The four categories to consider in supply chain strategy (and how New Zealand ranks across all four)

01 December 2017

The key ingredient to supply chain strategy
What is the first thing you think of when it comes to supply chain strategy? Is it inventory? Logistics? Accuracy? Suppliers? Cost? While these are all critical components to any organisation’s supply chain, we are missing the key ingredient: the fuel. The spark behind end-to-end customer satisfaction.

Your workforce. Your employees. Your people.

The health of your workforce is vital to the success of your supply chain strategy. And with global collaboration becoming the number one driver of chain success, how your workforce compares to those around the world may determine where you rank in the global supply chain competition.

The four categories to consider 
Workforce policies around the world are constantly changing to keep up with evolving trends and technologies. So how do we determine the state of health of a country’s total workforce? This is where we need comprehensive data that considers these changes at the local market level.

The newly released Total Workforce Index (TWI) measures the relative ease of sourcing, hiring and retaining a workforce in competing labour markets around the world. A numerical value is assigned to each market assessed, which compares the opportunities and potentially negative impacts of entering one labour market versus another, which is a key consideration in global supply chain strategy.

To determine this value, an equal weight is attributed to four categories: Availability, cost efficiency, regulation and productivity. A high value implies that a market has the ability to support higher volumes of hiring for increasing volumes of work. What value did New Zealand achieve? The results may surprise you.

Ranking the total New Zealand workforce
Overall, New Zealand was ranked number one out of 75 assessed markets for total workforce engagement. While this creates a major competitive advantage for New Zealand’s national supply chain strategy, now is not the time to rest on our laurels.

The nation ranked third and fourt in the categories of regulation and workforce availability. The regulation ranking provides a relative comparison of how restricted the terms and practices of workforce engagement are. Workforce availability compares the skills available in each country and the likely sustainability of that workforce based on emerging and ageing workforce trends.

Regarding the remaining categories, New Zealand ranked 7th for productivity and did not rank in the top ten for cost efficiency. Productivity measures the number of hours an employer can compensate at base pay. Cost efficiency provides a relative comparison of wage, benefits, tax and operations metrics.

What does this mean?
The #1 ranking, combined with our nation’s flexible regulatory environment and ongoing commitment to upskilling our workforce, tells supply chain stakeholders around the world that New Zealand is the most favourable market to conduct business.

However, productivity gains must be a top priority for the New Zealand market if we wish to maintain our established global competitiveness. This means that it is now more critical than ever for New Zealand employers to create workplaces that can provide meaningful work, fair wage rates and continued flexibility in order to meet the demands of today’s modern workforce.

Fusing workforce strategy into supply chain strategy
The TWI rankings prove that the world is looking at New Zealand. No longer are we lost in the crowded Asia Pacific market. We are an established major trade nation. To capitalise on this, start thinking about the four categories of the TWI and how they apply to not just the health of your workforce, but to your overarching supply chain strategy. Ask yourself:

  • Does my organisation have the skills available to sustain an efficient supply chain strategy? If there are gaps, how can I upskill and train my staff to prepare for high volumes of work?
  • Am I providing my workforce with systems and regulations that will enhance supply chain operations? 
  • How productive and cost-efficient is my workforce? Am I providing my employees with the right balance of wages, benefits and time in order for my supply chain to operate efficiently?

To put it simply, take away your employees and your supply chain strategy does not exist. And with all eyes currently on New Zealand, there is no better time than the present to fuse your workforce strategy with your supply chain strategy in order to develop optimal solutions for your people and your supply chain operations.

Paul Robinson
General Manager, Manpower Group
Advisory board member, CSCM