Poll: Planning and labor challenges for manufacturers and distributors

Nearly all executives (95%) say labor management is the most critical factor in keeping up with increasing demand.

Hiring skilled talent is the most frequently reported labor challenge facing organizations right now, according to more than three in five executives (62%) polled. Second-tier challenges include understaffing, increasing productivity of existing workforce, and high turnover.

The three technologies cited most often as contributing to organizations’ sales and operations planning processes are Microsoft Excel, demand planning/forecasting applications, and ERP applications.

2-MINute TAKEDOWN

Labor is the driving force

Experience matters

It may be time for an upgrade

Manufacturing production is expected to return, if not exceed, pre-pandemic levels in the third quarter of 2021. How will manufacturers and distributors balance increased demand with continued supply and labor challenges? Data from our recent poll conducted with Supply Chain Dive highlights planning and risk management trends in production and distribution.

Top technology resources for sales and operations planning

More than half of executives cite the following three technologies as contributing to their organizations’ sales and operations planning processes:

Microsoft Excel

While Excel may have previously met your needs, a more sophisticated system may be necessary to manage increasing complexities and dependencies

Demand planning/forecasting applications

Enterprise resource planning

75%

60%

51%

InBrief

Digital supply chain transformation to improve visibility and agility

Other Answers

Other frequently used technologies for sales and operations planning processes:

Capacity planning applications Advanced planning and scheduling (APS) applications Google Sheets/Docs Workflow management applications

38% 33% 30% 30%

Technologies used less frequently:

Manufacturing resource planning (MRP) Artificial intelligence applications Master production schedule (MPS) Internet of Things (IoT) applications Machine learning applications Manufacturing execution system (MES)

24% 20% 18% 15% 12% 3%

Labor is driving production and supply planning

Executives almost unanimously

(95%)

say that labor management is important to their production and supply planning.

See the breakdown

say it is very important

67%

say it is somewhat important

28%

say it is not that important

Is labor management is important to your production and supply planning?

say it is not important

are not sure

Measuring and improving labor productivity

More than two in five executives say their organizations use two metrics to measure labor productivity:

Measuring labor hours

Number of orders (or units) shipped

43%

See OTHER METRICS USED

Lines, orders, or units per labor hours Units produced Real-time employee monitoring/tracking

36% 25% 23%

Additional labor challenges

report that hiring skilled talent is their top labor challenge

62%

Second-tier challenges include:

Understaffing

Increasing productivity of existing workforce

High turnover

45%

35%

34%

See Less frequently mentioned labor challenges

REPORT

West Monroe’s Quarterly Executive Poll—Q3 2021

Less frequently mentioned labor challenges:

Maintaining culture Dealing with remote working arrangements Hiring while COVID-19 unemployment relief is still available Upskilling existing workforce Too much overtime Overstaffing Other challenges

28% 25% 24% 21% 14% 10% 3%

Consider getting an outside perspective

are not considering hiring external consultants

48%

say they will hire external consultants

30%

are not sure

22%

Offering

Supply Chain Assessment & Optimization for Manufacturers

West Monroe, in collaboration with Supply Chain Dive’s studioID, conducted a poll to gauge how manufacturers and distributors are managing demand, supply planning, and labor challenges. The poll was conducted June 4-9, 2021, and included 130 participants.

About the poll

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About the respondents

Participants represented the following industry sectors and different parts of the supply chain.

Consumer products manufacturer (brand owner) 3PL Industrial products manufacturer (brand owner) Distributor/wholesaler Retailer Contract manufacturer Other

25% 18% 16% 14% 11% 4% 12%

Participants included a wide range of job titles and functions.

CEO/COO/CFO EVP/SVP/VP of supply chain or operations Supply chain, operations, logistics, or procurement director Supply chain, operations, logistics, or procurement manager Other director or manager Production or supply chain planner Other finance or accounting title Other sales, marketing, or analyst title Other

15% 5% 15% 26% 11% 5% 4% 14% 5%

Closely following metrics included:

Organizations are split on whether or not to hire external consultants to deal with supply chain challenges.