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Diagnosing the Pain In Your Supply Chain
Podcast

Diagnosing the Pain In Your Supply Chain

Knut Alicke, Dan Swan and Roberta Fusaro
McKinsey, 2021
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Editorial Rating

9

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In The McKinsey Podcast, McKinsey & Company Operations Practice partners Knut Alicke and Dan Swan tell host Roberta Fusaro how the pandemic, labor shortages and the skills gap all exacerbated supply chain issues for US and European companies. This has elevated supply concerns to the CEO level. To address labor and skills shortages, Alicke and Swan advise, businesses must  preemptively redesign their supply scenarios and solutions. They should also work to understand what their employees want and help them learn new, crucial skills.

Summary

In addition to high costs, supply-chain executives report labor shortages and significant capability challenges.

In some areas, the cost of materials and transportation has increased by as much as 79%. These increases have occurred in parallel with problems with hiring qualified employees and a lack of available transport.

In the United States, the “job-openings rate” is 50% higher than it was prior to COVID-19. Along with millions of employees leaving the labor market since the pandemic’s start, the gap has widened between the skills employees have now and the new technical skills they need.

These trends are manifesting in Europe, as well, where a survey of supply-chain executives indicated they need more “digital talent” to deal with increased analytics requirements. Employers are working to retrain their...

About the Podcast

Knut Alicke and Dan Swan are partners in McKinsey & Company’s Supply Chain Management Practice and Operations Practice, respectively. Host Roberta Fusaro is McKinsey’s executive editor.

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