Role of Human Resource as compared to Supply Chain Management
Contrary to normal perception, human resource (HR) is not simply a people-facing function. It’s has a lot in it to be considered as a core-competency in any business. But for some reason, most businesses are yet to realize the full potential of the HR function. Very often HR fails to get the due credit or empowerment necessary for it as the business is not clear as to what should be expected of it. Because of this lack of clarity, HR is entrusted with unrealistic and unaccountable goals at times and hence, HR seems to be at the receiving end of all the blames and troubles.
Additionally, the quality of talent in HR functions is also not up-to-the-mark. This is expected as they have been brought up on seemingly unclear norms and expectations. As a result, they have not been able to clarify their position or articulate their contribution to the business.
The HR functions in a supply chain industry face a similar fate as well. Here we will discuss how crucial role the HR function can play when it comes to the supply chain processes-
- Supply of raw materials – We know that it is the duty of the SCM function to take care of the sourcing of and bringing in raw materials. In a similar way, it is the duty of the HR function to bring the best available talents required to operate the business appropriately. HR will partner other departments to ensure that all the important processes are in proper order before the final assessment and selection are made by the functional department. HR does the critical task to ensure that a standard and well-developed capability is followed across the organization and talents are hired through a consistent assessment process. Also, HR needs to ensure that the actual cost of hiring is strictly within the established benchmarks.
- Transition from raw materials to finished goods – SCM does the work of bringing in the goods and forwarding or making them ready for the next process. Similarly, it is the job of an effective company management to make sure that every employee receives the inputs in a proper way so that he can perform to the best of his ability. Thus, he can contribute to the organizational growth as well as grow himself, in conformity to the culture and values of the organization. This role of the management is overseen by the HR function as it performs the role of the manager to each and every employee. HR keeps an eye that a well-defined and clear process prevails in the organization and every manager is skilled and competent enough to understand this. HR does this by preparing periodic MIS on the health/performance of the talents in the organization and that of the organizational processes as well.
- Conscience keeper -HR plays another vital role in keeping the conscience in an organization. It keeps a proper check on whether the operations of a business are consistently conforming to its values or not. It has to stamp its authority and raise alarms if the culture is not supporting to the strategy or there is a deviation from the mission & vision of the organization. In this role, HR needs to work in close collaboration with the top management (CEO and other leadership teams) and must tell the truth in an unflinching and ‘no-nonsense’ manner.
- Quality assurance and quality check – In a supply chain business, it is in the scope of the SCM to ensure a proper quality assurance and quality check before the goods are forwarded to the next step. In a similar manner, the HR team needs to establish if the entire system of processing the input to output is conforming to the prescribed designs and expectations or not. HR needs to wear the ‘hat ‘of a quality checker at some critical points in the business processes. Also, in collaboration with the managers, it needs to play an important role in quality assurance as well, in order to raise the level of capability of each individual.
- Taking care of the transactional metrics – Just like every function in an organization is responsible for some core activities assigned to them, the HR team is also accountable for some unique activities. It is their responsibility to keep the compensation benchmarks in an organization up-to-date as per industry standards and ensuring seamless implementation of transparent and consistent policies across the organization are just a few of them. Of course, their functions are multi-dimensional and are not limited by the boundaries of their core competencies.
The SCM can benefit by applying the HRM practices in it
From the above discussion, we have seen that there is a definite similarity between the SCM and HRM functionality. In fact, the SCM can apply HRM best-practices to better manage their activities.
- Use of HRM practices can unify the supply chain
Various factors such as the globalization of the supply markets, product proliferation, shorter product life-cycles etc have made business environments extremely complex. HRM practices can unify supply chain partners to develop inter-farm relationships and create valuable knowledge-sharing routines. In this way, they can have a more streamlined and coordinated supply chain and gets that much-needed competitive advantage.
- Better use of ‘people’
The supply chain is a complex network of service providers, raw material suppliers, distributors etc and the success of this network depends heavily on the achievements of people involved in every step herein.
The HR practitioners have put in place effective processes and practices that can improve the performances of the ‘people’ and the firm as a whole. These can be implemented in a supply chain to achieve its ultimate objective- to improve the performance in every step.
- Availing benefits of HR strategies
A traditional HR strategy refers to developing flexible systems involving HR practices to promote the business strategies of the organization. Application of these strategies in a supply chain provides broader benefits such as better management of SCM partners, better prediction of labor demand/supply across the supply chain and many more.