A Human Resource Perspective on Navigating Supply Chain Disruptions

Perhaps nothing justifies the above maxim more than the tumultuous times that we are currently living in and our continuous efforts as a collective species to come out of it bearing some semblance to the world that was unencumbered by the pandemic — a “new” normal not entirely unlike the “old” normal.

The COVID-19 pandemic has been labelled by experts as a “black swan event” — a rare and unpredictable catastrophe that causes lasting damage. And given the magnitude of disruptions it has caused to supply chains worldwide, it is fair to say that this will finally force many companies and entire industries to rethink and transform their global supply chain model.

In order to fully comprehend the magnitude of these disruptions, it is important to understand the extent of dependencies that global supply chains share with China — especially the Wuhan province which was the epicentre of the pandemic. Data shows that over 200 of the Fortune Global 500 companies have a direct presence in Wuhan. And a new Dun & Bradstreet study also estimates that 163 of the Fortune 1000 have Tier 1 suppliers (those they do direct business with) in the impacted area, and 938 have one or more Tier 2 suppliers (which feed the first tier) in the same impacted area. Even for companies that were not solely reliant on Wuhan and its surrounding areas for production or suppliers, a major blow came with the logistics being severely affected all across China as Wuhan also served as the transportation hub for many industries. The domino effect of plant closures, supply shortages and logistical unavailability has led to massive disruptions in global supply chains. It is also important to note that supply chain disruptions often exhibit a “bullwhip effect”. They start with retailers before spiralling out in greater magnitude to distributors, producers, and then eventually to suppliers in the first, second, and third tiers.

In circumstances such as these it, therefore, becomes imperative on the part of businesses to identify cornerstone practices in supply chain management, assess how and the extent to which each of these practices is currently disrupted and formulate business strategies to transform the same. And as with the implementation of any business strategy, it would be imperative to simultaneously devise a watertight human resources strategy as it would play a key role in the enablement and facilitation of the entire transformation journey.

Insights from businesses worldwide reveal that some of the major risks posing global supply chains include –

Risks in Procurement:

Risks in Planning:

Risks in Logistics and Transportation:

Mitigating the above risks and ensuring the business’ supply chain is future-proofed against such disruptions would not only require business leaders to find feasible alternatives to their existing practices in the short-term but in the medium, to long-term, it would also require them to thoroughly re-evaluate and redesign these practices to make them more agile and well-suited to be administered remotely or through minimal human contact. And for these changes to be implemented seamlessly within the organization, a huge consideration would be the readiness of the workforce. The workforce, both white-collar as well as blue-collar, would require upskilling on updated health and safety standards and extensive reskilling to make a fundamental shift towards a more digitally and technologically enabled workplace. Therefore, the objective for human resource leaders in such organizations would be two-fold — developing transformational capabilities within the leadership cadre to enable them in making key strategic changes and remodelling performance capabilities within the workforce to ensure seamless implementation of these strategic changes.

The first challenge, i.e., developing leadership capabilities is usually a drawn-out process. However, given the time-sensitive nature of business outcomes, especially in this scenario, it becomes absolutely critical that the turnaround time is minimized as much as possible. Therefore, the hand-holding of executives will become a key practice. At all levels of management, human resource managers would have to act as transformation coaches supported by a leadership-transformation team to guide senior leaders in making the personal shifts in mindsets and behaviours needed, and helping them apply their learning to rethink the design of the supply chain. These guides would have to work closely with the leadership development group, agile-transformation team, and agile team coaches.

Another key focus area would be to provide learning and hands-on application opportunities, simultaneously, through immersive learning experiences with the help of the transformation coaches. These experiences should comprise a wide range of interactive learning modules and activities through which leaders get to experience and explore new mind-sets and skills, learn from each other, and practice application in a safe environment. At a later stage in the journey, hands-on application opportunities should be provided by linking leadership learning to existing initiatives and conducting new experiments. Leaders should be invited to connect their learning to transformation initiatives already underway and to launch new experiments to begin testing out some of their learning. Existing initiatives can also be scrutinized, reimagined, and redesigned to be more agile.

It is also important that the above measures are created and implemented in short operating cycles to review the leadership experiences, and business outcomes over the past period, and to plan and prioritize initiatives for the next period. This would ensure alignment to the leadership capability-building initiative and provide continuing flexibility to adjust according to environmental changes.

The second challenge, i.e., enhancing workforce capabilities to ensure business continuity would be based on a strong foundation of the transactional aspects of human resource management. The first priority would be to set up a dedicated COVID HR team to monitor the status of every employee in the organization on the following parameters — where they are currently situated, their health status, their current activity status and disclosure of their family members’ health issues. A digital employee health declaration system should also be launched to track employee well-being and comply with administrative reporting requirements. Another key focus area should be to develop and disseminate strict protocols for staff working at plants and from home — especially a detailed work chart for 30 days of activities, roles, and responsibilities. For blue-collar workforce it will be necessary to prepare a roster of employees operating within the plant on a rotation basis, keeping in mind risk assessment, location proximity, executive health reports, and annual checkup reports. And most importantly, processes should be simplified to drive efficiencies and ensure people are redeployed. For example, the admin team can be retrained to perform certain PMO tasks.

The role that human resources would play in managing supply chain disruptions would, therefore, be of an enabler in implementation and not strictly in strategy formulation. Much like the physiotherapists of any sports team, they would ensure that the players (employees) are peaked to execute any strategy that the coach (leadership) might devise.

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