Shaping the Future: Why Talent Development Is Paramount in Automotive Supply Chains

[Transcript]

Jan Griffiths: 00:03

Welcome to the Auto Supply Chain Prophets podcast, where we help you prepare for the future in the auto supply chain. I'm Jan Griffiths, your co-host and producer.

Cathy Fisher: 00:13

I'm Cathy Fisher, your podcast host. Our mission is to help automotive manufacturers recognize, prepare for, and profit from whatever comes next in the auto supply chain.

Terry Onica: 00:23

I'm Terry Onica, your podcast host, will be giving you best practices and key supply chain insights from industry leaders,

Jan Griffiths: 00:29

Because the auto supply chain is where the money is. Let's dive in.

Jan Griffiths: 00:37

Hello, and welcome to another episode of Auto Supply Chain Prophets. Let's check in with our co-hosts, Terry Onica and Cathy Fisher. Cathy, what have you been up to lately?

Cathy Fisher: 00:47

Hi, Jan! Well, Terry and I have been hard at work defining the outline for our next eBook. We wrote two eBooks that came out, I guess it was them in 2021, maybe? And we feel the need to update because there's so much that's happened just in the past year and a half or almost two years now. And so, we've been working on that.

Jan Griffiths: 01:09

Terry, what about you?

Terry Onica: 01:11

In addition to that, Cathy and I are excited, we got invited to speak on a webinar on our eBooks in September.

Jan Griffiths: 01:17

Well, I've been interviewing like a fiend lately, not only on our beloved Auto Supply Chain Prophets podcast but on the Automotive Leaders podcast, and I interviewed the Global Head of HR for a major Tier One. And she started talking about a talent supply chain. And I thought, huh, what? A talent supply chain. And that got me thinking and I thought, you know what, there is nobody better to talk about a talent supply chain than our friend Naseem Malik. And so guess what, here he is today. Naseem Malik, welcome to the show.

Naseem Malik: 01:59

Thank you, Jan. Cathy, Terry, great to be here.

Jan Griffiths: 02:02

So, here we go. Naseem Malik, who is Naseem now that I've set him up for this conversation Naseem is a supply chain aficionado. He is a talent entrepreneur and builder. He is the managing director of MRA global sourcing. He knows supply chain from the practitioner perspective, but he is the go-to guy for supply chain talent. So, Naseem having set you up with that introduction. Tell us a little bit about, first of all, your supply chain practitioner experience. Let's go there first. Tell us a little bit about that.

Naseem Malik: 02:43

It was almost exactly 25 years ago I started my supply management career. So, I've worked in a lot of different industries, started in the trucking industry, which was a cousin to the automotive world. So, we shared a lot of the same suppliers. I worked in consumer products. I've worked in printing and publishing. I then worked in a startup at the time, it was an e-procurement, e-sourcing startup. I did some consulting as well. And then, my final five years was with a global manufacturer that was in construction materials mining. So that's what I tell folks out, right? I've gone from sourcing all kinds of goods and services and products to now sourcing human capital. So, people. So, we're still helping to save money. But now it's through a different way but providing the talent to do it versus having to do it myself.

Cathy Fisher: 03:36

Yeah. Well, let's see, one of the things we're interested in because you've got such a deep background in the supply chain, is what have you noticed has happened to the supply chain since COVID?

Naseem Malik: 03:50

Yeah, everything has been upended since COVID. So, everybody now knows what supply chain is. Everybody now knows the implications. Everybody now understands why or at least they now have a better semblance of why things are not available on shelves. And when they are, why have they become so expensive? The old mindset of, you know, this stability, global sourcing, low-cost country sourcing, everything has been turned on its head. So, after they all got blamed for not seeing a once in-100-year pandemic, they should have predicted that, forecasted that, of course, what a failing to now dealing with these realities, which includes: you've got tariffs between partners, you've got disruption of all kinds, you have crazy volatility when it comes to not just pricing and supply continuity, but then of shifting the supply ways globally as well too. And then, finally, the past couple of years fighting inflation. A lot of the current people working in the function have never seen this whole tsunami of factors I listed, coupled with inflationary pressure, it is testing all supply chain practitioners to an extent that they haven't before. So, the good news is now that we have a lot more tools available, we have a lot more technology. We have education now in supply management and supply chain that we didn't back when I started. And we've got a lot of smart young practitioners emerging in this field. The net effect is there's a lot of positive here. But how we got here was anything but dull.

Terry Onica: 05:29

So, what are the most important skills or competencies for supply chain leaders today, in your opinion?

Naseem Malik: 05:36

Part of the shift that has happened that we just talked about the number one things that we hear from our clients, and what we're seeing, whether it's with ISM or with other associations, is the agile mindset. And what we mean by that is because of the volatility that we've experienced, they want talent that has experience end to end. So to have that end-to-end experience means you're going to find a lot of generalists that have come into this field. They may have been on, let's say, the supply planning side or the demand planning side, or maybe they're experts on the distribution side. But now everybody's expected to wear so many different hats. And that's where the agility comes in. It's how do we find talent that understands across the board, not just the changing requirements but what now they have to do to help their company. So that is something which we tell a lot of the talent that we speak to is, you've got to be able to pivot on a very short notice. While that's important, the other challenge is, is that companies will say that, but when they actually go hire, they want to find a specialist, they want to find somebody that's actually have had this experience. So, we're beginning to see the change slowly, companies realizing that it's better to be able to hire for the future, meaning somebody that's got the potential, somebody that's got the upside and can do this versus saying, we have to find somebody that's got a very specific skill set.

Cathy Fisher: 07:02

I've seen this as well that organizations really expect, especially the younger generation, to be a lot more flexible and moving into a lot of different positions. The expertise of days gone by does not seem to have as great a value, although it's still necessary, it's still desired. Is this because the roles that are being defined in the organizations are changing substantially from what we've seen in the past?

Naseem Malik: 07:27

Yeah, that's a good question. The roles have definitely changed. We've gone from seeing roles that we didn't even know existed a few years ago to now those roles being number one, even within supply chain now. We moved from the innovation side to now the past couple of years on the data scientist side, finding people with those very specific quantitative skills since the generative AI has taken over a lot of these functions in terms of the capabilities. Now we're finding a lot of companies even within the supply chain function saying, "Okay, we need to now put our best and brightest in helping truly tap the capabilities that AI can bring, how do we do that? Do we create towers? Do we go find external consultants? Or do we bring it in-house and work with one of the big providers?" So yeah, that is something which is becoming even more important. It does all roll back to the digital side on how important a role IT now plays even in supply chain.

Cathy Fisher: 08:27

You mentioned towers. What is meant by towers?

Naseem Malik: 08:30

We were talking to one of the Chief Procurement Officer for a Fortune 100 company in the chemical space. And he mentioned that what we are creating now across the company are towers that will be focusing on this hyper-digitization that's happening, meaning primarily AI. So, this is specific to his organization. You've got a direct manufacturing tower, you've got the indirect, you've got the center of expertise to commercialize piece, these are all the towers representing that are affecting not just their function, but how they interplay across the company. So each of the person that is dedicated to this tower is an expert and will be working with other functions and with IT to represent their domain expertise.

Terry Onica: 09:16

I have a mentee from Wayne State University. And she recently started at Toyota. And she had a really interesting question for me, and I'm sure this applies to anybody new into supply chain. What career path would be the best for her? Is it best to just keep switching between commodities? Would it be better to try to get into another completely different function in supply chain? What are some of their options for future growth?

Naseem Malik: 09:41

Yeah, that's a that's a bright young practitioner asking the right questions. So, we've had an opportunity to work with a lot of these emerging professionals in the automotive world. So in your traditional manufacturers versus some on the on the EV side as well. And what we've said is if you look at the career track now, those professionals that have a broader experience are the ones that will have more of a more of a leg up. If you've, let's say, started just in the procurement or sourcing side, that's great, right? You can pick up some commodities, you can go on the direct side, you can go on the indirect side. But if you wanted to round that out and take a step back and understand broader supply chain, if you can also then have a skill set of getting into supply planning, demand planning, or on the material side, or even understanding logistics and transportation, that just gives you way more opportunities down the road. Because if you look back to how this function is special and why a lot of young people gravitate towards it? Is that it touches so many different parts of a company almost more than any other function out there, right? So you'll be working with finance, with engineering, with operations, with marketing, with HR, depending on which part of supply chain. So there's no other function that has as much touch points across the company. And now you're seeing more and more supply chain executives that are going on to the C-suite of COOs and even CEOs, and a lot of Chief Supply Chain Officers that are now being tapped to be board members. When you look at that career architecture, as some call it, it makes sense to have as broad of experience as you can.

Cathy Fisher: 11:25

You know, speaking of some of those C-suite roles, one of the things that Terry and I recognize, especially in the automotive space, is that there's a tendency that the purchasing function oftentimes is separated from the plant, there may be indirect purchasing materials that are used in the operation, but not necessarily directly in the product that may take place at the plant. But by and large, we're even seeing all purchasing kind of being extracted out of the operation side and either set up into corporate or even set up as a separate entity. We'd love to get your thoughts on that from a career perspective for new people coming into the industry as well as from a functional perspective since you have quite a bit of experience in purchasing as well.

Naseem Malik: 12:10

I had wished that for all these years. This wasn't the case. But unfortunately, it still is. I mean, this is something that was prevalent when I started my career. And it's interesting, Cathy, you mentioned that it still is today.

Cathy Fisher: 12:23

I feel like it's getting worse, actually. I think it's like there's a complete separation. And so many of the organizations that we work with that there's no communication whatsoever happening.

Naseem Malik: 12:34

That is detrimental, ultimately, to the company itself. If you look at supply chain overall, you'll see a lot of these manufacturing companies in which even Head of Procurement, sometimes there will be Chief Procurement Officers even they're now reporting to a Chief Supply Chain Officer. And that Chief Supply Chain Officer sometimes is synonymous with the COO if a company doesn't have one. But the point is, is that the procurement purchasing, like you mentioned, should be a well-regarded subset or an important partner within supply chain. So, to silo it off makes no sense. If you're not being able to communicate effectively with internally with your stakeholders, that's going to affect what you do with your suppliers as well too. And you're so right. Even in the pharmaceutical, I'll give you an example. This is happening even there. So we've known this one client, this person is Head of Sourcing, and he reports to Head of Supply Chain, yet the CEO, CFO, CEO all go to the head of sourcing because they consider it much more strategic, because they own the relationships with the suppliers, especially if they're looking to make to buy or expanding their contract manufacturing. And the Supply Chain Head doesn't like the fact that the C-suite finds more value in the sourcing person than in their organization because they're looked at as transactional or tactical. So that's not right either, right? So, the procurement slash sourcing should be better aligned internally with the supply chain person. So they can both represent the whole entity and the value it brings to the C-suite. And you shouldn't have the CEOs or COOs going to the sourcing people and be like, "Yeah, you guys are much more strategic, the other guys are not." Well, whose fault is that? And why do you have a different chain of command? Why aren't they lined up to you versus through supply chain then have different expectations? So yeah, it happens across industries as well.

Cathy Fisher: 14:30

Wow. And you know, that also affects the continuity of communications and, most importantly, the relationship building of the organization with its supply base. And then there's all kinds of things that start falling apart there in terms of communicating requirements, being able to partner together to develop new innovations, and that too.

Naseem Malik: 14:52

And especially over the past couple of years, where everybody was scrambling to secure critical suppliers, to secure timely deliveries, to making sure everything was on track. And, of course, fighting the fires on the pricing side, make sure they weren't being gouged. So this was the time where they had to be much more aligned and joined at the hip than ever before. And yet, if you still have these old legacy issues, it just makes their life a lot harder.

Terry Onica: 15:23

Speaking of pricing and cutting costs, do you think that's going to change? You know, typically, especially in auto, it's all about getting the piece price down. Do you think we're ever going to change that where we're going to really try to be more strategic, more collaborative?

Naseem Malik: 15:40

Yeah, that has been a pendulum that continues to swing, right, back and forth, back and forth. So you're absolutely right, once the initial effects of the pandemic wore on, and we're like, okay, we now have to adjust to this reality. Everything became, how do we make sure that we get what we need, when we need, where we need, regardless of pricing? I'm sure you're familiar with what was happening on the freight side. How do we go from 2, 3, 4, or $5,000 a container to what was it 20,000, 25,000 at its peak? Absolutely mind-blowing that it came to that. And now we're back down to where we were before. But then fast forward to the past six, nine months, manufacturing has caught up, the inventory lead times are down, and they're ready to now produce, but now suddenly demand itself. And so, now it's like, okay, we can't be sitting on too much stuff. Okay, these suppliers, maybe, were charging us too much. Go back and now beat them up and go extract more concessions out of them. Well, then, what happened to the relationship? What happened to all those critical suppliers that you needed? That's where it, yeah, there are progressive companies out there that were able to balance it, they were able to strategically look at their suppliers. They're more the large terror midsize smaller, and figure out how to not impact the ones that they needed more support, and they didn't want to drive them out of business. I think, traditionally, Terry table stakes for procurements by management people or savings have always been the table stakes. That is a part of it. I don't think there's any escaping that. But we have been able to show over the past few years, if not even beyond that, the overall value that we add is much more than that. So it's on the function to continue to show how we are working with the lifeblood of innovation when it comes to key suppliers. How we are even building talent within our groups, right? And we can be a supply chain of talent. One of the CPOs once mentioned this to me that they are regarded as being one of the best outputs in the company for talent. Because of the broad exposure, they can go into different areas, that's a great thing that they can be accounted for, for the value that they add. So there's so many different things that they can do that it shouldn't just be price, or it shouldn't just be only when they need to, they're going to say, "All right, what have you saved for me lately?"

Cathy Fisher: 18:04

Yeah. And there are so many other levers, if you look across supply chain, not just looking at the purchase, but looking at, you know, the transportation, your inventory management, and that all of those are contributing factors that oftentimes they're not looked at with the same level of scrutiny as the purchasing. The same you mentioned a little bit earlier on about technology. And, of course, Artificial Intelligence is the buzzword right now everybody's talking about it. So it's actually a two-part question. The first is, what are you seeing as far as the adoption of technology, especially artificial intelligence, into the realm of purchasing and supply chain? And then secondly, what do the emerging supply chain leaders, young people that want to get into supply chain, how do they need to prepare themselves from a technology standpoint?

Naseem Malik: 18:54

The latter part of the question is what we always like to preach to the young talent is just, now we'll go back to that learning agility, again, that a lot of these young professionals mentioned, that what attracts them to this function is the ability to make a difference, the ability to come in and do things, whether it's sustainability, whether it's helping their companies on the product side, or whether it's cutting-edge products. But beyond that, it's what we say is continue to learn as much as you can, that learning agility is what will set you apart. There's so much that you have available today than almost any of us have ever seen in our career. So to not be able to leverage that, not be able to set yourself apart is unfortunate because the more you embrace that and coming to that first part of your question, got it the more you embrace what's happening today, on the technology side, and understand that look, while it's not going to replace you, or replace your jobs. The people that actually use this AI technology will be in a much better position than people that don't use it even within our function. So it will replace people that don't use it. But it won't replace people that use it right, in a way, is what the message that we heard a couple of months ago at an ISM conference. And it was interesting that company after company, both small and large, were talking about how, as they understand the value that this brings them, they're excited about it. This is another Fortune 500 manufacturing company. What they said is that they went to Microsoft because they own, you know, OpenAI and ChatGPT and said, "Look, we want to bring ChatGPT behind our own firewall." So, Microsoft said, "Okay, sure." They don't even know what to charge it because it's such a new technology. And yeah, they're like, Oh, we're an enterprise, Microsoft shop, right? We have all everything from Outlook to all the tools and licenses. So you probably don't even need to charge it just bundle it all in. But the reason why they did this was because of: One, they wanted to be able to make sure their data is being safeguarded. So if you bring it behind your firewall, it's all just within your company. So there's nobody out there that data, whatever queries, whatever prompts you're putting in, is not going to anybody else. And then secondly, they want to make sure that their team members truly understand and then can play around with this and learn from this. And as they started, they were like, okay, we can take away so much of other non-value add, whether it's training, whether it's helping these young professionals on the contracting side, whether it's how do I put together a forecast or a complex hedging contract? They were talking about different raw materials that is linked to different indices. And when is the best time to put that together? What kind of contract and what kind of an end date, and it's bid all of that out. And they were just impressed beyond words. So, we are beginning to see a lot of companies do that and more partnerships, even big consulting companies are now announcing partnerships saying, "Yeah, we will work with the different generative AIs that are coming out there. And there's so much more than just ChatGPT, which we hear about. Google's got Bard. Yesterday, we heard Microsoft announcing a relationship with Meta, saying that we're going to create a platform, and then Apple says, hey, don't forget about us, right? Is AppleGPT coming as well, too? Because nobody synchronizes hardware and software better than Apple. So, if they can come up with a way to hook that up with Siri, they may leapfrog everyone. So, it's an exciting time.

Jan Griffiths: 22:33

We talked about supply chain talent. But what is a talent supply chain?

Naseem Malik: 22:39

Good question. We talked about an author that wrote a really good book on this called "Talent on Demand." Looking at the supply chain model as a natural extension of growing a talent supply chain, you look at the principles that we have, whether it's small batch manufacturer, to make versus buy to other key principles, what if we applied that on the talent side? So, the make-buy is a simple one. That is okay, do we train internally, our eight players or talented folks and put them in these key positions? Do we build out a bench, or do we go and buy this talent on the outside? So that depends on the company, the industry where they are in their lifecycle. That's actually one of the biggest one that we see. And as companies are beginning to do that, they're realizing now, as part of what's happened since 2020, is, there's never been more pressure to not only find talent but to hang on to talent. So this past three years, we saw salaries in supply chain go anywhere from 20 to 30% increase. We saw top companies, a lot of tech, and that over-indexed and hired too much. And then most of this year, they've been cutting that bag. But you've seen this just absolute surge in hiring across the spectrum because of the value supply chain brings. So that's where companies have this struggle, this battle for, okay, how much do you hire? Where do you hire? How much do you train? How much do you not train? And how is that going to affect retention? So we ended up hiring and training and only to lose them for somebody that pays a little bit more or it's not a little bit more. It's a whole heck of a lot more. We've seen groups being completely stood up supply chain functions, only to have them dismantled in 12 to 18 months because you've got big competitors out there, big tech companies that have targeted you and are now coming after your people. Whether it's an automotive company, whether it's a Tier-One supplier for the manufacturing sector, I mean, Amazon does this probably better than most, though Apple isn't too far behind. They'll find sectors of automotive industrial manufacturing, discrete manufacturing, even on the CPG side, where talent is really good and supply chain and just up to zero in on them and start plucking them away. So that is another battle Jan that is being fought across companies on, where do you find them? How do you hang on to them? And how do you get the most out of them?

Jan Griffiths: 25:13

Naseem, you're on the cutting edge of everything that's happening in the world of supply chain, and your background covers multiple industries. But let's focus you in again, on automotive. what is the one thing? What's something that they should be doing right now to help them build their talent supply chain and prepare for the future?

Naseem Malik: 25:37

So, on the talent side, I would say provide them the ability because it is in the top two reasons why company talent leaves their company. One, obviously being their leadership. Second, is the ability to be trained; the trainings have provided the opportunities to learn, whether it's in their own discipline or across a function. So, if you provide your talent within your company the opportunities to grow, if you train them, whether it's internal, or whether it's external, and encourage them, incentivize them, that is only going to help you and pay dividends.

Naseem Malik: 26:14

When you talk about training, I absolutely believe even in our in the automotive supply chain function, the digital, the IT side of it is probably almost as important as almost any other area that you can think of. There was a recent interview, I'm sure you may have heard of this. The CEO of Ford just gave an interview, Jim Farley; he was on a podcast. And they were asking him about the battle on the EV with Tesla. He basically admitted he goes, "Yeah, we've lost the tech battle with Tesla, not just us all automotive," he's like, "They're 20 years ahead of us." He's like, "Look, if you think about a car, there's about 150 modules that go into a car. From a module, it could be right engine, seating, all these different parts that make and every one of those now has technology. And this tech was never as prevalent before. And every one of those modules has their own subset of suppliers and technology. So, what does that mean, one module, you have to deal with Panasonic, and you got to negotiate with them. The other module, you're dealing with Verizon. The other module, you're dealing with some other suppliers. And here we are used to dealing with, let's say, steel suppliers, tire suppliers, engine components apart. But all of that now ties back to the tech side. And why is Tesla ahead of everybody? They've got all of that software, all of that engineering expertise in-house. And that's why they're two decades ahead of us; how do we compete when we have to go and negotiate with every single one of these providers not having that expertise that one company does. So, if you're in the automotive world, that should really perk your ears up it's like, you know what, even in our supply chain world now, in order for us to build a competitive car and to stay on the cutting edge, we have to understand technology because we have to go negotiate with the suppliers, we have to be able to speak their language, but then also bring that commercial value to these automotive folks by understanding how to negotiate, talking the bits and bytes when you're talking to these providers because, hey, you're now competing against other tech companies that also need semiconductors, that need these chips, that need these rare materials or, or lithium, or other things that go into making these batteries. You've got to be able to speak that and live in that world. So, because that is, that's your lifeline moving forward.

Jan Griffiths: 28:48

Thank you, Naseem. And that ties back perfectly to our 24 Essential Supply Chain Processes; Technology and Training feature prominently all the way through that process. And with that, Naseem Malik, thank you very much for joining us today.

Naseem Malik: 29:05

Thanks so much. Appreciate it.

Jan Griffiths: 29:10

Are you ready to find the money in your supply chain? Visit www.autosupplychainprophets.com to learn how, or click the link in the show notes below.