US Supply Chain Experiencing Labor Deficit

Consumers are aware of the fact that if they purchase an item online, there’s a good chance that it will be delivered to their doorstep within two to five business days. Yet, many of the people who take advantage of e-commerce are often unaware of the logistics involved with making such a delivery a Transportationreality.

The return of the assembly line?
Ten years ago, if a person were to say that the U.S. would be one of the most revered production markets in the world, many business professionals would probably laugh in his or her face. However, a recent survey of 150 large enterprises conducted by Entrada Group showed that 23 percent of respondents favor the U.S. and Mexico as feasible manufacturing hubs. When asked to cite the reasons for their choices, 33 percent of study participants claimed that low operating costs factored into their decisions while 27 percent chose “other.”

Entrada Group Vice President of Business Development Doug Donahue noted that those who responded with “other” referenced a desire to better accommodate customer needs – especially regarding proximity and a desire to cut down on transportation logistics expenses.

“For the past decade or so, manufacturers have seen increased pressure to produce in the same region where their product is sold,” said Donahue. “Thus, for many manufacturers, the U.S. is becoming more attractive due to rising costs in China couple with this trend of regionalization.”

Though large producers based in North America have typically chosen to keep operations stationed in China, smaller companies see domestication as a viable option. This shift in preference may cause distribution centers to merge with factory operations, eliminating the need to transport finished materials between two hubs. As far as jobs are concerned, truckers and train drivers may replace vessel captains.

Boosting education
According to Your Houston News, Houston enterprises recently congregated at San Jacinto College, which hosted the seventh annual International Business, Logistics and Supply Chain Symposium, to discuss the problems many professionals are facing regarding hiring new distribution personnel. Josh Jungwirth, a speaker at the event and regional vice president of a third-party logistics provider, stated that the industry has experienced immediate consumer satisfaction demands as of late.

“It is critical to have employees who can come into the company with training and some experience related to purchasing and supply chain management,” said Jungwirth, as quoted by the news source. “What I would like to see is more practical courses on moving cargo in addition to the customer side in purchasing and supply chain management.”

In fact, demand for such a workforce is so high that San Jacinto College is a part of a consortium of colleges working on a Trade Adjustment Assistance Community College and Career Training grant program, which is funded by the Department of Labor. Margaret Kidd, project director of the TAACCCT grant, noted that the initiative will develop a curriculum focused on inventory fulfillment, predicting the needs of consumers and orchestrating logistics plans that optimize efficient practices.

In order to garner further investment, Senior Director of Trade Development for the Port of Houston Authority John Moseley announced the implementation of the following scholarships:

• The Daniel M. Cassler International Business and Logistics Scholarship

• The International Community Builders and International Business, Maritime and Logistics Scholarship

• Robert Morgan Jr. International Business, Maritime and Logistics Scholarship

Fostering appeal in the industry
Ultimately, what the supply chain needs is a younger workforce. According to CCN Money, Material Handling Industry CEO George Prest said that, unfortunately, many up-and-coming professionals view the logistics sector as driving a forklift and working in a warehouse. In other words, the market doesn’t appear too appealing. However, Prest acknowledged that there’s less need for low-skill work and more demand for high tech, analytics, robotics, general management, strategic sourcing and engineering – essentially, distribution experts are looking for game-changers.

Chuck Edwards, president of Lenze Americas – a subsidiary of German logistics solutions developer Lenze – explained the challenge involved with informing college kids that the innovative technology being used in warehouses, transportation processes and other supply chain tasks is appealing. Edwards noted that the enterprise often travels to universities with strong engineering and IT programs, such as the Massachusetts Institute of Technology, Cornell and Purdue.

In order for future supply chain operations to survive, it’s imperative that businesses take the time to appeal to a younger generation.