The Labor Pool Becomes a Supply Chain

Article excerpt

EXECUTIVE SUMMARY

When you have thousands of employees and they're strewn around the globe, how do you bring together the right staff resources for any given project? By creating a common language to describe employee skills and roles, IBM is able to deliver improved response time for staffing new projects as well as job vacancies.

Calculating return on investment has been a valuable measurement tool for a long time. During the 1920s, ROI was the emerging tool to place a value on the payoff of capital investments. In recent years, the application of the concept has been expanded to all types of investments. This reflects the growing demand for evidence of positive returns on investing in programs. Today, clients - those funding the initiative - require critical evaluation data, and measuring ROI can be a valuable tool for communicating the positive impact on the organization. Throughout this article, the term "program" is used to note any implementation of technology, quality, processes, policies, procedures, transition programs, change management programs, marketing, and any activity whether it is a new project, initiative, solution, or event.

Businesses of all kinds are striving to adjust their work force proactively to fluctuating market needs, threats, and opportunities. IBM, one of the largest and most diverse organizations in the world with more than 329,000 employees in 75 countries, is not just adjusting: It is reinventing work force management, honing its on-demand agility through an entirely new and innovative approach.

In partnership with its Global Services business leaders, IBM has leveraged the experience gained from optimizing supply chains in its hardware businesses (mainframes, servers, and PCs) and further incorporated leading-edge capabilities from its research division to create a new model for service delivery. This model is not only applicable to IBM's services business but is also transforming the work force management processes in other divisions. To date, IBM has achieved well over $500 million in business benefits and utilization improvements through work force management, and hundreds of millions of more dollars in additional savings are forecast for the coming years. These dollar savings, of course, do not count significant improvements in employee morale and customer satisfaction.

While it is always important to remember that people are not parts, IBM's experience is that supply chain business processes (including strategy, forecasting, demand planning, optimization, inventory, and fulfillment) can improve the discipline of work force management. The added benefit is that people, unlike parts, can be retained and retrained to serve new roles.

The model can be understood by an analogy of a grocery store chain. In a grocery store chain, customers visit one store of the chain, the store is stocked with a variety of goods, the customer seeks and selects the desired items, the customer then closes the purchase with the clerk. The grocery store chain is successful if its stores are able to provide the right goods at the right time, place, and cost.

In IBM's work force supply chain, the resource requester is the customer at the grocery store. The resource requestor could be a manager staffing an internal team or a project manager staffing a project - really anyone who is seeking resources. The primary customer of the labor supply chain then is the resource requester. This is who will use the supply chain, benefit from the supply chain, must be satisfied by the supply chain, and ultimately sponsors (or funds) the supply chain. secondary customers are the providers of the resources as well as beneficiaries of the work that the resources perform (for example, applicants, suppliers, customers of a services business, a project's clients, or a department's clients). Like the grocery store, the key to success of the resource requester is the ability to provide the right person with the right skills at the right time, place, and cost. …