Human resources and the logistics hub
The plans for a global logistics hub, is a cause worthy of as many planning conversations as possible. About 20 years ago, I came face to face with the impact of the mobility of capital when a United States multinational in Jamaica abandoned its manufacturing operation after extensive investments in a production facility at Naggo head. Someone I was close to, who was the head of the accounting function, moved on from that company and migrated to another regional location. I have since come to understand how technology and human capability can influence capital mobility even more.
Globalisation of logistics and supply-chain services, the rate of technological innovation and fluctuation in consumer demand are among the factors that have increased the demand for hub locations and country positioning. More prominent, however, is the distinct shortage worldwide of logistics and supply-chain expertise, including information system support capabilities which have become hurdles to logistics and supply-chain development.
I understand logistics management as a process of strategically managing the acquisition, storage and movement of materials, parts and finished inventory. It involves logistics activities in transportation, inventory management, order processing, information management, financial management and specialised accounting, warehouse management, material handling purchasing, packaging, other supporting activities, including demand management.
What is human resources management?
Human resource management is a distinctive approach to employment management which seeks to achieve competitive advantage through strategic deployment of a highly committed and capable workforce. This we do, using an integrated array of cultural, structural and personnel techniques.
The resource-based view of the firm: This theory maintains that in order to develop a sustainable competitive advantage, organisations must build human capacity by creating resources in a manner that is rare, non-imitable, and non-substitutable.
This challenge of capacity building is a key challenge to Jamaica in the competitive space for locating a logistics hub.
It was the challenge for Thailand who, in their quest to become a regional logistics hub, identified three tiers of preparedness amongst their neighbours and themselves, in which tiers one to three described high to low levels of availability of skilled labour. Thailand located themselves in the category of low availability.
Thailand identified the following instructive human-resource issues:
Lack of logistics personnel
Lack of logistics management vision
Lack of logistics degree and trainer
Lack of occupational standard
Their solutions, relevant for us were as follows:
Develop needed courses
Launch logistics scholarships
Create occupational standards
Accumulate logistics standards and knowledge base
Some time back, the Asia Pacific Logistics Institute in Singapore, in association with the logistics Institute of the Georgia Institute of Technology in the USA, indi-cated that in both global and domestic logistics organisations, there was an identified lack of talent as one of the key challenges of operating logistics services.
QUANTITY AND QUALITY
Human resource capacity building has to include a focus on both quantity and quality. New and additional public-sector human capacity needs will have to be understood so that we equip approval and regulatory departments with the necessary skills. Of relevance is the observed consensus across many countries on the issue of public-sector innovation; innovation is seen, for example, in the European public-sector space as a means to address growing budgetary pressures, as well as more complex demands on the public sector.
Surely the demands of the global logistics hub for licensing, permits, facilitation, tax arrangements, more efficient adminis-tration of public-sector service delivery, etc, will call for differentiated and more effective service design. Public-sector human capacity development and innovation space are imperatives moving forward for Jamaica. It is hardly possible for this to happen without a commitment to making public-sector employee performance management more geared towards building a learning organisation in public-sector entities.
Paradoxically, economic challenges in many countries, including Jamaica, account for innovation roadblocks in the public sector. The problem is, therefore, missing its own solution in some places. Historically, the Jamaican public sector has developed differently from the private sector, having perhaps been less permitted than the private sector to engage in innovation, where efficiency and innovation have always been critical to sustained success.
The results of the European 2020 union innovation initiative also show that the introduction of new and improved public services have a significant impact on business performance. Foe example, by investing in advanced ICT infrastructure, governments have managed to considerably increase the online availability of public services for businesses.
We need to properly understand what are the peripheral services that the private sector will have opportunity to provide with the establishment of a logistics hub. This will help better inform the national preparedness for skills required to work in the local public sector, private sector, and in foreign-owned businesses.
We also need to understand what new labour, occupational health and safety standards are necessary, and what needs to happen to develop knowledge of, and expertise in, these things.
We cannot just depend on foreign labour. Closeness to a market with skills is for sure not a source of competitive advantage with work permit, nationa-lism, pricing, and cultural issues to contend with.
So then, do we have enough upgraded and technology-enabled expertise in production, IT, warehousing, distribution, procurement, accounting and other support services?
In the logistics industry, ICT facilitates the integration of supply-chain activities, for many reasons, including just-in-time product delivery needs, and beyond this, to production line management at manufacturing source. Therefore, the need for ICT skills and knowledge to enhance logistic hub operations must surely be non-negotiable.
What concessions are we providing to private training institutions ( e.g. tax breaks, etc) to encourage programme design and delivery?
If our plans include the creation of value-added logistics parks, which enable the efficient processing of goods as an integral part of a multimodal logistics system, we need to understand what skills are needed to respond to staffing needs in this area. Are there movement systems for road, rail, intra-island air, that will create new technician and engineering demands so that we can augment our skills pipeline in these areas?
Michael McAnuff-Jones is the president of the Human Resource Management Association of Jamaica and senior vice-president of human resources at Scotiabank.