Victor S. Deyglio President The Logistics Institute November 2006 Global Workforce Development Strategies and Professionalism in Supply Chain Logistics Victor S. Deyglio President The Logistics Institute November 2006

Critical Success Factors Competitive Strategy Business Process There are only 3 things we need to succeed: strategy, process and people. Strategy is most readily understood with the question: where do we want to be/go? Process is the question: how are we going to get there? And people is the question: who’s driving the bus? Up to this point, we’ve spoken about supply chain logistics business strategy and processes. Now we turn to the people factor of success. People

Critical Success Factors Building success demands 3 things: Capability Competence Credentials Building success, both in terms of corporate market competitiveness and personal careers, demands 3 things: Capability, which is the capacity to do the job For companies, it means having the right infrastructure, systems, investments, assets and resources to deliver For individuals, it means having the right psychological, physical, and mental capacity to get the job done; Competence, which is the right balance of skills, knowledge and aptitude that sustain our capability to do the job For companies, it is having the right bench-strength [Skills, knowledge and aptitude] among our human resources and work teams to sustain our capability to succeed For individuals, it means having the right Skills, knowledge and aptitude to sustain and advance our careers Credentials, which are those public identifiers that certify our competence, which in turn support our ability to do the job For companies, it is having the right experiences to prove and demonstrate bona fide strength to succeed; For individuals, it is having the right educational and professional credentials, as well as past work experience, to support our claims to do the job.

Critical Success Factors Capability = the capacity to do the job For companies, it means having the right infrastructure, systems, investments, assets and resources to deliver on the corporate value proposition For individuals, it means having the right psychological, physical, and mental capacity to get the job done Core Principles of Workforce Development Strategy

Critical Success Factors Competence = the right balance of skills, knowledge and aptitude that sustain our capability to do the job For companies, it is having the right bench-strength [Skills, knowledge and aptitude] among our human resources and work teams to sustain our capability to succeed For individuals, it means having the right Skills, knowledge and aptitude to sustain and advance our careers

Critical Success Factors Credentials = those public identifiers that certify our competence, which in turn support our ability to do the job For companies, it is having the right experiences to prove and demonstrate bona fide strength to succeed For individuals, it is having the right educational and professional credentials, as well as past work experience, to support our claims to do the job Core Principles of Workforce Development Strategy

Workforce Development Strategy Emphasis on training, skills and professional development, and not only on formal education and access to information [theory] Skills development involves the ability to apply and implement, and not just the ability to know or know about something The focus is on competence, not just knowledge Competent individuals have the right balance of SKA’s skills [ability to do], knowledge [ability to know what to do], aptitude [ability to do it well] Certification of competence is a key credential of qualifications. Success is the purpose of developing and implementing a Workforce Development Strategy. Core Principles of such a strategy are as follows

Supply Chain Logistics Workforce Development Strategy – Basics SCL WD Basics: Multi-tasking Horizons of Responsibility vs Job Titles Organizational Terms of Reference Specific Technical Expertise Competency Standards

Supply Chain Logistics Workforce Development – Multi-tasking this is a picture of the Supply Chain Logistics Career Mobility Framework for the brave new world of 21st century globalization. It is based on a series of annual labour market studies conducted by the Logistics Institute since 1995 in partnership with the Applied Social Research Centre of Trent University in Peterborough, Ontario. It’s a fuzzy picture, and I apologize for that….It is not intentional….Just a technical problem….The next few slides unpack this diagram in greater detail and provide some guidelines to our understanding the dynamics of the Supply Chain Logistics labour market. The key feature I want to point out in this diagram is the curious set of boxes on the right side of the screen. Here we have the vertical axis referring to different business sectors, ranging from manufacturing to government, and so on. Along the horizontal axis we have the primary supply chain logistics areas of expertise, including purchasing, operations [as in operations research or inventory management – supply/demand], distribution [including warehousing], traffic and transportation, freight forwarding and customs, and integrated logistics. What we see pictured in the Career Mobility Framework is the “bouncing career path”….Work and careers in supply chain logistics no longer function on a straight line from entry to top. Instead, supply chain logistics expertise involves significant lateral movements both in terms of the work one is expected to do and in terms of competency and career one is expected to develop along the way. At an entry and lower level of responsibility, one is expected to develop a breadth of experience across lines of logistics expertise, as befits supply chain logistics, which is quintessentially cross functional. At the middle range of responsibility, one is expected to specialize by focusing in several areas of expertise – often either on the supply side of logistics [purchasing, ops, dist] or on the distribution side of logistics [transport, ff/customs]. After all, the two core sets of supply chain logistics activities involve either buying or selling products/services. Managing inventory and service levels is the objective/outcome of doing these work activities successfully. At the senior and strategic levels of responsibility, one is to be fully integrated in supply chain logistics expertise…One is no longer just a purchasing manager or a traffic manager or warehouse manager….One is the chief logistics officer, with board room responsibilities to build the company in a globally competitive market. Overall, work is defined in terms of (a) horizons of responsibility, (b) tasks to be done and decisions to be made; and © competencies needed to succeed.

Supply Chain Logistics: Workforce Development – Horizons of Responsibility Career Level Planning Horizon Decision Impact Entry Duration Executive 2+ Years Viability of the Organization 38+ Management 3 months to 2 years Viability of the Business Unit 30 8 Supervisory 0 to 3 months Viability of key Business Process 25 5 Operational 0 to 2 weeks Viability of Transactions 22 3 job titles are very misleading in any industry or field of expertise, and no less so in the supply chain logistics labour market. So we uniquely set out parameters to describe work, careers and career progression in terms of responsibilities: most notably, planning horizons, decision impact….it isn’t the title that’s important; it’s the impact and influence you have on the business and its success that are key factors in terms of work and a contribution to the success of the company…..

Supply Chain Logistics: Workforce Development – Organizational Reference Executive Strategic responsibility for inter-organizational relationships along complex supply chains focused on customer value creation Manager Structural responsibility to develop and manage vendor networks and distribution channels to sustain customer strategies Supervisor Process responsibility to integrate internal operations in procurement, inventory management, distribution and transportation Frontline Functional responsibility for core tactical operations in purchasing, inventory control, order processing, materials management, warehousing, distribution, transportation.

Supply Chain Logistics Workforce Development – Technical Expertise Develop distribution channel and transport strategies [hub and spoke, or alternatives] Establish delivery cycle requirements [schedules and routes] Implement IT applications Traffic/Transportation and Transport Define transport/delivery requirements Identify/locate key transport suppliers Negotiate/contract for transport/delivery Prepare goods for shipment/transport Monitor compliance How and when the goods/services are to be transported and delivered? The need to transport and deliver the right goods in the right quantities, to the right destinations, in the condition and for the right price Operate/maintain distribution facilities Develop/implement flow through processes Distribution/Warehousing Locate facilities and design layouts Design/manage flow through process Locate and allocate goods/products Manage service input requirements Where the goods/services are located and deployed for distribution? The need to deploy and locate goods, and provide support services in terms of receiving-labeling-storing as well as picking-packing-shipping, for distribution in sufficient quantities as and when needed Establish inventory cycle standards [demand forecasts] Inventory/Supply Establish goods inventory levels Determine goods replenishment cycles Determine service input requirements How much [quantity of goods; quality of services] needs to be purchased, stored on hand, and delivered? The need to supply, inventory, and replenish goods in sufficient quantities, and services of sufficient quality, as and when needed. Develop purchasing policies Establish quality standards Develop payment procedures Purchasing/Procurement Define product/service specifications Identify and locate key suppliers Negotiate and contract with suppliers Purchase/buy goods/services What goods and services need to be purchased? The need to source, locate and negotiate with suppliers, and purchase/buy goods and services balancing cost of goods/services with quantity, time and place requirements. Extended Requirements Process Requirements Work Requirements So what do we expect supply chain logistics people to do? From a work perspective, expectations are described along the lines of specific tasks and decisions within the overall supply chain logistics process. On the one hand we can refer to this as the “division of labour”, on the other hand we can call this value-added input to overall success. In other words, this is what we expect Purchasing to do and contribute; and Inventory/Supply Management to do and contribute, and Distribution/Warehousing to do and contribute, and Traffic/Transportation [internal] and Transport [external] to do and contribute.

Supply Chain Logistics Workforce Development – Competency Standards We also take a unique approach to Competency. We define competency in terms of “skills, knowledge and aptitude” [SKA]: Skill: the ability to do something Knowledge: the ability to know how to do it Aptitude: the ability to do it well. The competency frameworks developed by the Logistics Institute for supply chain logistics are built on extensive frontline research and input from supply chain logistics practitioners and companies, as well as the work done by the Government of Canada and published in the National Occupations Classification [2001] and the NOC Career Handbook [2 volumes, 2003]. This chart summarizes input from the practitioner community. Subsequent series of slides tie this frontline research into the national Government publications, and provide us with a more detailed description of SCL tasks and competencies at each level of expertise and work requirement, from executive to frontline responsibilities. SEE CHART AND BOOK

Supply Chain Logistics Professionalism: What’s the Difference? IT’S ABOUT CERTIFICATION, NOT GRADUATION Scope of certification is professional, not educational Emphasis on training, skills, and professional development, and not only on access to information Skills development involves the ability to apply and implement, and not just the ability to know Professionalism is about competence, not knowledge. Professional status or professionalism is a distinct class of recognition, vastly different from educational status. Being a professional is not the same thing as having an education…..Here are some of the distinctions we should keep in mind as the basis for developing a professional identity…..

Supply Chain Logistics Professionalism: What’s the Difference? IT’S ABOUT CERTIFICATION, NOT GRADUATION A degree indicates what you know; a professional designation states what you can do, built on what you know. You earn a degree once, and become a graduate; you renew professional status annually, as a commitment to your career. To earn a degree you take tests to measure the acquisition of knowledge and awareness of information; to earn and keep professional status you practice your profession. An engineer who builds a bridge doesn’t just have a BSc or MSc in engineering….He is a practitioner who works with other practitioners who have experience in building bridges…. And he is competent, not just book-learned/knowledgeable.

Supply Chain Logistics Professionalism: What’s the Difference? IT’S ABOUT CERTIFICATION, NOT GRADUATION A professional differs from an employee: professionals owe loyalty to their profession first. The professional designation is a public statement of that loyalty, a symbol of competence and integrity, and a commitment to train for the future. The real test of professionals is not the process they undergo to earn the designation in the first place, but the career paths they pursue and the careers they create as a professional. A profession is a life choice.

Supply Chain Logistics Professionalism – Vision To develop leaders: Who transform organizations as change agents and build capabilities in others to implement change; With the self-confidence to make difficult decisions and accept responsibility for the consequences of those decisions; With competitive edge to create customer value, and with competence as supply chain and logistics practitioners to sustain that value.

Supply Chain Logistics Professionalism – Mandate Establish a supply chain logistics profession worldwide, in the form of the P.Log. designation Develop, and deliver internationally, comprehensive training in supply chain logistics, leading to certification Define supply chain logistics career opportunities through career mobility frameworks and global work experience opportunities Sustain supply chain logistics HR development through research and the development of competency standards and workforce strategies

Supply Chain Logistics Professionalism – Core Competencies Leadership Initiating, Leading, Managing Change Team & Group Dynamics Problem Solving & Implementation Ethics & Values Responsibility-Decision-Consequence Factors Supply Chain Logistics Supply Chain Strategies Logistics Process Diagnostics Integrated Logistics Networks Inter-organizational Network Relations Strategic Customer Relationships

Supply Chain Logistics Professionalism – Career Pathways Certification Pathways Program Requirements To Earn the P.Log. Executive 1 week in residence • Leadership and Change • Supply Chain Logistics Reorganization • Ethics and Values P.Log. designation attained Process Management • Leading & Managing Change * Supply Chain Strategies * Professional Ethics * Logistics Process Diagnostics * Integrated Logistics Networks * Team Dynamics * Q Module On line Athabasca University Leading & Managing Through Change Ethics & Decision Making Strategic Supply Chain Management Modules to earn the P.Log.: • Integrated Logistics Networks * Logistics Process Diagnostics * Team Dynamics • Q Module Lean Supply Chain Management • Understanding SCL * Introducing Lean to SCL • Lean Thinking * Lean SCL Tools • Value Stream Mapping * Kaizen * 5-S • Ancillary & Other tools * Roadmap to Lean • Leading & Managing Change • Professional Ethics • Team Dynamics Front Line Logistics • Strategic HR Management * Assembling Orders * Controlling Budgets * Controlling Inventory * Customer Complaints * Customer Service * Forklift Safety * Good SC&L Practices * Health, Safety, Environment * Operating Procedures * Personnel * Product Damage * Scheduling Carriers * Scheduling Resources * Carrier Selection • Leading & Managing Change * Supply Chain Strategies * Professional Ethics • Team Dynamics * Logistics Process Diagnostics * Q Module Essentials Logistics * Introduction to Logistics • Purchasing & Procurement • Inventory Management • Warehousing/Distribution • Traffic & Transportation • Front Line Logistics * Leading & Managing Change * Supply Chain Strategies * Professional Ethics