For links and show notes, mouse over the player and click the 
.
Transcript
Caroline Chumakov is a director analyst in the Talent and Sustainability team at Gartner. She covers supply chain talent strategies, change management, communications, culture and centers of excellence. Chumakov assists attracting and retaining top talent and speaks to what talent strategies and specialty organizational structures may address the gaps in supply chain capabilities. Chumakov also advises clients on how to improve the diversity of their supply chain workforce and create inclusive work environments for all. She specializes in guiding clients through the development and deployment of supply chain centers of excellence. She discusses best practices for leading changes whether focused on broad transformation or small-scale initiatives and advises on relationship-management communication strategies.
David Maloney, Editorial Director, DC Velocity 00:01
Women are impacting supply chains. The fate of Yellow Freight. And it's been a bumpy summer for logistics.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.
Hi, I'm David Maloney. I'm the group editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by PERC, the Propane Education and Research Council. Propane is the safe, reliable energy for material handling. Propane-powered forklifts can improve air quality inside your facilities for a healthier, more productive workforce. See how propane can give your productivity a boost at propane.com/forklifts.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insights into the top stories of this week. But to begin today, women continue to make inroads and impacts within supply chains as women are filling more executive and leadership positions in the industry. To find out more. Here is Victoria with today's guest.
Victoria.
Victoria Kickham, Senior Editor, DC Velocity 01:13
Thanks, Dave. Today's guests is Caroline Chumakov, director analyst on the talent and sustainability team at Gartner Inc. She's here to talk with us about Gartner's recent Women in Supply Chain survey, which was released earlier this summer. Welcome, Caroline.
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 01:31
Thanks so much for having me, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 01:33
It's a pleasure. Can you give us a brief summary of the women in supply chain survey? What's the purpose, frequency, and target audience?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 01:41
Absolutely. So, a little over eight years ago, Gartner decided to build a partnership with a group called AWESOME. They're a nonprofit that focuses on advancing women's supply chain leadership, and we felt like there was a real white space in this research area of gender representation in supply chain, so we ended up developing the annual survey that we've been running ever since. And the survey is really meant to capture representation of women at all levels of the average supply chain organization, all the way from manager and supervisor all the way up to the C suite. And it's also a really great way for us to track supply chain goals and initiatives in the space of gender diversity, and even what might actually be working. So, really any leader in supply chain that is looking to benchmark themselves, or even to find some methods that lead to better representation among their ranks could could benefit from our survey findings.
Victoria Kickham, Senior Editor, DC Velocity 02:44
What were some of the headlines from this year's survey?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 02:48
Yeah, well, the first and, I think, maybe the most exciting was that representation of women across all levels is at its highest point in the history of our survey. So, women actually make up 41% of the total supply chain workforce today, versus 39% last year. And we saw improvement at virtually every leadership level as well. The other thing that we tracked this year was attrition of women in supply chain, because we're seeing such a high turnover experience and environment within supply chain. So, one of the headlines was that, although women aren't necessarily leaving in greater numbers than men, they are leaving, and there seems to be a pretty clear reason why they're leaving. So, an overwhelming number of women are leaving for greater compensation, and a pretty close second was lack of career opportunities. So, women are saying, If I don't know what my next move is, or if I don't feel properly compensated, then I'm gonna see what else is out there. Now, the other big finding that we had was that organizations that are seeing progress are investing in initiatives in the space of recruiting, so they're removing gendered language from job descriptions, or maybe they're making sure their panel interviews include a woman. They're also investing in learning and development for women, so they're thinking about targeted development programs for women, even reverse mentorship programs, for example. And they tend to be focused on inclusive leadership development. So, this is a little different than unconscious bias training, where essentially we're trying to embed inclusion into leadership best practices, and to make it a day-to-day exercise rather than a check-the-box exercise.
Victoria Kickham, Senior Editor, DC Velocity 04:43
What are reverse mentorship opportunities? I'm not familiar with that.
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 04:48
Yeah, so reverse mentoring is really flipping mentorship on its head, where we might take a less tenured, less experienced individual within In the organization — usually a high-potential employee, in this case, women — and we pair them up with a senior leader, usually an executive leader, and those less-tenured individuals actually have the opportunity to mentor up to an executive. So, really, the executives are learning from some of their more junior employees, and are understanding the experience of women within the organization and are receiving advice on what it is that we could change within supply chain.
Victoria Kickham, Senior Editor, DC Velocity 05:31
Interesting. I did read a little bit of the report, and it seems that, you know, given all of this, women seem to have made the most gains in the C suite and executive level. Can you tell us a bit about that?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 05:42
Yeah, absolutely. So, this was one of the data points or findings that surprised us the most in a good way. You know, we wanted to shout it from the rooftops. But women make up 26% of executive-level positions like the chief supply chain officer, or the chief procurement officer, even senior vice president or executive vice president levels, and this was a significant jump. It was a 7% jump from just 19% last year, which is remarkable. And there are a few reasons why we might be seeing a jump like this, you know. Particularly in the U.S., but of course, even globally, we saw a spike in early retirements and retirements at large, and quite a few of these people are clustered at the top of the organization. So there was this kind of mass exodus of senior leaders, which opened up a lot of space for women to fill the void. And one other reason we think that we've we've seen this jump at the executive leadership level is because 71% of supply chain organizations now have some kind of general objective for gender diversity, and even some have formal targets that are actually embedded on management scorecards. So, with all this movement that we saw through the pandemic, there were more organizations who were accountable to improving gender diversity in all of those open positions that they had.
Victoria Kickham, Senior Editor, DC Velocity 07:13
Progress is less apparent, though, I think, on the frontline roles, correct? I wanted you to sort of talk about that, and what kinds of jobs we're talking about here, and what were the findings on that issue?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 07:25
Yeah, maybe we start with that definition, so, when we talk about frontline roles, what does that actually mean? So at Gartner, we actually define frontline roles as really any worker who is required to be on a company site or in some kind of physical work environment, and that could include vehicles, at least 90% of the time. So, these are your operators, these are your pickers and packers in your DCs, these are your truckers and even in some cases, it's customer service representatives that are on site. And in our survey, what we found — well, this is actually the first time that we were able to track frontline representation, which was an exciting finding this year — but the results were a bit sobering. So, women only make up 31% of all frontline positions compared to the 41% when we look across the supply chain organization, and that number drops all the way down to 24% when we look at that first level of leadership, at the manager or supervisor level. Now, I think there are a few reasons why we maybe aren't seeing as great representation on the frontline for women, because there is a bit of a mismatch in terms of what companies are investing in, in gender diversity initiatives for their frontline and what seems to actually be working and what's actually attracting and retaining women for these roles. So, we actually found that 57% of organizations are investing in things like employee engagement, so they're building employee resource groups, or they're putting in gender diversity or DE&I [diversity, equity, and inclusion] newsletters, for example, but only 6% of those same companies said that it was the most effective initiative. Now, what we did find was that work flexibility came in as the clear winner. It was seen as the most effective initiative for attracting and retaining women on the front line. So, this is the kind of flexibility in terms of shift lengths or times, flexibility in what activities can be done at at home rather than maybe on site like team meetings or trainings, or even flexibility in who employees get to work with or what things they actually get to work on. And this finding makes sense when we think about some of the challenges that women face in shouldering some of the home responsibilities and trying to manage that and working on site for a very long shifts or periods of time.
Victoria Kickham, Senior Editor, DC Velocity 10:03
Absolutely, yeah, the flexibility issue, that makes a lot of sense. You mentioned earlier that sort of the executive C-suite findings surprised you a bit. Was there anything else about this year's results that that surprised you and your team?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 10:19
Yeah, there was one finding that really stood out and was a bit unexpected. So, we found that when there's a woman in the most senior role in supply chain, there's also more likely to be a higher percentage of women in the total workforce and at all management levels, at all leadership levels. So, this kind of finding gets us thinking about the importance of visibility, so if we have women in our senior positions, can others see them? Are they visible? Are they celebrated in a way that might influence younger generations and even less-tenured women employees to reach higher in their career goals? So, this was a resounding finding that we need to maybe better represent and make visible the senior leaders in our organization, the senior women leaders in our organization.
Victoria Kickham, Senior Editor, DC Velocity 11:14
Yeah, absolutely. It seems common understanding today that, you know, gender diversity, as we've been talking about, in the workplace is a worthwhile goal. I think most people would agree with that. Can you kind of wrap up here by telling us how this benefits a company, both in terms of the work environment and the bottom line, if you can?
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 11:33
Absolutely. There's really decades of research that show the benefits of gender diversity, and even DE&I as a whole, but I'll maybe share some of the highlights. So, companies with above-average diversity have 19 percentage points higher innovation revenue and nine percentage points, higher EBIT [earnings before interest and taxes] margins. And diverse organizations also see a 12% increase in employee discretionary effort over nondiverse organizations. We also, in some of our own prior supply chain-specific research, have found that millennials and Gen Z, this group of talent, they place greater importance on gender and racial and ethnic diversity in their organizations, so it's an attraction driver. So, obviously, beyond being the right thing to do, companies that invest in gender diversity are reaping benefits like innovation, profitability, employee engagement, and even employee attraction and retention.
Victoria Kickham, Senior Editor, DC Velocity 12:34
Caroline, thanks so much for joining us today. We really appreciate your time and your insight.
Caroline Chumakov, Director Analyst, Talent and Sustainability Team, Gartner Inc. 12:39
Absolutely. Thanks so much for having me.
Victoria Kickham, Senior Editor, DC Velocity 12:42
It's a pleasure. We've been talking to Caroline Chumakov of Gardner. Back to you, Dave.
David Maloney, Editorial Director, DC Velocity 12:48
Thank you, Caroline, and Victoria. Now let's take a look at some of the other supply chain news from the week. Ben, a lot of the news and supply chain this week dealt with the demise of the large logistics firm Yellow. What's the latest on this breakup?
Ben Ames, Senior News Editor, DC Velocity 13:03
Yeah, that's for sure. Yellow Corp was the nation's third-largest less-than-truckload — LTL — freight company. They had about 30,000 employees and some 60,000 tractors and trailers, but they also had an enormous amount of debt that was headlined by about a $700 million loan from the federal government. And that had kept it afloat during the pandemic, although our government and all of us now own a third of what's left of that company. Their main financial problems seemed to be that they had acquired several other freight fleets in recent years, but they hadn't yet been able to integrate them all together and make the whole thing profitable. Yellow's trucking brands include — or included — Holland, New Penn, Reddaway, and YRC Freight. In early July, this all came to a head, because Yellow missed a contractually obligated payment of some $50 million to a workers' healthcare fund. Obviously, that got their union drivers worried enough that the Teamsters had threatened to strike, and this past Sunday they shut down operations entirely. But they haven't yet legally declared bankruptcy quite yet, because it turns out that it's pretty complicated to unwind all those parts.
David Maloney, Editorial Director, DC Velocity 14:23
Ben, do they know how long that process will take?
Ben Ames, Senior News Editor, DC Velocity 14:27
We don't know exactly, no. Various analysts, including the financial analysts, the stock firms, had thought it could be as early as this past Monday, for the bankruptcy part. That hasn't happened yet, but of course, a lot of what's going on in the meantime is taking place behind closed doors. Presumably the company is negotiating the sale of some of its assets, such as those trucks and tractors and trailers, the real estate, but here's what we have seen: The company was widely reported to have stopped accepting new freight last Wednesday. So, then it operated for several days just running through all the existing loads in its network. That ensured that anybody who had already paid Yellow to deliver inventory would actually see it reach its destination, instead of just having a truck stop on the side of the road somewhere. Also last week, we learned that Yellow was trying to sell off its third-party logistics arm — they did brokerage — that was to try to raise the cash that they desperately needed. It was kind of an eleventh-hour attempt. Evidently it didn't work. On Friday, they were said to have done deep layoffs of all their nonunion employees. And then on Sunday, they shut the doors to all employees entirely. So, since then, you know, we've seen some other groups actually step in to start the process of trying to find new jobs for some of those 30,000 workers. The ones who lost their jobs include a big range. There are drivers, of course, but it's also dockworkers, mechanics, sales people, administrative support personnel, lots of others. It takes a lot of different skill sets to run a large logistics company. So first, the Teamsters union said that it would help its union members to find good union jobs throughout the freight and other industries, in their words. And then a couple days later, the American Trucking Associations, the ATA — that's the main trade group for freight fleet operators — ATA launched an online jobs database to match those same workers with prospective employers. The timing is going to be tough for both efforts, because as we all know, the nation overall is trying to cool off economic growth, to keep slowing down inflation, and particularly the trucking sector is near the bottom of a cyclical freight recession. So, both of those things are going to turn around at some point, but in the meantime, they could also be affecting the overall effort by Yellow to sell its parts, and, you know, hopefully, those employees can find work again soon.
David Maloney, Editorial Director, DC Velocity 17:07
Right. Of course, it has been a very difficult year this year for the transportation industry, and we hope that those issues that brought down Yellow will not be the start of a trend that will affect other carriers. Thanks, Ben.
Ben Ames, Senior News Editor, DC Velocity 17:20
Glad to.
David Maloney, Editorial Director, DC Velocity 17:21
And, Victoria, continuing the discussion on the rough road that transportation companies are experiencing this year, the latest numbers from the Logistics Managers' Index have come out. What are they telling us about the health of the logistics industry?
Victoria Kickham, Senior Editor, DC Velocity 17:34
Well, Dave, we continue to see slowing conditions across the industry in July, and that's part of a trend that began earlier this year. As you said, this week, researchers released the monthly Logistics Managers' Index report for the month, for July, and it showed that economic conditions in the industry contracted for the third straight month. And essentially, that means the industry overall saw lower demand for services as opposed to seeing growth in demand. The report, just to give it in a nutshell, is based on a monthly survey of logistics managers from across the country, and it results in a monthly score or reading the gauges activity in logistics. It does this by measuring mostly transportation and warehousing activity. A reading above 50 indicates expansion and a reading below 50 indicates contraction in the market, so just a little bit of history on all this. Industry growth began to slow in 2022 following record-high demand for logistic services during the pandemic. But 2023 marks the first time the LMI has hit negative territory. The index started the year at 57.6 in January, indicating moderate growth levels, but has declined every month since, dipping below 50 In May and reaching an all-time low of 45.4 in July. The researchers said the freight recession continues to be the biggest drag on overall demand, with warehousing keeping things going, but they also said that there are signs that the situation may be on the verge of change. Warehousing metrics actually began to soften a bit during the month, and the researchers are predicting that we may be near the bottom of the transportation market slowdown as well.
David Maloney, Editorial Director, DC Velocity 19:09
Well, that'd be helpful. Did the researchers elaborate on any of those changes or shifts?
Victoria Kickham, Senior Editor, DC Velocity 19:15
Yes, I spoke to Zac Rogers of Colorado State University. He's one of the LMI researchers, and he pointed to a couple of things. First of all, inventory levels saw their steepest rate of contraction during July, and that really bucks the typical summer trend of increasing inventory levels in preparation for peak season. Rogers says this is likely due to a couple of factors. The first is that, given the framework and conditions we've been talking about, many companies — and I'm quoting — "may believe there's a lot of flexibility in freight markets right now and that rush orders will be possible," so they're not too worried about getting products stocked when needed. Second, Rogers pointed to the glut of inventory the market experienced last year, which he said may be causing hesitancy on the part of some companies to ramp back up, and that's a situation that may be particularly true for those who are still locked into high storage costs. It can still be pretty expensive to, to hold some warehouse space out there. On the transportation side, capacity still expanded in July, which means there's still a lot of trucks available out there, but at a slower rate compared to June. And this was especially pronounced toward the end of the month with the news of Yellow's shutdown, which Ben just talked about. The LMI researchers have speculated in past reports that the freight recession will eventually end when capacity exits the market, and of course when demand picks up. But as we all know, there was excess capacity during the height of the pandemic to accommodate burgeoning demand, but the researchers, and many others, said that those conditions were unsustainable. Yellow's closing has helped reduce capacity, of course, and many shippers have already had to turn to alternative carriers. The researchers said that the shutdown may be the beginning of that sort of regression to the norm, although Rogers was careful to point out that the LMI researchers are not speculating at all that shutdowns are imminent for any other specific carriers. So, the bottom line seems to be that we may be getting back to more typical or normal growth patterns soon — that is, you know, if the July trends hold.
David Maloney, Editorial Director, DC Velocity 21:14
All right. Well, it would certainly be nice to get back to normal after the roller coaster [over] the past couple of years that we've seen. Thanks, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 21:22
You're welcome.
David Maloney, Editorial Director, DC Velocity 21:24
We encourage listeners to go to DC Velocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics that we discussed today.
We again would like to thank Caroline Chumakov of Gartner for being our guest. We welcome your comments on this topic and our other stories. You can email us at podcast@dcvelocity.com.
We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. Our new episodes are uploaded on Fridays. Speaking of subscribing, check out our sister podcast series Supply Chain in the Fast Lane. It's coproduced by the Council of Supply Chain Management Professionals and Supply Chain Quarterly. The current series is on transportation tech. Check it out wherever you get your podcasts.
And a reminder that Logistics Matters is sponsored by PERC, the Propane Education and Research Council. Propane is the safe, reliable energy for material handling. Propane-powered forklifts can improve air quality inside your facilities for a healthier, more productive workforce. See how propane can give your productivity a boost at propane.com/forklifts.
We'll be back again next week with another edition of Logistics Matters. Be sure to join us. Until then, have a great week.
Articles and resources mentioned in this episode:
- Gartner
- ATA launches database for 30,000 workers who lost their jobs in Yellow Corp. collapse
- Yellow Corp. shuts its doors on Sunday, could file for bankruptcy today
- Yellow tries to raise cash by selling off its 3PL division
- Logistics economy slowed in July
- Visit Supply Chain Quarterly
- Listen to CSCMP and Supply Chain Quarterly's Supply Chain in the Fast Lane podcast
- Listen to Supply Chain Quarterly's Top 10 Supply Chain Threats podcast
Go to main Logistics Matters archives page | 2022 archives | 2021 archives | 2020 archives
