Digital disruption of the retail supply chain: is your workforce ready?

Last week I had the privilege of presenting at the Weave Supply Chain 360 conference #weaveconference in Hong Kong, which brought together a line-up of international speakers to discuss the challenges facing modern retail.

My focus was on the digital transformation taking place in retail supply chains – which we all appreciate has now disrupted the retail model irreversibly – and more specifically, how organisations should manage their digital transformation journey from a workforce and talent perspective.

We already see the leaders in digital supply chain making use of technologies ranging from cloud computing, robotic process automation and Big Data analytics through to machine learning, artificial intelligence, 3D printing and block chain. However what does this mean for the human capital demands of these businesses, and how well-prepared are the majority of retailers both to transform and to meet their new talent requirements?

At Proco Global, we focus exclusively on the recruitment of supply chain talent around the world, and the retail sector is one of our key markets. That is why, at the start of this year, we conducted a survey of around 200 of our top-level contacts within the retail industry across Asia. We targeted businesses across a wide spectrum from Luxury, Fast Fashion, Hypermarket, Specialty Retailers and E-commerce and from retail operators, buying and sourcing offices and manufacturers to understand how digitalisation was affecting their workforces, and whether they had a plan in place to cope with transformation.

The findings were enlightening. In the short term, the most pressing concern for our respondents was speed to market and the need to shorten lead times to customers, followed closely by cost pressures and talent shortages. In the longer term, respondents believed that digital technologies would have the greatest impact on supply chains, followed by rising costs.

Interestingly only 53% of respondents said that digitalisation would have a broadly positive impact on their business, suggesting that many have yet to experience any benefits. Furthermore, one of the most alarming findings was that 40% of respondents did not yet have a strategy or roadmap in place to manage the digital transformation of their business, and nearly half lacked a workforce strategy.

Our investigation also reveals that there appears to be a clear deficit of leadership knowhow on how to take traditional retail businesses through a digital transformations journey. This ‘new retail’ model requires a completely new style of leadership, willing to challenge and disrupt traditional models and capable of harnessing technologies in order to do so.

It is now essential that a culture of entrepreneurship and experimentation be nurtured across supply chain functions, and that the supply chain leader has sufficient influence at Board level to drive digital transformation from the top.

There is much research showing that the challenge of digital transformation is not one of technology, but of a cultural transformation involving changing hearts and minds. Becoming a digital organisation requires new tech-savvy leadership that is better able to connect people, processes, data and things along the whole value chain.

Traditional business mind-sets are good at planning, driving best practice and navigating hierarchical organisations, where relationship building and influencing skills are key. In contrast, digital mind-sets are incessantly experimental, deeply analytical and thrive on ambiguity.

The implications for the supply chain talent pool are stark. The competition for talent is already fierce, but the next generation of tech-savvy supply chain leaders will boast entirely different skills and will look for much more from their employers in return. Not only will recruitment methods need to change, but also priorities.

Success or failure will depend on human capital attraction and retention alongside inspired leadership, and only when businesses can successfully empower more agile, innovative and technically savvy professionals will any digital transformation become a reality.

Please reach out to me directly for more insights around digital transformation in retail and how your business can prepare for the journey ahead.

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