DISRUPTIVE DEMOGRAPHICS IN SUPPLY CHAIN MANAGEMENT

Transcription

1 DISRUPTIVE DEMOGRAPHICS IN SUPPLY CHAIN MANAGEMENT and How We Have Been Quietly (Perhaps Unknowingly) Preparing to Avoid the Impending Crisis Kevin F. Smith Senior Vice President, Supply Chain & Logistics CVS / pharmacy October 23, 2007

2 Agenda Recent insights to the CVS DC network Some scary projections on the workforce How we are planning for the future Why it is all going to be all right For some of us!

3 DC Workforce Demographics Over 1000 new CVS DC associates last year The average age of new hires was 31 Over 100 new hires (10%) were over 50 We found this to be surprising

4 DC Workforce Demographics Looked more closely at our 8000 associates 25% of the current workforce is over 50 52% female, 48% male Average overall age = 41.8 years

5 DC Workforce Demographics Extrapolate out 10 years and project that with turnover and demographic trends, by % of our workforce will be over 50 Female to male ratio remains the same Average age grows by 2.1 years to 43.9

6 DC Age Demographics (2007) Average Age = 41.8 years 2,500 # of Associates 2,000 1,500 1, and under Age # of Associates (2007)

7 DC Age Demographics (2017) Average Age = 43.9 years 2,500 2,000 # of Associates 1,500 1, and under Age # of Associates (2017)

8 DC Age Demographics (2007) Average Age = 41.8 years 2,500 # of Associates 2,000 1,500 1, and under Age # of Associates (2007)

9 DC Age Demographics (2017) Average Age = 43.9 years 2,500 2,000 # of Associates 1,500 1, and under Age # of Associates (2017)

10 The workforce is getting older! This raises a couple of questions.. How the heck did this happen? Why didn t anyone tell us about it? Answer It snuck up on us! Evolutionary change is not always apparent We have been quietly, tacitly adapting to a steadily aging workforce

11 The Aging of America Super Longevity Revolution Technology innovations extending life Evolution of Pharmacy, OTC, Alternative Medicines & Retail Health Services Over 60 population is growing 62% growth by 2020 More dramatic growth 2020 to 2050 By M over 85 years old (up from 5M) 1M over 100 years old (up from 80k!)

12 The Aging of America Marketers have seen the shift 2/3 of the wealth in the US controlled by 50+ Estimated that 80% of consumer growth is 50+ Product offerings reflect the change Nutaceuticals, supplements and vitamins Skin care products Anti aging agents Adult incontinent products But, managers have ignored it

13 The workforce is getting older! More precisely, they didn t see it! A few years ago my father said to me, I was shaving this morning and when I looked in the mirror, I saw and old man. Well, we were starting up our first shift yesterday and..

14 Life Expectancy at Birth Source : U.S. Census Bureau, 2000

15 Life Expectancy at Birth Battle of Hastings % of the current workforce would be dead! Source : U.S. Census Bureau, 2000

16 Life Expectancy at Birth Turn of the Last Century % of the workforce wouldn t have made it! Source : U.S. Census Bureau, 2000

17 The workforce is getting older! 1/3 of all Americans alive today were born between 1946 and 1964 Birth rates have fallen sharply 1950 s = 3.7 children 2000 s = 2.0 children 20% of boomers have no children 25% have only 1 child * Source: Workforce Crisis, Dychtwald, Erikson & Morison

18 The workforce is getting older! 100 years ago 4% of population 65+ Now 14% >65, and growing fast 13% of >65 choose to continue to work 60% of 55 to 64 choose to work 2/3 of women work outside the home * Source: Workforce Crisis, Dychtwald, Erikson & Morison

19 The workforce is getting older! Why stay in or re-enter the workforce? Combination of culture and longevity People are afraid of outliving their money Many work for the health benefits Modern Consumerism College tuitions Housing costs (and choices) Leisure activities

20 The workforce is getting older! Some preliminary conclusions Recognizing the issue gets you halfway to the solution Whining about the inevitable is not proactive Chasing the elusive 20 year old is not productive there are not enough of them

21 Looking toward the future What are we really dealing with? Multi-generational workforce Deal with different segments Deal with different needs Multi-cultural / Multi-lingual workers Mature workers fastest growing segment Attract and retain Meet their needs Adjust the physical workplace Capitalize on knowledge and experience

22 Looking toward the future What workers want* Young Instant rewards Time off Mid-Career Healthcare Financial Management Wealth accumulation Mature Affordable, age relevant healthcare Insurance benefits Time to pursue personal interests * Source: Workforce Crisis, Dychtwald, Erikson & Morison

23 Looking toward the future And, we have been moving in this direction Healthcare Reimbursement Accounts Long Term Care Insurance Supplemental Life Insurance Flexible work schedules

24 Looking toward the future Mature workers tell us they want to Be Productive Be Valued members of the team Have Meaningful work Share their Knowledge Provide Leadership

25 Looking toward the future Our experience throughout CVS / pharmacy demonstrates that mature workers Stay with us 3 times longer Appear to care more about our customers Set good examples for younger associates Are anxious to share their Knowledge Experience Expertise Among our most dependable associates

26 Looking toward the future This testimony dispels several myths* Older workers are not less productive They do not sustain more injuries They do not incur more sick days than their younger colleagues * Source: Workforce Crisis, Dychtwald, Erikson & Morison

27 Looking toward the future What are we doing differently? Automation Pick to Light Voice Directed Picking Ergonomic Equipment Process change Flexibility

28 Looking toward the future Goods-to-Person Automation

29 Looking toward the future Automated Induction

30 Looking toward the future Pick to Light Technology

31 Looking toward the future Voice Directed Picking

32 Looking toward the future Ergonomically Designed Picking Equipment

33 Looking toward the future Process Changes like Easy to Move Carts and Dollies

34 Looking toward the future Flexibility

35 Looking toward the future Where will the new workers come from? Tapping in to new ways to attract workers SER National Mature Hispanic Women entering or returning to work United Way Skill-Up RI Multicultural, Multilingual, Job Changers

36 Disruptive Demographics - Conclusion Would you rather be lucky, or good? Made a lot of progress Benefits changes that complement needs Equipment and Process changes Flexibility to preserve Productivity and Performance New sources for workers

37 Disruptive Demographics - Conclusion When you are dying of thirst, it is too late to think about digging a well. Japanese Proverb

38 Disruptive Demographics Thanks for your time and attention!