The rise of globalization, facilitated by numerous technological advancements, has shaped a world where supply chains extend beyond national borders. However, a paradigm shift is underway with an acceleration in reshoring and nearshoring trends. More and more companies are realigning their supply chain models to counter various pressures, such as geopolitical instability, trade tariffs, transportation costs, and the post-pandemic economic environment. This development is fundamentally changing the dynamics of supply chain management and, in particular, the demand for and the characteristics of supply chain talent.
Reshoring refers to the process where companies move their manufacturing operations or services back to their home country. Nearshoring, on the other hand, involves shifting operations to countries that are geographically closer to the company's home base, aiming to shorten supply chains and reduce costs.
Several factors are driving the accelerated reshoring and nearshoring trend. Global economic uncertainties, increased protectionism, sustainability pressures, and a need for greater supply chain resilience have all played a part. The COVID-19 pandemic brought to light the vulnerability of extended global supply chains and led many businesses to reconsider their supply chain strategies.
The shift towards reshoring and nearshoring has significant implications for supply chain talent, both in terms of demand and the skillsets required.
1. Demand for Local Talent: As companies re-establish their operations closer to home or in neighboring countries, there will be an increased demand for local talent. This demand presents an opportunity for job creation in local markets. However, it also presents a challenge in terms of finding adequately skilled professionals to fill these roles, necessitating investment in education and workforce development.
2. Changes in Skillset Requirements: The reshoring and nearshoring trend will impact the skills that companies seek in supply chain professionals. In the reshored or nearshored model, workers will need to adapt to advanced manufacturing technologies and Industry 4.0 standards. The new age supply chain professional will require skills such as data analytics, AI, automation, and robotics. Familiarity with local business environments and regulations, negotiation skills, and proficiency in multi-stakeholder management will also be highly valued.
3. Shift Towards Strategic Roles: The reshoring and nearshoring trend also signals a shift in the type of roles in demand. There will be an increasing need for strategic roles, such as supply chain analysts and strategists, who can align supply chain practices with business goals, design robust and resilient supply chain networks, and make data-driven decisions.
4. Emphasis on Sustainable Supply Chain Management: As companies move towards shorter supply chains, there will be an increased emphasis on sustainable supply chain management. Professionals with expertise in sustainability, circular economy principles, and carbon-neutral logistics will be in high demand.
5. Increased Use of Digital Tools: As reshoring and nearshoring often involve integrating new technologies, supply chain professionals will need to become proficient in using digital tools. This trend requires professionals to develop skills in areas such as cloud computing, IoT, blockchain technology, and advanced analytics.
Given these shifting skill requirements, it is paramount that businesses, academia, and governments reorient their talent development strategies.
1. Training and Continuous Learning
Companies must invest in training programs to equip their current workforce with the necessary skills. This can take the form of reskilling programs for technologies like AI and IoT, or leadership programs to cultivate strategic thinking. Emphasizing continuous learning can also help keep the workforce updated with the ever-evolving supply chain landscape.
2. Academic Partnerships
Businesses should consider partnering with academic institutions to shape the curriculum and create a talent pipeline equipped with the right skills. Universities and vocational schools play a crucial role in preparing the next generation of supply chain professionals, and their curriculums should be updated to reflect industry realities. Courses on digital technologies, strategic supply chain management, and regulatory aspects should become the norm rather than the exception.
3. Policy Measures
Governments can support these efforts by incentivizing businesses to invest in talent development. This could be through tax breaks for companies that conduct significant training or by funding vocational training centers that teach high-demand skills. Governments should also strive to enhance STEM (Science, Technology, Engineering, and Mathematics) education to ensure a steady supply of tech-savvy talent for the future.
Human Resources will play a key role in navigating these changes. HR must ensure that their organizations have the right talent to execute their reshoring or nearshoring strategy. This involves not just hiring the right people, but also retaining them and fostering a culture that encourages continuous learning
As the reshoring and nearshoring trend continues to accelerate, it is crucial for companies, educators, and policymakers to respond appropriately to ensure the availability of a skilled workforce.
26 June 2023