Three ways supply chain can prepare for change in today's market

“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

- Jack Welch, the late and former chairman and CEO of General Electric

I always remember this saying when I think of organizational change management, especially in the supply chain industry. This industry is constantly grappling with relentless change, both external and internal. In fact, it was born of it.

Of course, change management is critical in every industry, but in supply chain, organizations are constantly seeking innovative solutions to respond to ever shifting market conditions and evolving customer expectations. And to boot, they must efficiently operationalise and manage just about everything from sourcing to inventory, from distribution to transportation and last-mile delivery.

In such a scenario embracing change is necessary for survival and only those organizations who create a culture of change, foster talent and growing skills can meet that challenge head on.

Understanding that change is not optional

In the recently launched 2025 3PL report, 61% of shippers and 73% of 3PLs said change to their supply chains was critical or significant. Though it is interesting to note that only about a third of shippers (28%) said it was critical, compared to even fewer --- less than a fifth (18%) --- of 3PLs. A few reasons for this could be that shippers face more direct customer and competitive pressures compared to 3PLs, who are more concerned with operational excellence and cost management. Either way the need for change, especially the ability to transform rapidly and innovate, cannot be overlooked.

Organizational change management, when done correctly, presents a structured approach to smoother transitions, increased efficiency and improved employee engagement. These help organizations tide disruption effectively. For shippers and 3PLs, it also means adapting to new technologies and processes swiftly, meeting and even anticipating fluctuating market conditions.

Change is for the people and by the people

People are at the heart of organizational change management because it’s they who drive the adoption of new processes, technologies and strategies. This is particularly true in the supply chain industry, where there is so much reliance on both upstream and downstream partners and the strength of those relationships. While technology can help ease operations, it’s still the people that drive (or not) success, whether you are relocating inventory, addressing changing customer preferences, or meeting rapidly evolving modified logistics teams.

When we asked shippers and 3PLs what the requisites for successful change management were, the two responses that emerged at the top were a) empowerment of people and b) involvement with people. That’s no surprise because successful transformation depends on how well the people support or buy into the change initiative. This is further bolstered by the organization’s ability to create a persistent culture that embraces change and to get leadership buy-in too.

Best practices: Lead with empathy and make employees feel valued; communicate openly, early and often; actively listen and take action on the feedback; involve people at the decision-making level; foster a sense of responsibility and engagement, from the leadership level to the shopfloor.

Building talent and skills necessary to support change

When we asked 3PLs what the barriers to AI implementation were, as high as 25% said that it was a lack of skilled personnel. Beyond the meteoric rise of AI-related skills, a surge in the adoption of advanced technologies such as sensors enabled by 5G, blockchain, advanced computing, machine learning technologies and remote collaboration tools means supply chain organizations will need to ramp up their tech game swiftly.

And despite a healthy tech investments and adoption by 3PLs, discrepancies between implementation and demand continue to exist. For example, 33% of shippers are expecting capabilities in supply planning/demand forecasting but less than a fifth (19%) of 3PLs are planning implementations in this area. Control tower visibility (68%), advanced analytics (50%) and cloud-based solutions (40%) emerged as the top shipper must-haves, but only 55%, 42% and 39% respectively of 3PLs have capabilities in these areas.

As more and more technologies come into play, it also means that organizations will need to attract new talent and visionaries. While this has been a tall order in this industry for a while, the bigger catch may be figuring out how to retain the ones you do bring to your organizations. For this to happen, shippers and 3PLs will have to invest in modernizing the tools and systems that support the employee life cycle from recruiting through retirement, training and development programs that enable flexible and engaging careers and fostering a culture of continuous learning. This will not only enhance individual abilities but also strengthens the bond between employee and employer. And we all know, the more connected and engaged the workforce is, the better it can flex to meet the unexpected.

Best practices: Invest in innovation and transformational tools to support the full employee lifecycle; offer targeted and flexible training programs; invest in training partnership with vendors for specialized courses; provide mentorship, peer-coaching and on the-job-training; enable cross functional learning programs.

Jack Welch also said “Where there is change, there’s opportunity,” and I think there is an opportunity for this industry to make a fundamental shift in mindset. Because historically, humans have always been at the center of manufacturing and supply chain line. In fact, the idea of human capital emerged from this industry. Now the industry faces a momentous change because this idea is being upended by advanced technologies. Shifting the thinking and defining the role of technology-enabled people in this industry will be crucial for success. And that success can happen only with the right organizational change management strategies.

Get an in-depth perspective on change management in shipper and 3PL relationships in our  2025 29th Annual 3PL Study.