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When supply chain efficiency can’t last

by Alastair Pennie

Warehouse

Speaking to Supply Chain leaders consistently over the last few months, it is no surprise some businesses are absolutely thriving at the moment. However, it is not without having to make some tough decisions leading to redundancies.

What we know so far

A number of grocery and consumer goods businesses have reported quarters over 100% above target with the norm around 20%-30% up. There are plenty of service-based companies who have shed hundreds, if not thousands of jobs as we find ourselves in a two-speed economy again for very different reasons.

The one thing that is consistent across all businesses that I’ve spoken to is that the strive for efficiency is more heightened than ever and broader economic concerns mean that even the winners during Covid-19 are still cautious about investing in the future.

What can we learn from the past?

During the Global Financial Crisis similar patterns to the ones we are seeing today emerged. Whether it is being lumped in with a global business that is struggling overseas but maybe thriving in Australia or simply being cautious on the cost line, resources are being spread thin when volumes are possibly more than expected.

It is becoming a common topic of conversation with Supply Chain leaders that the days are getting longer and the team is busier than ever. In a world where scenario planning can take up as much time as what actually has to be done, is this situation sustainable?

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As a recruiter we saw in the GFC that candidates started coming to us looking for new opportunities where maybe they could work under 50 hours a week, see their kids and have more healthy work-life balance. The exact same is happening now.

What can we learn from the present?

Surely one of the lessons Covid-19 has shown us is that Supply Chain needs to be part of the strategic foundation of any business and more investment is required. Investment in systems, investment in understanding how supply chain can be a strategic differentiator and investment in the people.

Take it from me, if you’re a leader in Supply Chain, your team is potentially running on fumes and although keeping an eye on costs is important, life will be a lot harder if your colleague has to take long term sick leave due to stress or you have multiple leavers in short space of time.

It’s time to embrace one of the positives to come out of Covid-19 and that is that people have enjoyed working from home and realise they enjoy part time or contracting work as it gives them more balance in their lives. In my view, if you’re not considering a contractor to support your overburdened team you could quickly find yourself in a much trickier position!

Speak to our specialist supply chain recruitment team today.