Home > Leadership, The Monday Musings Column > How resilient is your supply chain? It’s only as good as its people.

How resilient is your supply chain? It’s only as good as its people.

Supply chain resilience is a bit of a favourite theme for me. Being Swindon based I am very conscious of our local car plant where we turn out fine Honda models for folks to enjoy. Now Honda suffered with events in Japan a while back and short term working was a fact of life, not just at the plant, but for the sub component suppliers, logistics businesses and several others locally who feed to lines.

Recently things were looking brighter and, with a new model due out, Honda went back on to an 11 day fortnight to catch up and that pulled the supply chain along with them. All looked bright, but then another tsunami rolled across the Pacific waters and the resulting flooding in Thailand knocked out the supply of electronic components. Last week was down three day working instead of six, and next week looks like three half days instead of five full ones.

I bang on here about it being the people that count in business because, bottom line, without people nothing much will happen. Now most of the people affected by the events at Honda are on some form of flexible working package that helps to smooth out these sorts of fluctuations and so there is some resilience even if it does lead to an element of disgruntlement; catch up often means working for no extra pay (or that is how it is perceived) and the disruption to families can be considerable.

But there is also an element of these working groups that is sourced from the agency pool. Here there is a different impact in that no work means no pay. Now if you have some agency people trained up and working effectively to contribute their part of the supply chain, telling them that they are only wanted for three half days next week is a hard hit and, if they can get five days somewhere else, they are going to take it. And you might not get them back.

When we are making purchasing decisions on the companies that we will engage as part of our supply chains we look at all sorts of factors to determine their resilience; financial, technology, physical resource, quality, process, standards, the list goes on, but the crucial part of holding things together often rests with a small group of people who turn in and ply their trade as a form of mercenary band.  Labour for hire, sometimes of questionable quality, but there is a hard core of grafters in any town and these are the backbone of the local labour pool.

It is often on these small groups that the real resilience of a supply chain will hang. Management and process are all very well as is investment in plant and facilities, but if you can’t keep a good team of people together you will have a problem.  Sure you can plug the gap with other bodies, but it is experience on the job that glues everything together. Getting someone new up to speed takes time and effort. Just throwing bodies at a problem rarely solves it.

So next time that you are looking at the strategic supply chain, take the trouble to walk the floor of your supply partners and look at the people.  Take the time to talk to some of the recruitment agencies about the local labour market. Find out where that supplier sits in the local pecking order of employers. Do they get the best or the dregs?

Because at the end of the day it is the people that matter: Never forget that.

 

 

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