Application of Supply Chain Best Practices to Human Resource Activities - Coursework Example

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Application of Supply Chain Best Practices to Human Resource Activities

Introduction

The primary role of the supply chain is to ensure that all the parties involved directly or indirectly conduct their functions diligently for purposes of ensuring customer satisfaction. The key players of the supply chain comprise manufacturers, transporters, warehouse, retailers, and the customers. As such, the main role of the supply chain is to receive and fill the requests of the customers by coordinating various functions including developing new products, marketing, distributing, operation, finance, and customer service. Consequently, all these roles that are facilitated by the supply chain require the expertise of human resource factors. This is because the success of supply chain organizations largely depend on the knowledge, skills, abilities, and motivation of its human factors, which means that the supply chain best practices and human resource activities are intertwined.

The relationship between supply chain best practices and human resource factors can be explored by focusing on essential human resource aspects such as just-in-time (lean), talent management through performance review, and calculation of employee turnover for both staff and those in the management positions. Incorporation of these practices in supply chain organizations ensures that human resource activities within an organization aid in creating value for money for both the organization and the customers. Human Resource Management (HRM) is a business function comprised of duties and roles that relate to people; selection, recruitment, training, as well as other activities that enhance development of employee capability. Some of the best supply chain practices advocate that the organization: be customer-centered; ensure constant engagement of the senior management; efficient risk management; establish fundamental performance indicators, outsource non-core functions and processes, and utilize ICT (Gowen & Tallon, 2003). This paper seeks to establish the manner in which effective and sustainable supply chain practices can be applied to human resource activities for enhanced productivity.

Forecasting for Job Demand through Lean Management and Just-in-time Practices

The supply chain practices are very useful and vital in human resources activities and practices. Some of the supply chain practices comprise of forecasting for job demand through lean management and just-in-time practices, recognition of talent through performance reviews, and calculation of existing talent turnover to include both staff as well as the management positions. One of the major supply chain practice that is applicable in the human resource activities is the Just-in-time (Lean) recruiting (Brandenburg & Ellinger, 2003). This process comprises of identifying organization’ s needs and identifying, retaining, and acquiring talent for those needs since these needs are basically the human supply chain management. Supply chain is a broad concept that comprise of technology, people, organization, activities, information and resources in moving something that has value to the consumer. Lean is a management philosophy that is based on Toyota Production System (TPS) (James & Jones, 2013). There are various but very important principles that can be driven from Lean philosophy such as respect for people, progressive improvement, development of the people in the in the organization, and solving the cause problems in the organization (Gowen & Tallon, 2003).

The function of lean is to create more value with less work. As such, if the human resource has the right type of employees, more value will be created regardless of the small number of employees. There is waste reduction in the lean management philosophy, hence applying this scenario on human resource management implies that the organization will have the right number of employees for a particular task, avoiding the situation of understaffing or overstaffing in the organization (James & Jones, 2013). Any human resource activity that does not add value to the organization will be considered wasteful, thus the human resource activities should be aimed at creating value. The Human Resource Management (HRM) is supposed to make sure that it has a clear understanding of the hidden waste in the recruiting process, which can be achieved through the application of Just-In-Time recruitment process. Lean concept identifies different forms of waste, but the most relevant wastes that can be targeted during the recruitment process relate to relationship between human factors and overproduction, defects, inventory, over-processing and waiting.

Overproduction in the recruitment process occurs when the HRM attract, identify, and engage more candidates than what is needed to deliver to the customers. A situation where there are so many applicants that the organization doesn’t have time to go through them is a wasteful process, therefore, the organization should devise ways that don’t attract too many applicants. In recruiting the candidate pipeline is considered as the inventor, and in particular work-in-process (WIP). It is therefore a waste if the HRM of an organization has thee practice of maintaining this type of candidates, since they don’t add any value to the organization. In regard to defects, Lean describes a “defect” as something that doesn’t conform to expectation or specification. When the candidates are selected, screened, contacted and it so happens that they don’t match the actual requirements of the hiring process, they are the defects that recruiting process. The HRM should ensure that they have platforms that will minimize the occurrence of such in the recruiting process. Over-processing is also related to the waste, whereby the screening, engagement, and maintenance of the candidates’ relationship will never be submitted to the manager for consideration (Preece& Jones, 2010). The specific human resource firm that submits potential clients to an organization are wasteful if some of the candidates in the database will never be considered for recruitment. According to lean the waste of waiting is defined as any time that is held so as the next procedure can take place. In the process of recruiting waiting mainly occurs in a situation where the candidates are not been advanced to the actual recruiting or hiring process. There is so much time wasted when the candidate is awaiting to be moved to the next process, whether is the case of promotion or novice recruitment. The HRM has the mandate to inform the candidate that they can’t be considered for recruitment, so as to give them an opportunity to seek work elsewhere.

The main concept of lean as analyse is to provide value, whether in terms of money or time, to the customer and this is achieved through minimising waste. However, Just-In-Time production is a concept that is purely based on pull-based production strategy (Gowen & Tallon, 2003). Just-In-Time is concept of Lean, which advocates that organisation should react and respond to particular demand with utmost agility and speed with a purpose of producing the exact product (or in this case performing the exact human resource activity) that the organisation wants, the time they want it, and in the right quantity that the organisation want. For instance, this implies the organisation wants 50 employees, the HRM department or firm should be able to recruit the exact type of candidates in terms of skills, knowledge, and qualifications, at the right time to avoid under production or over working the existing employees, and they should be 50- all this done with agility and speed (Gowen & Tallon, 2003).

Just-In-Time application to recruitment has the capability of enhancing talent identification and acquisition. The fact that Just-In-Time is a pull-based strategy, it will enable the human resource department or institution to pull candidates that exactly match the need of the organisation. Just-In-Time is a very useful technique since it minimizes wastes of over production, waiting, defects, inventory, and over-processing. All these form of waste that are identified in Lean, are eliminated in the organisation utilizes Just-In-Time techniques in recruiting and promotion. Just-In-Time has a vital aim of tapping into candidate inventory (raw material) such as resumes, referrals, and Linkedln profiles as well as contacting and delivering qualified candidates in line with the specific hiring needs since Just-In-Time is a push-based strategy. Whilst Just-In-Time is a push-based strategy, Lean is a demand-based strategy. The two strategy can be blended together to make sure that the human resource practices such as recruiting and hiring are done efficiently and swiftly.

Recognition of Existing Talent through Performance Reviews

The talent strategy in supply chain organizations is crucial to ensuring functionality of the human resource. Achieving a good talent strategy for evaluation of employee skills and competencies is based on conducting regular performance reviews that sets our employee objectives (Mathis & Jackson, 2007). The rationale for regular employee reviews for purposes of identifying employee talent is based on the fact that it is untenable for an organization to successfully pursue all the employee based on their talents during the recruitment process as the generic factors or grade points do not produce the most effective talent strategy. Instead of sourcing for employees based on their generic rank during recruitment, the company can benefit from a more robust workforce generated through continuous performance review(Collins, 2001). This is because the review helps identify the outstanding fit for the company’s skills, experiences, attitudes and knowledge given different companies have different skills needs.

Conducting regular performance reviews prevents the misalignment metrics and isolation between the human resource practices and the supply chain aspects of the organization by putting in deliberate strategies to achieve the talent goals of the organization (Cecere, 2012). The review process needs to be continuous where the human resource teams coordinate effectively with the functional areas served by various employees for placement. This avoids a situation where the company places employs based on metrics that are highly unrelated to the supply chain such as the efficiency of the training budgets, the length of a vacant position or the average salary statistics (Steward & Brown, 2008). One of the challenges that companies face in implementing performance reviews as a talent strategy is the disproportionate channeling of resources in an organization, which are highly geared towards new hires at the expense of the highly experienced and talented employees whose talents have not been identified and tapped in the company (PwC, 2015).

The top-notch supply chain organizations have an effective talent strategy that allows them to not only retain the most talented employees, but also create leaders with the necessary skills to drive the goals of the business (Collins, 2001). The ongoing, separate top-talent system employed by these supply chain organizations focus on individual potential and ensuring that individuals with potential are prepared to take up executive roles in the organization as such individuals demonstrate capacity and the motivation to achieve the set goals of the company (PwC, 2015).The ongoing review process is consistent with the recognition that all the employees want to succeed and thus, they supplement the path of projects, assignment timeliness, average coach and experiences with best-in-class human resources practices for fast talent development. These practices include development of a diverse, clear list of the talent needs of the company at various levels with their corresponding attributes. The list is then used by the decision makers against the performance review of the employees to determine the best fit for various positions (Cecere, 2012). A company can also create a talent strategy for management of career plans and assignments. Some of these assignments will take the form of significant ongoing commercial interface, tougher assignments and high-exposure roles to determine the capability of such employees in managing the needs of the company in the wake of immense and tough challenges.

Performance reviews provide the first step in establishing a relationship between human resources in the company and the supply chain. Many supply chain organizations recognize the role played by human resource especially where it is aligned with the company’s objectives and strategies. Most human resource activities are designed to support the organizational goals of the company as opposed to achieving the departmental directives of various sections of operations. Hence, if the supply chain was designed for purposes of achievement of a specific value such as employing any of the supply chain strategy, improving customer service, changing the manufacturing process, entering new markets of cutting down of production and operation costs, then there should be a talent strategy that ensures that the skills of the employs are constantly under review so ensure that potential candidates to position of leadership within the supply chain are selected based on the effectiveness of their skills, attitude and the proper skills in handling practical roles within the specific departments of the company (Cappelli, 2008). While the importance of constant performance review may be recognized by many companies and may appear as common sense, research shows that only few companies have a budget set for development of supply chain talent through constant performance review. Worth noting is the fact that having a robust talent strategy can be a major source of competitive advantage for a company and can immensely influence production (Mathis & Jackson, 2007).

Across all areas of talent management in the supply chain, it would be prudent to conclude that supply chain organizations can derive great benefits by collaborating with the human resource functions of the company to ensure that the skills, competencies and attitude of the employees is tapped for the success of the organization. However, there has been a great disconnect between the supply chain operations of an organization and its human resource factors, with every department focusing on individual needs at the expense of the achievement of the company’s strategic goals. This can be used to explain the high talent turnover due to lack of effective talent management practices (Cappelli, 2008).

Calculation of Existing Talent Turnover to Include Both Staff and Management Positions

The rate of employee turnover varies from company to company and can positively or adversely affect the performance of a company in the long run. Supply chain talent is regarded as the missing link in the future of organizations, which has prompted many companies to invest heavily in recruiting, training and mentoring employees for future high performance talents that would give the organization a competitive edge in the industry (Mathis & Jackson, 2007). However, many organizations are unaware of the unforeseen changes in employee turnover and the impact it may have on the company. As such, many of them find themselves in a dilemma. On one side, employee turnover gives the company an opportunity to take advantage of new hires with robust technological skills to ensure that the operations of the company are constantly updated. On the other hand, the company risks losing the payback on investment on talent development as the highly talented and prepared employees shift employees and divert their skills to another company within a few years of training (Rankin, 2006).

Calculating the existing talent turnover for staff and those in management positions helps to determine the rate at which the company is losing valuable resources and the implication it has on the productivity. The company should have an optimal level of talent turnover which implies that the rate is not too low that no new talents are getting into the company, nor too huge that the company is losing on valuable investment. Companies that have had co constantly hire new employees such as Procter & Gamble, General Electric, PepsiCo, and IBM recognize how severely the competitiveness of the company is compromised by the high talent turnover (Cappelli, 2008).

The problem faced with the inconsistent of the employee turnover is the failure of companies to adopt new talent management strategies that not only retain the prepared talents, but also seek to rejuvenate their talent stock with new talents, especially due to the need to constantly update the technological application in the company. As Cappelli (2008) noted, General Electric has faced such challenges as the company has the reputation of an ‘academy company’ due to its enhanced capacity to train new talent. The downside of this talent strategy is that new employees learn new management skills and competencies in the company and then they move on to be hired by other companies (Steward & Brown, 2008). On the other hand, it is problematic to rely only on outside hiring as it can cost the company as the talented employees are driven by the market forces due to the lack of loyalty. As such, they can leave the company vulnerable at the onset of a better opportunity (Lee & Mitchell, 2000). It is therefore prudent to a company to calculate the talent turnover to ensure that there is a balance for optimal future performance and to ensure that they have a strategy of dealing with uncertainties associated with talent turnover.

Failure of a supply chain organization to manage talent turnover can lead to talent gap, which I mainly attributable to the failure of the top management to focus on supply chain talent, leading to a high talent turnover (Frankel et al., 2013). The supply chain strategies to human resources emphasize more on the information transfer, product flows and the supply chain processes. Despite the extended emphasis on the different aspects of the supply chain, the major success is attributed to the people who develop and implement the strategic decisions. Hence, it is prudent that supply chain organizations focus more on the top management of the organization to ensure that supply chain leaders have the right attitude, skills and experience required in making strategic decisions that are geared towards the company’s strategic goals (Cappelli, 2008). The rationale for focusing on the talent of the top management is based on the understanding that there is a general shortage of skilled and competent personnel as the organization ranks gets higher especially since many organizations are looking to hire new highly talented managers, thereby creating an unstable talent turnover in many organizations (Frankel et al., 2013). A high telnet turnover at the top of the management creates a situation that impedes the success of the company the creation of the shortage of skills in resourcefulness, analytics, big picture thinking and essential skills needed in the daily supply chain operations.

Conclusion

This paper provides a critical analysis of the application of supply chain best practices to human resource activities. Supply chain best practices have been ascertained to be very applicable in HRM processes such as recruiting, recognition of talent through performance reviews, and calculation of existing talent turnover. Any supply chain leader would confirm the implications of this analysis, with regard to the fact that talent needs to be effectively managed as it is the future of the supply chain organizations. This is achieved through performance reviews and calculation of talent turnover. Moreover, it ensures that the aspect of waste in the human resource activities is either minimized or completely eliminated. These practices have also established the fact that if supply chain practices are applied to the human resource activities, the organization is bound to have the best workforce in terms of expertise, skills and knowledge. The aspect of overstaffing or understaffing will not be an issue since the organization will have the right number of employees for a particular task. Job demand, recognition of existing and calculation of existing talent turnover are swiftly enhanced when supply chain best practices are applied to the activities of the human resources. However, despite the fact that Just-In-Time hiring is very beneficial to the HR department or HRM firm it is very vital for the involved parties to be synergetic. The managers or the client looking to hire employees should meet and discuss the requirement of the candidates with the HR department or the hiring firm. This will enhance a swift identification of the ideal candidate, a candidate who adds value to the company rather than a candidate that is a liability to the company.