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Upgrading human resource software in logistics management

By Walter Glass

After 15 years in tertiary management education for the logistics, transport and supply chain sector for both Massey University and the Logistics Training Group, one of my key long-term observations is that while leading companies invest heavily in upgrading their human resource management skills base, the majority are reluctant participants.

The reasons for this are most often couched like “the company will only be educating them for someone else”. This suggests more that the company’s management is insecure with its own ability, and the retention of staff is probably a reflection of this.

Where staff members are challenged, educated to keep abreast of technology and management methods, and given freedom to make improvement decisions, then high morale and efficiency seem to rule. When companies endorse, pay for, and actively encourage education, invariably the management is competent, confident in its own ability, and continually upgrading its own human software capacity as well.

Almost daily we hear of multi-million-dollar investments in leading-edge information technology and equipment that is continually being upgraded, all of which collectively accounts for sums that would clear the debt of some Third World nations. Business accepts this expenditure axiom, perhaps with one exception – the ‘human resource’ and its required software upgrades.

Upgrading the human resource

So what about the investment in upgrading the ‘people machine’ or ‘human resource’ – especially at the operational and tactical management levels? Managing all this new technology, its applications, upgrades, innovations, and breakdowns requires significant knowledge upgrades and assimilation time. Yet often the human software upgrade is only given a cursory thought, completely neglected or entirely under done.

This is now a major Achilles heel for many companies in a market short on key skills and especially true of the small to medium enterprises (SMEs) which make up the majority of New Zealand companies. These SMEs often fail to recognise their own management shortcomings, have no succession planning in place, and do not consider that human resource upskilling at a management level is their responsibility or a priority.

Is the human resource expected to be a self-upgrading unit which, once employed, then upgrades itself automatically at its own cost, in its own time, then provides any benefit or potential return it gains through the upgrade back to the company it is employed by at no cost to that company? Yeah right!

Unfortunately, this is a view held by some companies in this country, many of whom also bemoan the management skills shortage in New Zealand. Well, hello! The Australian logistics and supply chain management pool is aging, there are insufficient replacements, their remuneration is better than here, so the problem is about to get worse.

The lack of New Zealand investment in skills upgrading for operational managers particularly is now a major issue.

A futuristic view

In the early ‘80s I sat in a Massey University lecture and listened to Dr Philip Dew tell us that within 15 years we would see people working from home with their own computers and communicating globally through them; that we would talk to one another on phones that we would carry everywhere: and we would see the general trend across the developed world where people would reduce their hours of work to perhaps three days per week in order to gain a better quality of life.

The class was fascinated, if not a little bemused. The PC had only just been invented around 1980, the hard drive did not exist beyond the five-inch disk storage of 360 kb, and terabits might as well have been pterodactyls. People were employed at 15 and left at 65, and we were still marvelling at the fax machine.

The most provoking thing Philip said, however, was that we would each go through several career changes in our lives, and with each there would be the need to retrain substantially to deal with the new role, its technology, and the evolving organisational structures we would encounter; we were on a path of continual education.

How right he was – the people machine certainly does need continual development!

Philip’s predictions have all come to pass, except the reduction in weekly working hours in New Zealand, but perhaps that might partially explain why he shifted overseas.

Keeping pace with technology

Over the last decade there have been astounding advances in logistics and supply chain technology uptake. This industry has fairly embraced the technology opportunities, so much so that the emerging jargon has one’s head spinning with endless acronyms: ERP, SCOR, VOIP … On and on it goes at an ever-increasing pace as industry chases the endless quest for supply chain efficiency Nirvana.

One sometimes wonders at the returns on investment. Over the last 10 years New Zealand companies have collectively invested over a billion dollars just in enterprise resource planning (ERP) systems, associated licences and equipment. However, the operators of these ERP systems, namely a company’s people machines or human resource, often report these systems’ performance as frustrating.

Unfortunately, the real cause of the dilemma is often not so much the ERP system in itself but rather that the interface is not user friendly. Thus despite the monumental investment, such an ERP system is about as compatible with the people machine software as Green Party members at a West Coast sawmiller convention.

If an organisation’s people machine is to maintain compatibility with other logistics technologies, then the company must invest in upgrading this resource to maximise their return on investment, especially the operational and tactical management skills.

It has been very noticeable in the last five years how the systems and technologies spend has been in the billions, yet associated investment in education and training has reduced significantly, and student numbers have dropped accordingly. At the same time industry is calling for more skilled people.

Does anyone see the irony here?

Walter Glass works with the Massey University–Logistics Training Group programme and is course controller for the UK Professional Diploma in Logistics & Transport. He has worked in the Australasian logistics and supply chain sector for over 15 years as a consultant and educator. He can be contacted at info@LTG.co.nz