From the outside, it would seem that your Human Resources (HR) department should have little to do with supply chain management, especially if you use a third-party distribution company. However, HR should play an active role in every sector that involves employee management.
How HR Impacts Your Company’s Supply Chain
While business owners may be concerned whether their supply chain is sustainable or low-cost, HR teams should look at the people manning their supply chain team to increase productivity.
1. HR is Responsible for Hiring if They’re in Supply Chain Management
If your HR department is directly responsible for staffing your supply chain management team, then they need the right onboarding process to complete this task. Everything from printing out the required paperwork for new hires to training staff needs to be streamlined to be effective.
With the right team, customer satisfaction and organizational performance will increase, whereas an unqualified member of staff could cause missed deliveries or product shortages.
2. HR May be Responsible for Supply Chain Workers’ Conditions
The Rana Plaza tragedy in 2013 caused thousands of factory workers to lose their lives. There’s simply no excuse for employers to support poor working conditions in the third world. Your HR team can be used to research international supply chains to ensure correct employee treatment.
Remember that it isn’t the name of the supplier that people remember when something goes wrong, it’s the name of the company being supplied. Never support poor international suppliers, as customers do their research and won’t take ignorance as an excuse for your practices.
3. HR Can Create Partnerships Between Suppliers and Employees
Employers that have a direct impact on their supply chain must understand the importance of a strategic partnership between suppliers and organizations and between employees. Those hired need to know how to analyze a situation and make appropriate judgments based on data.
HR departments should hire candidates that want to help their organization reach its goals. Your staff should favor long-term partnerships over short-term profits and gains. Startups that focus on long-term partnerships are less likely to experience difficulties, such as product shortages, supply chain disruptions, and unhappy customers who are affected by late deliveries.
4. HR Needs to Extend its Supply Chain to Avoid Dependence
Most companies depend on multiple partners and services to keep their supply chain strong, but you can’t rely on one organization for your supplies. The right talent will know how to operate within a symbiotic relationship while also having the forethought to expand their supply chain.
HR should make sure that the people operating their supply chain are able to meet regulatory compliances, either through experience or by possessing the right certification or skills. If you’re unsure of an applicant, ask them to perform their duties as a part of a training test run.
5. HR Must be Transparent to Build Trusting Relationships
No supply chain can exist within a bubble; it relies on multiple steps, people, and processes to succeed. For this reason, HR needs to be transparent with staff in order to be trustworthy. At the same time, HR should hire staff who can gain people’s trust and easily formulate connections.
Supply chains are dependent on coordination, so HR needs to listen to feedback if they want to improve the onboarding process, encourage joint planning, and reduce supply chain risks. Hire team players that value the opinions of others and are capable of handling constant criticism.
6. HR Should do Their Part to Protect Organizational Confidentiality
Trust is also created by what isn’t said. HR must play its part to protect specialized assets, proprietary information, and other sensitive factors that need to be maintained. If HR hires the wrong staff, there’s a possibility that your partners will face monetary and reputational losses.
Consider background checks if you’re concerned that a new hire could sabotage you by leaking information. However, proper training and vetting can eliminate untrustworthy candidates.
7. HR Can Coordinate Interdependence Between Departments
There are three examples of interdependence found in a supply chain. Pooled interdependence refers to teams that can function without guidance, sequential interdependence includes processes that must be done sequentially, and reciprocal interdependence requires a lot of back and forth. Here’s what each interdependence example looks like in most supply chains:
- Pooled Interdependence: If an assembly line has multiple employees that work alone to assemble a single product (radio), you’re conducting pooled interdependence. This practice is found in sales teams who pool their numbers together to reach a shared goal.
- Sequential Interdependence: If an assembly line assembles a radio in a specific order, with or without guidance, the practice is considered sequential interdependence. Sales teams who use a step-by-step process to qualify clients are operating in a sequence.
- Reciprocal Interdependence: If an assembly line completes the radio out of order or fixes a part of the radio at the end of the assembly line, you’re using reciprocal interdependence. Sales teams that change their promotional materials or the head salesperson on a project after receiving feedback are also utilizing this method.
The talent required to make each process work depends on your supply chain needs. But whatever it is, you need your team to embrace your project workflow to be successful.
Although HR doesn’t seem to belong in your supply chain management process, that isn’t the case. Without an empathetic, skilled, and knowledgeable HR team at the helm, you’d have a hard time hiring supply chain talent and working with companies that value human rights.
But that’s not all. HR staff that understands supply chain management can streamline your processes by building trusting relationships with suppliers. They can also make policies that promote transparency, organizational confidentiality, and the right interdependence strategy.
It’s clear that you can’t have a fully optimized supply chain without a well-trained HR team, so don’t make the mistake of keeping your human resources staff out of the management process.
Claire Jane Ward is an experienced writer with a passion for creating insightful and engaging content that’s easy to digest. Occasionally she spends her time playing with her cat while listening to her favorite podcasts.