MHI Annual Report Highlights Talent Shortage, Pressures to Go Green

The challenges of finding, hiring and retaining the right people for supply chain jobs prompted the top two concerns of industry executives, according to the 2023 MHI Annual Industry Report, “The Responsible Supply Chain: Transparency, Sustainability, and the Case for Business.” Presented March 22 at the ProMat industry show and conference in Chicago, the report, the tenth in a series of annual industry reports published by MHI and Deloitte, is based on a survey of over 2,000 supply chain professionals. 

Asked to identify the top 5 company challenges, 57% of those surveyed chose “hiring/retaining qualified workers” and 56% cited “talent shortage.” These beat out “supply chain disruptions/shortages” (53%), “out-of-stock situations” and “customer demands for customization” (both 52%).

Nevertheless, MHI’s choice to focus on sustainability and responsible corporate supply chain strategies was explained by the fact that nearly half of this year’s survey respondents (48%) said they face increased influences to adopt a more sustainable supply chain. Reducing Scope 3 emissions is now a top priority at 23% of the companies surveyed, and 13% say they are changing their business structure to enable a circular supply chain.

As ever, technology was top of mind at this industry event. Some 74% of the supply chain leaders surveyed by MHI said they are increasing their supply chain technology and innovation investments with 90% saying they are planning to spend over $1 million, an increase of 24% over last year. Thirty-six percent plan to spend over $10 million, up 19%. This investment includes solutions for improved supply chain resiliency, transparency and sustainability as well solutions for the ongoing workforce shortage.

Top focus areas for sustainability were found to be electrification (40%), natural resource management (29%), water usage (27%), and transition to renewables (27%).

Industry experts on a panel discussion that accompanied the launch of the report, moderated by
Wanda Riddick Johnson, supply chain operations and automation leader at consulting firm Deloitte, identified “uncommon” collaboration as an important factor in agreeing and achieving sustainability goals. 

“To achieve supply chain sustainability, you need empathy. You need to put yourself in the shoes of another person, so you can come up with bigger, better, faster ideas,” said Amanda Davies, Chief Procurement and Sustainability Officer Mars Wrigley at Mars.

Biswaranjan “Bish” Sen, chief product supply chain officer — beauty & wellbeing at Unilever, said he imagined it would not be long before consumer products bore detailed information about their carbon footprint, in a way commensurate with the in-depth nutrition facts that have emerged on food packaging over the last 30 years.
Professor  Donnie F. Williams Jr. executive director of the Supply Chain Management Research Center at the University of Arkansas, said data governance was a major, emerging issue. There are flows of three things in supply chains, he said – products, finance and information. “Information is the most valuable of those three right now,” he said. 

But the subject returned often to the problems with labor. “Supply chain has not been a very sexy industry,” said Kristi Montgomery, vice president, innovation, research and development at Kenco Group, emphasizing a need to get college leavers excited about the industry. She noted significant changes in the nature of the work, and a need to change mindset and strategy accordingly. "The distinction between blue and white collar (jobs) is becoming blurred,” she said.

John Paxton, MHI’s chief executive officer introduced the annual report with a video of a roller-coaster, over which he delivered a narrative about the hair-raising ups and downs of the last three years. Paxton struck a positive note about where the industry finds itself now. “Any time there’s changes, there’s opportunities,” he said. “This year, it’s about connecting the dots so you can build sustainability into your supply chains.”