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SCM M2 U2 The human supply chain

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Transcript of SCM M2 U2 The human supply chain

Managing a supply chain is a complex task.
So far, this course has defined the practice of managing the supply chain as similar to taking a bird's-eye view of the product or service provided.
This entails examining and improving the process that a product or service goes through from the point of origin, to the point of consumption.
For some supply chain managers, it is enough to be simply concerned with the mechanics of the chain.
For these managers,
effort is concentrated on
choosing new factory
locations . . .
. . . or acquiring new
transport methods to help with
the movement of goods . . .
This entails applying both a
telescopic and microscopic view of all the operations involved in human resources management.
The initial phases of human
resources management involve
the following:
During the planning phase, the HR manager has three main tasks:
1. Creating a job analysis
2. Creating a job description
3. Creating a job specification.
You can read more about each of these activities in detail in the
Module 2 Unit 2
What's most important is to realise that during the planning phase, the HR manager should treat the job offering as a product, and the position needs to be

The job should be made to seem as desirable as possible, and the company itself should be
as a desirable place to work.
Globally, human resources management is recognised as being a major contributor to a business's overall competitive advantage.
Improved human resources management is linked to an increase in overall economic performance.
Human resources management and supply chain management are aligned in that both have the same goal of improving overall organisational performance, and enhancing business strategy.
However, both human resources management and supply chain management have distinctly separate approaches to achieving this goal.
1. Planning
2. Forecasting
3. Recruitment

Identifying the number of employees needed is an essential and complementary task to HR planning.
This HR task is most like the
management task of

Just as general and financial business needs are identified according to both present and future demands, so should the necessary labour requirements be identified.
There are three factors that should be taken into account when conducting HR forecasting:
1. Economic growth
2. Internal business development
3. The status of the labour market.
From an
perspective, the recruitment process resembles the logistical activities of in-sourcing and outsourcing.
The main function of recruitment is to ensure that a sufficient pool of talent applies for the position that is being marketed.
New talent can be sourced from either one of the following:
1. Internal recruitment
(the position is filled by someone who is pulled from the company's existing employees).
2. External recruitment
(the position is filled by someone who is pulled from the current labour market).
There are a number of advantages and disadvantages associated with both the 'in-sourcing' and 'outsourcing' of employees. These are listed in the table provided:
Once the planning and recruitment phases are complete, the more operational functioning of HR management can take place.
Once the employee has been recruited they go through a selection process, which can vary from a short interview to an intensive assessment process.

The steps in a typical selection process are as follows:
Once the candidate accepts the offer and a letter of employment is signed,
the next step is for the organisation to place and induct the new employee. “Placing” means that the employee must be placed in the department in which he or she will be working, and “induction” refers to orientation and socialisation. The induction process includes the following:
• The introduction of the new employee to their colleagues;
• An explanation of the organisation’s policies, procedures and rules;
• An explanation of the organisation’s history, products and services and reputation and position in the marketplace;

• An explanation of the organisation’s structure; and
• An explanation of other arrangements, for example, medical aid, life cover, payment procedures, overtime procedures, incentive schemes and leave benefits.
Once the employee has been inducted, the next step is to monitor the employee’s performance over the short-, medium- and long-term.
This is to ensure that the employee’s performance is in line with the objectives that have been set and accepted by the employee.
One of the most challenging issues that managers face today is how to manage the employee’s performance to ensure that individual and collective organisational objectives are achieved.
Effective performance management is the key to this challenge.
Measuring human performance can be used to indicate supply chain performance and operational metrics. This is covered in more detail in the
Module 2 Unit 2
Essentially, the operations function, when applied
to HR management, performs both a quality and
capacity control measure.
How are finance and HR
management related?
When an individual is selected, and offered a position at the company, they are considered an
There are three sets of costs involved in human resources management:
1. Conducting the selection process itself
2. The hiring and continual cost of employment
3. Associated upkeep costs - costs which are incurred when training and developing the employee.
Employment costs are seen to exist not only from the outset, as a deduction from initial capital, but are also ongoing. Employees need salaries every month, and bonuses and incentives. This means that labour costs are often the some of the highest expenses.
Because of the high costs associated with both hiring and employment, it is important that the best employee possible is selected for the job.
For this reason, the concept of 'best fit' is applied to the final selection of a candidate. Because of the high cost of investment, it is important that the 'asset' or individual will provide a definite value-add to the company.
Ongoing assessment of job satisfaction is also required. The last thing any company wants after expending its financial resources is to lose a candidate that has cost the company time and money on selecting, training, inducting, and developing!
What does this mean in
terms of the current
job market?
The current job market is not only saturated with young, talented graduates but also with a high number of desirable places to work.
This means that good human resource management is more challenging than ever before.
One tip on meeting this challenge is to market your company as a good place to work.
Another challenge posed by the current labour force is the nature of Generation Y.
Generation Y, sometimes referred to as 'millenials', are characterised by distinct generational challenges, as well as the likelihood that they will move jobs several times.
Managing this generation requires a unique approach. You can read about Generation Y and how to manage the hiring challenges they pose through the following links:
1. Forbes: Gen-Y workers and workplace are out of sync

2. TIME: A Note to Gen-Y workers: performance actually matters http://business.time.com/2012/09/28/note-to-gen-y-workers-performance-on-the-job-actually-matters/
The nature of the job market and its unique characteristics may make it seem like gathering and stacking up talent is essential.
But if there is too much talent in a company, this is equally problematic.
"Bottle-necking" may occur, and reduce the logistical flow of the supply chain. Additionally, employee satisfaction will decline, and people may seek opportunities elsewhere.
This results in financial loss - either the loss of an investment, plus the additional cost of recruitment, selection etc. to replace lost talent, OR the loss of salaries which need to be paid regardless of performance.
As long as the contract exists, the employee will count as an expense, with a salary that demands to be paid.
Failing to manage human resources is the same as failing to manage the supply chain.
To continue exploring how applying supply
chain concepts to human resources
management, follow the article link below:

"Talent as a strategic asset: a virtual roundtable"

The supply chain in only as strong as it's weakest link - and that means that the human links should be the strongest, as every logistical activity is dependent on human input.
What if human resources is conceptualised from the perspective of supply chain management?
This presentation explores the similarities between human resources management and a supply chain, through examining how human resources relates to the following functional management areas: marketing, operations and finance.
They may even focus on improving the
efficiency of production
In this sense, the power behind a supply chain is distinctly human.
Overlooked throughout these decisions is the fact that the individuals who work within factories or operate transport determine the productivity, quality, and efficiency of the supply chain.
Read about each of these activities in detail in the
Module 2 Unit 2
Full transcript