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Critical human resources management functions for efficient logistics and

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 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

Critical human resources management functions for

efficient logistics and supply chain management

Sophia Anastasiou
Lecturer, Department of Logistics, Technological Educational Institute of Chalkis, GR
Email: anastasiou@yahoo.com

Abstract

The purpose of this paper is to present the critical parameters for an effective Human
Resources Management policy and potential practical steps for improvements in
logistics and supply chain management (SCM). Effective Human resource
management (HRM) is a critical element of successful organizational operations.
Thriving companies exhibit innovation, efficiency, flexible structure and require new
skills in their organizations and in their human resources. An organization’s effective
HRM policy includes several functions which can influence the final outcome of
personnel effectiveness and organizational performance of companies. Effective
HRM policy is particularly important in logistics and supply chain industry. Effective
operation of logistics, for example, requires internal and external synchronization,
data sharing and communication within and between companies and departments.
An effective HRM policy should encourage innovation with recognition and reward of
managers, teams and individuals. Data collection is a critical element of HRM
functions and internal performance measures can be used in personnel rewarding
and recognising for achieving outcomes in accordance to strategic goals and
objectives. Several other HRM policy parameters also constitute a significant element
of the potential improvements of logistics and supply chain management.

Περίληψη

Σκοπός της εργασίας είναι να παρουσιάσει τις κρίσιμες παραμέτρους για μια
αποτελεσματική πολιτική της ∆ιαχείρισης Ανθρωπίνων Πόρων στη διαχείριση των
logistics και της εφοδιαστικής αλυσίδας. Καταξιωμένες επιχειρήσεις επενδύουν στην
καινοτομία, την αποτελεσματικότητα, την ευέλικτη οργανωσιακή δομή και απαιτούν
νέες δεξιότητες όσον αφορά το ανθρώπινο δυναμικό τους. Η πολιτική διαχείρισης
των ανθρώπινων πόρων περιλαμβάνει διάφορες λειτουργίες που μπορούν να
επηρεάσουν την αποτελεσματικότητα και αποδοτικότητα των επιχειρήσεων. Η
αποτελεσματική πολιτική διαχείρισης των ανθρώπινων πόρων είναι ιδιαίτερα
σημαντική στα logistics και στον κλάδο της εφοδιαστικής αλυσίδας. Η
αποτελεσματική λειτουργία της εφοδιαστικής, για παράδειγμα, απαιτεί εσωτερικό και
εξωτερικό συγχρονισμό, κοινή χρήση δεδομένων και επικοινωνίας εντός και μεταξύ
των επιχειρήσεων και των υπηρεσιών τους. Μια αποτελεσματική πολιτική διαχείρισης
των ανθρώπινων πόρων θα πρέπει να ενθαρρύνει την καινοτομία, την αναγνώριση
και επιβράβευση των στελεχών και γενικότερα όλου του ανθρώπινου δυναμικού ενός
οργανισμού. Η συλλογή δεδομένων είναι ένα κρίσιμο στοιχείο της ∆ιαχείρισης
Ανθρώπινου ∆υναμικού και μπορεί να χρησιμοποιηθεί για την αναγνώριση και
επιβράβευση του προσωπικού και την επίτευξη των στρατηγικών στόχων και
σκοπών ενός οργανισμού.

Keywords: Human resources management, business communication, logistics,

supply chain management.
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

1. Introduction

1.1. The role of Human Resources Management in the organization

The purpose of this paper is to draw attention to the importance of human

factors in the activities of organizations and present the critical parameters for
an effective Human Resources Management (HRM) policy and potential
practical steps for improvements in the logistics and Supply Chain
Management (SCM) services.
Effective Human Resources Management is a critical element for the
success of organizational goals. At an international level it has been
empasized the key role of the effective human resources management as a
key element of competitive advantage (Boxal and Purcell, 2003; Schuler and
Jackson, 2005; Gooderham et al, 2008). Relevant studies internationally,
have pointed out the positive relationship between HRM practices and
organizational and market performance (Harel and Tzafrir, 1999; Islam and
Siengthai, 2010).
Thriving companies exhibit innovation, efficiency, flexible structure and
require new skills in their organizations and their human resources.
Human Resources Management recognizes the vital role of the human
factor at work and its importance for the success of an organization (Noe et al,
2004; Bush and Middlewood, 2006; Torrington et al, 2008).
The management of an organization’s human resources is an integral
part of its administration and encompasses important personnel activities and
functions, in order to ensure the effective and efficient contribution of the
organization’s human talent to the creation and achievement of the corporate
vision, strategy and objectives (Mathis and Jackson, 2000; Jackson and
Schuler, 2003).
An organization’s effective HRM policy includes several functions which
can influence the final outcome of personnel effectiveness and organizational
performance of companies.
Its main functions (Millward et al, 2000; Huselid et al, 2004; Dessler,
2008) include:
¾ work and organizational design,
¾ resource planning,
¾ staffing; selection and recruitment,
¾ training and development,
¾ motivation,
¾ evaluation,
¾ compensation, incentive systems and benefits
¾ labor relations,
¾ health and safety at work,
¾ managing change and culture,
¾ communication.
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

1.2. The importance of communication within an organization

Communication is a human experience, a social activity, a process vital for

the development of human relations both in interpersonal and working level
(Verderber and Verderber, 2004). Basically, it is the exchange or flow of
information and ideas between one person and another.
Communication is a key element of human resources management in an
organization.
It is the medium through which an organisation accomplishes its goals. It
is a necessary prerequisite for the existence of an organization and a key
factor in the development and success of the organization’s targets (Katz and
Kahn, 1978; Huselid, 1995; Mayrhofer et al, 2002; Mullins, 2007; Torrington et
al, 2008).
It has been estimated that people in organizations spend more than 75
percent of their time communicating in interpersonal and organizational
situations (Taylor, 2005).
Effective communication is an essential factor of organizational success
whether it is at an interpersonal, intergroup, intragroup, organizational or
external level (Csapo and Featheringham, 2005).
The main purposes (Stearns, 1981; Mullins, 2007) served by the process
of communication in an organization are to:
(i) tranfer and exchange information, ideas, opinions,
feelings and commands with the ultimate aim of improving
interpersonal communication and human relations, avoid
misunderstadings and confunsion. It gets people involved with the
organization and enables the enterprise to convey to its manpower
its goals and philosophy,
(ii) help leaders understand how they should manage and
reduce the resistance to change,
(iii) improve organizational communication and effective
coordination of managerial functions and activities (such as
selection and training),
(iv) delegate power and responsibilities to its manpower,
(v) motivate, evaluate, reward and satisfy its human
resources,
(vi) improve interpersonal relationships, create a positive
work environment and a climate of trust and understanding.
Dysfunctional communication within an organization can create
problems such as:
- poor interpersonal relationships,
- confusion about the organizational objectives,
- uncertainty and friction among employees,
- work stress,
- absenteeism,
- poor organizational climate,
- difficulty in taking the right decisions,
- reduction of work efficiency (Ray, 1983; Tourish and Hargie,
2004).
Effective communication is critical to the success of any organization
because nowadays:
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

- market conditions are forcing for greater efficiency and quality at

minimum cost,
- human resources have much higher expectations from their work,
personal satisfaction and motivation from what they do,
- organisations are becoming ever more complex both in structure
and technology. Information needs to flow quickly between indivinduals,
teams, departments, enterprises (Mullins, 2007; Torrington et al, 2008).
It is evident that efficient communication within an organization is
essential for the effective coordination of individual and group activities and
efforts and the achievement of organizational objectives.

2. Human Resources Management, Logistics and Supply

Chain Management
Globally the logistics industry has emerged as a significant growth sector in
most countries (Bowersox et al, 2002; Kam et al, 2010).
The purpose of logistics is the supply of service/product to the demander
/ demanding unit at the right time, with the right quantity, in the right quality,
with the right cost and at the right place (Bowersox and Closs, 1996; Lin and
Hui, 2009). It deals with strategy and cooordination between marketing and
production as well as factors relating to demand management and
forecasting. At its essense, logistics deals with satisfying the customer needs
(Lin and Hui, 2009).
Although effective Human Resources Management policies have been
emphasized internationally as a key element for the success of an
organization’ s goals, its importance has been frequently undermined even in
thriving logistics and supply chain service markets.
China for example, is among the nations where although demand for
logistics and supply chain services have been growing monumentally (Bolton
and Wei, 2003), modern HRM aspects have been introduced in a rather slow
pace mainly due to the Chinese firms’ concentration on systemic – structural
aspects (Kam et al, 2010) and their general view of their employees as “a
cheap, expendable resource” (Glover and Siu, 2000, p.867).
In this respect, modern human resources management practices must
not be left aside but instead must be proactively applied to a firm’s supply
chain (Wellins and Rioux, 2000).
The term Supply Chain Management (SCM) was first used in the early
1980s to describe an emerging management discipline (Oliver and Webber,
1992). SCM has been acknowledged as one of the most effective tools for
companies to improve their competitive advantage and firm performance and
an effective management tool for maintaining business stability, growth and
prosperity (Harrison and New, 2002; Li et al, 2006; Ou et al, 2010).
We can define supply chain as the “network” of organizations that are
involved, through upstream and downstream linkages, in the different
processes and activities that produce value in the form of products and
services - in the hands of the ultimate consumer - to recyclying used products
(Christopher, 1992; Cooper et al, 1997; Harrison and Van Hoek, 2005).
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

The notion of “network” is very important taking into account that modern
supply chains are not simply linear chains but rather complex networks
(Cristopher and Peck, 2004). In this sense, products and information flows
travel in a variety of “networks” (Harland et al, 2001) that link organisations,
industries and economies.
What is vital in SCM is that the entire process must be viewed as one
system i.e) the performance of each member of the supply chain (suppliers,
warehouses, customers, etc) affects the overall performance of the supply
chain (Duclos et al, 2003).
The success of an effective implementation of SCM relies on key
factors (Sousa and Voss, 2002; Kaynak, 2003; Othman and Ghani, 2008)
such as the ability to:
- develop a flexible organization,
- implement built-to-order manufacturing,
- be customer focus,
- reduce inventory and cost,
- seek total supply chain coordination,
- develop a trusting relationship with the suppliers,
- seek total supply chain coordination,
- gather quality data and reporting,
- establish a management leadership strategy,
- develop an overall human resources management policy,
- enhance communication to reduce uncertainty and inventory
levels. Poor communication has been cited internationally as one of the
reasons for supply chain dysfunction (Shub and Stonebraker, 2009).
To be able to achieve the above, companies require human resources
who have a broad level of skills (team-building, problem solving, leadership),
are flexible and adoptable in their roles, innovative and adaptable to
reorganization (Shadur and Bamber, 1994; Gower and Tallon, 2002).
In an international level, companies that are effective in their SCM
practices have pointed out that they put a lot of emphasis on developing their
human resources by adopting HRM practices such as: training and retraining
their staff and providing them with adaptability that wiil help them to fulfill their
role in a supply chain (Gower and Tallon, 2002; Othman and Ghani, 2008).
Furthermore, in order for a SCM program to be successful a vital
requirement is the human resources’ understanding of the philosophy and
principles behind SCM as well as the collaboration and coordination between
firm human resources (Ou et al, 2010).
In addition, the organization’s human resources management must
ensure that the workforce possesses the necessary skills for the effective
utilization of quality data (incoming materials and parts, etc) and reporting
process (Ahire and Dreyfus, 2000), enabling the staff to get vital information
and knowledge on issues such as occuring problems in production processes
(Ahire and O’Shaughnessy, 2000).
Internationally, the rapidly changing business environment makes it vital
for the companies to adopt to changes in data processing requirement and
information needs (Duclos et al, 2003).
Relevant studies have shown that logistics companies can increase their
performance by employing new technologies. Many enterprises have
improved their operation efficiency by continuous implementation of
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

information/automation technologies according to their business

characteristics (Mason-Jones and Towill, 1999; Sauvage, 2003). Inter-firm
business sychronization requires inter-firm data sharing and communication.
In this context, the role of effective business communication is an
essential factor of success whether it is at an interpersonal, intergroup,
intragroup, organizational or external levels.

3. Conlusion and final remarks

Internationally, successful companies have been those that consider their
human capital as their most important asset (Jurcevic et al, 2010). Effective
HRM practices have been pointed out internationally as an important element
of service quality and customer satisfaction (Li et al, 2008).
Effective HRM practices are equally important in the supply chain
management. The importance of HRM in developing employees’ necessary
skills and maximize staff performance for supply chain success has been
widely acknowledged at international level (Hunter et al, 1996; Scarbrough,
2000).
Effective operation of supply chain, requires internal and external
synchronization, flexibility, data sharing and communication within and
between companies and departments.
The contemporary form of competition is said to be not among single
enterprises but among supply chains (Cuchiella and Gastaldi, 2006; Shub and
Stonebraker, 2009).
Supply Chain Management has over the last decades become a basis
for competitive advantage in many industries internationally. That means that
ultimately, “..the best-managed supply chain will win” (Shub and Stonebraker,
2009, p.38).
HRM practices such as: trainning, work motivation, employee
commitment, adaptability, empowerement, leadership and shared values can
positively contribute to supply chain success (Shub and Stonebraker, 2009;
Read, 2009).
An effective HRM policy should encourage innovation with recognition
and reward of managers, teams and individuals. Several other HRM policy
parameters also constitute a significant element of the potential improvements
of logistics and supply chain management.
Human Resources Management is a key element for the success of
organizational goals.
In this respect, modern human resources management practices must
not be left aside but instead must be proactively applied to a firm’s supply
chain (Wellins and Rioux, 2000).
 2nd INTERNATIONAL CONFERENCE ON SUPPLY CHAINS

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