Navigating Generational Knowledge Loss: A Crisis and Opportunity for Consumer Product Supply Chain Leaders

Navigating Generational Knowledge Loss: A Crisis and Opportunity for Consumer Product Supply Chain Leaders

“Knowledge is the most important intangible asset of enterprises, and unlocking value from intangible assets is the key to achieving future productivity growth. The competition for talent in the supply chain is a contest for knowledge and learning, not labor.”

This bold statement made by Lindsay Azim, Director Analyst in Gartner’s Supply Chain Practice at Gartner’s 2024 Supply Chain Symposium brings up a fundamental question: Can you achieve supply chain excellence without a well-defined and accurate knowledge management strategy in place?

In this article, we’ll explore the importance of a knowledge management strategy for consumer product brands and their supply chains, how technology is impacting both knowledge transfer from retiring employees and talent attraction, and why market leaders are increasingly investing in cloud platforms to streamline these processes and reduce the risk of generational knowledge loss across their value chains. 

Navigating Knowledge Loss and Skill Gaps for Supply Chain Success

Let’s start with a key definition. Generational knowledge loss in the context of the consumer products industry refers to the decline of essential expertise due to retiring employees and their key suppliers. This challenge arises from the reliance on tacit knowledge, which includes unwritten skills and experience that are hard to transfer through conventional training methods.

Take the wool industry for example - for years this sector has been built on skilled, often low-wage workers who manually identify and correct defects. While extremely skilled, these jobs are low-paid, which has meant younger workers have shied away from this pivotal sector. Most loom mills are currently staffed by a generation nearing retirement. Their generational knowledge is hard to replicate from a training perspective but could be tracked via machine learning technology.

In addition to generational knowledge loss, in-house and supplier manufacturers face a simultaneous challenge in attracting younger talent to fill their open positions. In a recent survey by Protiviti, a global business consulting firm focusing on risk management, leaders highlighted succession challenges and talent retention as a key threat to meeting operational targets. Creative recruiting methods are crucial for talent acquisition, while innovative learning programs aid in retention.

It may seem obvious, but intentionally investing in recruiting and upskilling existing talent are both key for any manufacturer's long-term success. Kristy Waterman, Executive Vice President, General Counsel and Chief Human Resources Officer at TreeHouse Foods, perfectly made this point during Veeva’s 2023 Executive Summit: 

“Treehouse Foods runs 28 manufacturing facilities in North American producing 17 categories of private label snack and beverage products. What we've found out is that you've got to be a lot more creative in the way that you're approaching recruiting, learning and development. You really must look internally for some of the skills you need and build them out to keep people engaged and retain them.”

Leaving recruitment aside for a moment, let’s explore the impacts of experienced employees leaving an organization. For consumer products industry enterprises and their suppliers, this usually creates a knowledge gap. The employee’s expertise in production processes, quality control, and supplier relations is often implicit, posing challenges for knowledge transfer. This gap can result in inefficiencies, delays, safety issues, regulatory non-compliance, and compromised quality, impacting brand reputation and profitability. Here are the three main reasons this challenge urgently needs to be addressed:

1. Quantifiable risks and financial consequences: Studies show that consumer product companies and their suppliers lose a significant portion of institutional knowledge every few years due to retirements. This translates to millions in lost productivity, potential non-compliance fines, and reputational damage.
2. A growing skills gap and a tighter competitive landscape: The consumer products industry faces a significant skills gap, with new hires often lacking the specific knowledge and experience of retiring veterans. Companies that fail to address this gap will struggle to compete in the evolving market.
3. Impacts long-term supply chain resilience: Proactive investments in capturing knowledge, upskilling the workforce, and ensuring compliance are crucial for building a resilient and adaptable supply chain that can thrive in the face of dynamic market conditions.

Unleashing the Power of Tech in Knowledge Management

Knowledge management plays a critical role in driving a digitally transformed workplace. A number of recent reports and surveys have uncovered insights and strategies for fostering agility, upskilling employees, and creating a future-proof workforce. Let’s review a few standouts. 

Emphasizing the importance of knowledge management, Wired Consulting's report "The Future of Work is Flexible" for Unilever underscores the swift digital transformation pace. With technology skills becoming outdated in just 2.5 years, flexible career paths and ongoing learning are crucial. In line with this trend, a recent Kantar study, also conducted for Unilever and cited in the report, reveals that 94% of employees highly value access to comprehensive learning and development initiatives, which enhance loyalty and retention.

In a PwC report titled "Secure Your Future People Experience," the focus is on five key actions. Organizations are urged to prioritize fostering agility and adaptability among their workforce. Technology is highlighted as pivotal in transforming and reinforcing the link between employees' skills, knowledge, and training methods. With 73% of companies emphasizing the importance of identifying and developing skills influenced by technology, leveraging new tech tools is key to ingraining learning in company culture. Technology enables diverse learning approaches like micro-learning and peer-to-peer knowledge sharing.

A recent Riverbed study surveyed 1,800 IT leaders, highlighting a growing demand for advanced digital tools among today's workforce, especially millennials and Gen Z. These generations, constituting nearly half of the talent pool, value access to technologies like AI, cloud computing, and automation. This demand is not just about efficiency but also creating a modern, digitally-enabled workplace. Decision-makers recognize the importance of investing in digital experiences to attract and retain talent. Failing to meet these expectations could lead to higher turnover and decreased productivity. 

For consumer product industry leaders, nurturing a culture of continuous digital innovation is key to building a future-proof workforce and achieving their business goals, including:

1. Mitigating risk and establishing a resilient supply chain: As retiring veterans carry decades of expertise, ensuring quality, compliance, and operational efficiency becomes a challenge. Cloud platforms like Veeva’s aid in preserving and passing on this knowledge, upskilling your team, and fortifying a future-proof supply chain for a competitive advantage. This prevents significant financial losses linked to knowledge depletion.
2. Maintaining quality and compliance for operational excellence: Non-compliance fines may harm your brand and trust. Cloud platforms aid in retaining institutional knowledge, upholding quality standards, and enhancing operations with efficient knowledge transfer, training, and data-driven decisions for sustainable success.
3. Creating a culture of ongoing learning and adaptability to bridge the skills gap: Cloud-based knowledge management and training platforms enable continuous learning, knowledge sharing, and scalable training programs, empowering your workforce to adjust to market changes and strengthen your supply chain resilience for the future.

Bridging the Knowledge Gap: How Cloud Platforms Span the Consumer Product Value Chain

Conventional training methods frequently fall short in capturing and conveying vital knowledge, resulting in an underprepared workforce and a setback in achieving excellence along the supply chain, jeopardizing efficiency gains in key areas. Cloud-based platforms tackle this issue directly, empowering companies to bridge the knowledge gap effectively and efficiently.

Veeva Vault Training is a specialized Learning Management System (LMS) tailored for the consumer product industry and its value chain. It aims to preserve and transfer the wealth of knowledge held by seasoned employees while meeting the tech-savvy expectations of new generations joining the workforce. This system streamlines the allocation and delivery of various training formats, capturing both implicit and explicit knowledge. 

Noteworthy features such as comprehensive content management, automated task assignments, personalized learning routes, and analytical tools empower market leaders to combat knowledge loss across generations, maintain consistent qualifications, streamline onboarding, enhance training compliance, and cultivate a future-ready workforce. By facilitating the capture and utilization of institutional knowledge, ensuring compliance consistency, and providing scalable training solutions, Veeva equips consumer product leaders to secure their future and fortify resilient supply chains for the upcoming era.

The time to address generational knowledge loss is now. We encourage you to take a proactive approach by:

1. Internal Knowledge Gap Assessment: Evaluate the impact of knowledge loss in your specific area. Consider both present and future consequences on your strategic plans. Identify areas at risk and assess current knowledge transfer methods. How does technology contribute?
2. Leveraging Technology for Knowledge Transfer: Discover innovative solutions like Veeva Training. Veeva addresses generational knowledge loss in the consumer products industry, enabling efficient knowledge capture and transfer.

By taking a proactive approach, you can ensure your consumer product organization and your suppliers have future-proof workforces equipped with the expertise needed for long-term success. Contact us today to learn more about Veeva’s comprehensive training solutions and explore how we can help you bridge the knowledge gap.