of those with integration problems, 28 per cent said they were causing data errors to spread, 17 per cent said they were affecting the compatibility between SAP and other applications, and 17 per cent said it meant they were unable to keep up with new technologies.

One respondent said: “Changes made in SAP and Salesforce that do not get reflected in the other system are causing data inconsistencies.”

Overall, the majority of SAP users were increasing their spending on the technology. Fifty-two per cent said they were increasing spending, up from 46 per cent last year.

However, the proportion of users saying they were cutting spending on SAP also rose from 5 per cent last year to 8 per cent in 2022. The number of organisations making the same level of investment fell, according to the ASUG research.

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