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Strengthening the links in the chain

Posted by: and , Posted on: - Categories: Employer ownership, Innovation

Have you ever considered how much of your business's work is conducted in your supply chain?

Is it 50%? 60%?

Here at BAE Systems, it’s over 70%.

The supply chain can make up 61% of total employment or over half the overall value added in some sectors. I think this alone is enough to show us how important it is for UK firms to invest in our supply chains.

I believe that a business is only as strong as the weakest link in its supply chain. All of our success depends on each other. We need to break down barriers between the companies at the heads of supply chains, and the companies that supply them. We need to help our supply chains to grow and improve, and to do this, we have to communicate our common interest and common goals to them. This is why I led a challenge from UKCES, asking UK firms to innovate, and to explore ways of driving up management and leadership skills in their supply chains.

Management and leadership skills have to be at the heart of improvements in supply chain capabilities. These are the skills which support all other aspects of an organisation to work at their strongest. Well-managed firms grow faster, make more profits, and hold onto their best staff. And yet, whilst some UK companies are among the best managed in the world, generally our management skills tend to fall below international standards.

On top of this, managers are the occupational group least likely to be trained. The recently published UKCES Employers Skills Survey 2015 shows us that 48% of Managers received training compared to 63% for all staff - our skills don’t add up, and we suffer in the global economy because of it.

The seven projects funded through this challenge looked to close the gap, by spreading management best practice through their networks.

These projects were in the construction, legal and manufacturing sectors and tested a wide range of approaches. From highly tailored, targeted interventions working with individual employees or teams, to wide-scale online learning platforms being rolled out to the supply chain of a whole industry. The range of approaches reflects not just the sectors involved, but also the specific management development needs of different businesses within different supply chains. One size does not fit all.

Despite these variations, a common lesson emerged from the seven projects: supply chain leaders (and trusted intermediaries) have a significant role to play in driving up management skills. Their networks already exist, the relationships are in place, and these organisations have the insight to understand what is needed and the influence to encourage action.

This new type of mutually supportive supply chain relationship is not just possible – it needs to be more commonplace. When the supply chain is strong at every link, we can all achieve our full potential.

Find out more about the seven projects.

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