Walmart is in the news again – but this time it’s for offering $20.37 per hour for supply chain positions – with benefits such as health care and tuition assistance – at a national supply chain job fair. The story follows the widely reported news that Walmart is seeking 20,000 new hires to work its warehouses and drive trucks. At the same time, over the past month there have been articles discussing the difficult working conditions confronting truck drivers as well as reports about a driver shortage leading to shortages of goods as varied as chicken, milkshakes and candy at fast food restaurants, and fuel at gas stations.
These are not issues unique to the UnitedStates, or the United Kingdom. They are issues that businesses and governments all over the world must grapple with even as the COVID19 pandemic continues to affect supply chains in ways that have surprised people who previously took them for granted.
There is a common fallacy that supply chain jobs are limited to “trucks and boxes”, but that impression reflects how little appreciation the average person has for the huge exercise in coordination that occurs to make life as we know it possible.
In their October 2017 paper, A New Categorization of the U.S. Economy: The Role ofSupply Chain Industries in Innovation and Economic Performance,Mercedes Delgado and Karen Mills find that as much as 37 percent of jobs in theUnited States may be categorized as supply chain jobs, and this estimate may be conservative. Moreover they also found that supply chain jobs are typically higher paying, tend to have a higher science, technology, engineering, and mathematics (STEM) intensity than average, and also contribute more to innovation within the economy than usual. Delgado and Mills also found that supply chain jobs pay significantly better than average.
If this seems surprising, consider also that any companies’ supply chain costs as a percentage of sales can range from as high as nearly 80 percent in the Oil & Gas industry to about 35 percent in the restaurant industry. Generally, companies seeking to improve profitably are better off pursuing strategies that reduce costs in their extended supply chain operations than investing in marketing and advertising; The former improves profits without increasing expenses. The latter may increase revenues, but that strategy definitely increases marketing and sales expenses, perhaps by proportionately more than the increase in revenues.
Supply chain jobs include knowledge work related to sourcing and procurement, supply chain network design and management, distribution, the management of physical infrastructure like warehouses and other distribution centers, as well as transportation and logistics. Yes, supply chain jobs also include work that is physically demanding – such as the freight handlers, order fillers, lift drivers, and order pickers that Walmart is seeking. Yet, note that on average the positions that Walmart seeks to fill pay about $20.37 an hour, almost double the $11.22 an hour that Statista reports as the national average across the US in July 2021.
From my position as an early stage investor in supply chain technology, one of the most exciting trends I have the privilege of bearing witness to is the role that technological innovations play in making people who work in all supply chain jobs more effective at what they do. A related trend is the increasing interest by entrepreneurs and technologists in building innovations to solve some of the problems that create unnecessary bottlenecks in supply chains.
Information and data are the lifeblood of every supply chain, and there are now numerous startups building automated decision-analytics platforms that use the power of software to make decisions more quickly, more accurately, and more automatically than any human being could, freeing human experts to focus on those situations in which a computer algorithm us unsuited for the task due to the complexity and uniqueness of a situation.
For those positions that require more physically demanding labor, startups are creating software-enabled wearable devices that monitor a worker’s physical movements and provide an instantaneous warning when the worker is at risk of sustaining an injury because of the way that individual is lifting a package, for example.
One radical strategy to fight the driver shortage? One startup has built a training simulator to enable companies to train truck drivers at significantly reduced cost. The simulator enables companies to offer experienced workers in other areas of their operations the opportunity to train as truck drivers if they desire.
To be clear, technology is no panacea to many of the underlying problems that are plaguing the trucking industry, where truck drivers must endure inhumane working conditions, for example. Nor can technology fill-in adequately where regulations and policy are the tools better suited to ensure supply chains continue to function.
However, given how important supply chains are to the functioning of society, I am greatly encouraged at the amount of new technology that is being developed to empower the people who keep the world’s supply chains running, come hell or high water.
By: Brian Laung Aoaeh, CFA
Aoaeh is a Venture Partner at NewarkVenture Partners, and a Cofounder and General Partner of REFASHIOND Ventures.Both Newark Venture Partners and REFASHIOND Ventures invest in early stage supply chain technology.