Temporary Management and Outsourcing: Addressing the Great Resignation

The pandemic and its effects have radically changed the rules of the game in the world of work, giving rise to the phenomenon of the so-called “Great Resignation”.

One of the most critical areas in this regard is Supply Chain Management.

Today, we present two effective tools to address the problem: Temporary Management and Outsourcing.

“Great Resignation”: What It Is and the Responses in Supply Chain Management

The term was coined to represent the exceptional wave of voluntary resignations witnessed over the past two years, which shows no signs of abating.

Some figures that frame the phenomenon:

• McKinsey estimates that 40% of workers globally intend to change jobs in the next 4-6 months;
• Also according to McKinsey, 64% of employers expect the problem to continue or worsen in the next six months;
• Looking at Italy, according to AIDP (the Italian Association for Personnel Management) data, voluntary resignations among young people affect 60% of companies in our country.

This is the most evident symptom of a structural change in the relationship between employee and company, which is transversal across various sectors and is generally affecting the main global economies.

The effects of this phenomenon in companies manifest as a more or less sudden lack of personnel. When resignations occur in the same area (and perhaps in rapid succession), there is a high risk of activity paralysis.

Returning to the field of Supply Chain Management: the current historical moment is particularly complex due to a confluence of crises on various fronts, such as component shortages, difficulties in sea transport, and price tensions for various commodities (also due to the Russian-Ukrainian conflict).

If a context this critical is compounded by a lack of personnel to manage supply chain-related processes, then the conditions are created to undermine business continuity.

How to respond to the effects of the Great Resignation in such a delicate area? Temporary Management and Outsourcing can represent two effective solutions for managing the problem, respectively in the short and medium/long term.

Temporary Management: Professional Support in Case of Emergency

While staff departures normally create organizational “gaps” that can last several months, in Supply Chain Management, the problem unfortunately amplifies.

These are, in fact, business functions with complex and interconnected processes: governing them requires high professionalism and experience, factors that make the period between a person’s departure and the arrival of a new resource particularly long.

Temporary Management precisely addresses this need: to promptly provide professionals for the role, with the necessary experience for what will be a temporary assignment. The roles covered range from more operational ones (planner, expediter, buyer, to name a few) to those of responsibility and management, up to executive positions. These are the so-called “Temporary Managers”.

What makes Temporary Management so functional as an emergency tool? Here are some aspects:

• Timeliness. One of the most tangible advantages is the speed with which the professional is available. The resource can join the company within a few days and is immediately operational;
• Professionalism. The Temporary Manager is a professional in their role because they know the processes and tools and have the necessary experience to quickly integrate into the company’s reality and start performing;
• Flexibility. The availability of the resource is flexible. They can be involved with a full or partial commitment, depending on the company’s needs;
• Temporality. Last but not least is the time factor. Temporary Management is by its nature a temporary support, with the possibility of flexibly managing its conclusion, for example, to ensure an optimal handover. This aspect makes Temporary Management interesting for roles related to projects, such as that of a project buyer.

Outsourcing: Delegating Non-Core Activities to Specialists

Once the short-term contingency is resolved, it may be worthwhile to carefully evaluate one’s scope of activities to understand if everything being managed is actually core to the area. Often, in fact, there are processes or “slices” of activities that have the unpleasant characteristic of being less central to the area’s scope but absorb a significant amount of resources.

It is in these “non-core” areas that outsourcing can intervene effectively: if managing certain processes or segments that are not central to the company personally leads to a high utilization of one’s resources, why not entrust them to professionals who make it their core business?

Naturally, the choice of areas to outsource is crucial to fully benefit from the advantages of outsourcing: it is necessary to identify areas where the company is inefficient and is forced to neglect due to a lack of dedicated resources (or which require vertical skills and tools not present).

Some examples of Outsourcing in the Supply Chain:

• Transport management (purchasing and organization);
• Cost Engineering;
• Purchasing and warehouse management of Class C items (e.g., auxiliary materials, indirect materials, etc.);
• Purchase code planning.

Well-designed outsourcing brings several advantages to the company that implements it. Let’s discover them:

• Resource Recovery on Core Activities. The first tangible result is the ability to concentrate resources on everything that is core to the company, where they can provide more added value;
• Non-Core Activities Managed as Core. In parallel, even what is not core to the company is managed precisely and punctually. In fact, it is the outsourcer’s core business, and they have every interest in bringing efficiency to that scope;
• Cost Variabilization. Last but not least is the benefit of variabilizing costs related to the outsourced scope, thus following the actual volume of work.

The response to the current period of great uncertainty, especially in the field of Supply Chain, involves knowing effective and reliable tools to activate in response to the criticalities that arise from time to time.

Temporary Management and Outsourcing represent, in this perspective, two precious levers available to managers to overcome contingent difficulties and regain time and resources to dedicate to the key activities of their area.

Makeitalia: Your Partner for Addressing the “Great Resignation”

At Makeitalia, since 2008, we have been involved in Supply Chain Management, supporting our clients in the management and optimization of the supply chain in various aspects, such as purchasing, logistics, planning, and quality.

Among our services, we also support companies through Temporary Management and Outsourcing. Our constant objective is to improve our clients’ performance, supporting them in managing the various aspects of the Supply Chain.

If you need further information for any business needs, please contact us without obligation through the dedicated page on our website, available at the following link Contacts.

We will be happy to listen to your needs, chat with you, and present our solutions.