In November, the University of Tennessee Global Supply Chain Institute published its latest white paper, “Unlocking the Potential of the Gen XYZ Labor Force,” by Michael Burnette and Ted Stank. The paper summarizes research by the Advanced Supply Chain Collaborative, a think tank partnering faculty experts with industry professionals to enhance business performance, enrich teaching, and cultivate supply chain excellence. Read the introductory blog post.
Our recent white paper aimed to identify generational best practices to improve productivity and talent results in North American manufacturing. We interviewed senior leaders, from executives to plant managers, in 15 benchmark companies across six industries: food and beverage, information technology, consumer packaged goods, power, automotive, and construction.
During interviews, every company aligned on four major strategic elements of North American labor management strategy related to the new generation of supply chain employees.
- Gen XYZ empowerment is a cultural issue. Best practices and inputs were centered on actions, policies, and systems that would create a high-performance culture.
- The foundational principles of High-Performance Organizations (HPO) still apply. Several started their generational organizational design renewal work by trying to create a replacement for HPO but concluded that current HPO pillars transcend generational elements. The 21st-century winning supply chain culture will be based on adapting HPO to Gen XYZ employees. That means focusing on business results, ownership by all, and being the best you can be.
- Leadership (authority) is earned, not given.
- Best practices require a mature organizational culture. Foundational organizational work may be necessary to implement the following six practices. A mature culture has thrived using the HPO model and is ready for the next step.
North America Large Company Supply Chain Operations Best Practices and Examples
Below is a condensed list of the six best practices with bullet-point examples for each. The full explanations and examples are available in the white paper.
1. Career/Achievement Speed
Gen XYZ employees are not willing to wait for advancement. They will switch companies to fill personal, short-term advancement opportunities. Companies shared examples of employees advancing to higher levels of responsibility too quickly, with poor results following. So, they modified career progression systems to meet the need for speed while ensuring employees were prepared with the resources to take on greater responsibility.
In the 1980s and 1990s, under the HPO model, most manufacturing plants moved from around 50 job classes to four or five-level systems (with contribution curves). Benchmark companies maintain this limited level system but have created “levels within levels” to enable Gen XYZ employees to be recognized for progressing up the ladder. This multi-layered system with sub-levels (e.g., 1a, 1b, 1c) may consist of new projects, skills, and certifications and are qualification milestones with high standards to recognize progress along the journey.
Four- or five-level pay systems are considered more productive, straightforward, and simpler to manage. Four-level pay systems remain a best practice with younger generations of workers.
Examples of career/achievement speed from benchmark companies
- An 18-month role rotation system was created for technicians.
- Menus for career growth, with options for multitasking, leadership growth, or role mastery (depending on individual personality), were designed.
- A system to manage risk through robust certifications/qualifications for increased movement/rotations was established.
- An “easy-to-go-backward” system (i.e., self-demotion with company alignment) was developed for over-committed employees.
- A ladder of sub-levels for each qualification was built to manage complex projects.
- Rotations back to core work, such as production and freight loading, were required to keep employees with largely offline roles grounded in the business.
2. Extraordinary Flexibility
Gen XYZ employees are most productive when the system is highly flexible. The system should include shift schedules, work processes, paid time off, and flextime for personal needs, such as medical appointments or childcare. A common benchmark supply chain approach is moving from a rule-based to a principle-based system.
The standard company, plant, and department rules shifted to meeting the needs of teams and individuals while also meeting business needs. Leadership defines the business needs; teams and individuals decide how to accomplish them. Benchmark companies have been able to improve flexibility while increasing focus on desired business outcomes.
Examples of extraordinary flexibility from benchmark companies
- Standard rules, systems, and processes were eliminated. Team members and individuals created the team operating process.
- Trading shifts and flexible schedules were allowed.
- Eliminating absence days or a fixed number of PTO days.
- When one company had several employees absent because of a lack of reliable transportation, they added a new benefit that provided $100 in ride-share gift cards per month. About 10% of employees exhaust the cards monthly, with 25% utilizing the benefit.
- A self-work scheduling app (“My Work App”) was purchased to allow employees autonomy when picking shifts. Absenteeism was reduced, and many full-time employees began scheduling part-time hours, reducing the full-time workforce.
3. Intimate Personal Development
Younger employees desire continuous opportunities for personal development. They demand more detail and a business commitment to their growth plan. The goal is for them to know where they are, where they’re going, and what options exist. Beyond personalized development plans, Gen XYZ employees want flexible and easy-to-manage systems. Benchmark companies have responded with systems that include virtual skill acquisition (reducing reliance on print materials and lectures) that are open-sourced, portable, self-paced, and incorporate network or social media elements.
Benchmark supply chains are investing time and effort into intimate, personal development plans. While doing so, they’ve increased expectations that these plans be business-focused and deliver critical results. The focus is on offering personal and business needs.
Examples of intimate personal development from benchmark companies
- A standard of 1.5 days per quarter was allotted for personal development to ensure it was a priority.
- Focus was placed on certifications that can be visual recognitions for employees to own and carry. These include Lean Six Sigma Black Belt, OSHA, QA, and SCPro.
- Tracking personal development using QR codes or app-based systems.
- One Fortune 500 company moved part of its Research and Development (R&D) to plant sites to provide career opportunities and scale advantages for technicians.
4. Digital Environment
Gen XYZ employees flourish with new technology and are passionate about supporting automation projects that free up personal time. The emergence of affordable robotics has also reduced the need for manual labor.
Benchmark companies utilize the Gen XYZ preference for digital to eliminate previous systems that the Baby Boomer generation hesitated to give up. An excellent example is the use of spreadsheets in planning. Today’s end-to-end ERP planning systems do not require spreadsheets, which credit potential redundant data that fostered errors.
Examples of digital environment from benchmark companies
- Multiple companies used robotics and ‘bots’ automation projects to create job enrichment.
- High-tech offices, conference rooms, break areas, and labs are being built in plants to reduce meeting time and improve decision-making.
- Decades-old manufacturing planning tools like Excel are being eliminated and replaced with new digital tools available in current end-to-end ERP systems.
- Virtual reality tools like Google Glasses are used in plants for training, equipment checks, and maintenance. A food plant in Mexico uses this technology to instantly access the standard maintenance procedure, example videos, and verification of proper maintenance protocols.
- A Mexico plant uses drones to complete preventative maintenance checks in the processing area, enabling technicians to access difficult-to-reach areas to ensure all maintenance is completed on time.
5. Time-Based Rewards
Members of Gen XYZ value experiential rewards over historical monetary rewards to recognize achievement, contributing to the challenge many of the companies we interviewed face when filling overtime needs.
For company leaders, the world has turned upside-down. While Baby Boomers consider premium overtime pay a significant reward, Gen XYZ’s passion for personal time can outweigh financial incentives. The average technician now has the basics to live and operates at a higher level of the Maslow hierarchy of needs, focusing on psychological needs such as belonging and esteem.
Examples of time-based rewards from benchmark companies
- One company offered two days of vacation as a reward for significant cost savings on projects.
- A pay system was adjusted from time- or experience-based requirements to “pay for performance.”
- To accommodate requests for more personal time, one week of vacation was added for new hires (increasing from two to three weeks in the first year of employment).
- A vacation purchase program was established for technicians and became popular among employees.
6. Connections and Convenient Alignment with Values
Finding purpose in work is especially important for members of Gen XYZ. They like connecting their work with their values and generally thrive on connections and establishing trust.
Gen XYZ employees thrive when their values align with their employer’s (e.g., DEI, sustainability, and fair labor practices). Developing personal relationships, in or outside of work, and not necessarily based on hierarchy, is also important for younger employees to feel grounded in the company. Their need for value alignment and connection must intersect with the best practices mentioned above (especially regarding time and convenience).
If the employer’s attempt to meet a younger employee’s passion for an issue of great importance is either inefficient or requires too much effort, they may encounter a disconnect between the stated desire and actual practice. If the company responds to an increased interest in recycling by removing personal trash bins and placing single trash and recycling receptacles in a distant part of the office, for example, they may receive complaints or see inconsistent usage from Gen XYZ employees.
Examples of connection and convenient value alignment from benchmark companies
- Strong diversity, equity, and inclusion (DEI) and sustainability programs or culture are prevalent to attract and retain talent.
- Recognizing the importance of convenience for issues like sustainability, the company must make it easy to tackle problems or members of Gen XYZ may not participate or blame the company when efforts fail.
- One Fortune 500 company sold the purpose of its plant—making sanitary products that help people during disease outbreaks—by incorporating visuals, signage, or involving families.
- Creating multilingual language systems.
Other Findings
The six best practices represent the consensus input from the 15 companies and experts we interviewed. During this process, GSCI collected additional input and data on actions and practices that did not meet the standard for inclusion in the list. In some cases, the benchmark supply chains did not consider these best practices as their systems have been in place for multiple years. However, we believe this information to be valuable to supply chain professionals.
| Partnerships with schools and education providers | Building relationships with middle and high schools, community colleges, technical schools, and software companies to partner on training programs, recruit interns, co-ops, flexibility software, etc. |
| Renewing hiring and onboarding | Significant system renewals to hiring systems through internships across broader regions and earlier brand building. Longer onboard systems using visuals, videos, games, and experiential tools. |
| Trust and autonomy | Eliminating rule-based systems in favor of principle-based systems. Managers focus on “what needs to be done” and ensuring the qualification is robust. Individuals and teams focus on the ‘how.’ |
| Business ownership | High levels of energy created by individual/team involvement in external benchmarking business information (e.g., results, new products, programs, investments, etc.). Communication of this data can be virtual. This is the same historical HPO principle that transcends generations. |
| Gen XYZ manager diversity | Technician teams excel when their first-line management is Gen XYZ diverse. Benchmark companies have invested in team-level management/leadership skills to succeed in the new environment/culture. |
| Clear core and non-core work | Organizations that overtly communicate what the core work is in an organization help Gen XYZ value the most important work rather than the easiest. |
| Loss elimination culture | Manufacturing plants focused on Loss Elimination (TPM-based) have higher employee ownership and involvement. |
| Gen XYZ benefits | All benchmark companies are evolving their benefits to meet Gen XYZ needs (e.g., more vacation, plus-one benefit designations, more medical and retirement options). The question then becomes: “Is this a cost of doing business, or is it improving results?” |
| Increased communication | Gen XYZ employees want more data and information, requiring plants to significantly increase the number, quality, and format of leadership communications. |
The challenges to global supply chains during the first quarter of the 21st century have leaders refocusing their efforts on building effective workforces. Our white paper makes a case for why talent management should be the highest priority of leadership—above strategy, cost compression targets, and everything else.
To learn more about how your company can partner with GSCI to explore advanced concepts in supply chain management, visit ASCC.
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