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The human factor in VCA

The changing role of people in Value Chains

Automation has been replacing many routine labor tasks in recent years. However, we currently see an increased involvement of computer intelligence in more advanced tasks that involve a higher degree of analytical skills. In the future, this digital power will be paired with the creative, social, and emotional skills of human beings. The role of human involvement in value chains is changing. There are constantly more and more tasks to be digitized, automated, or outsourced. Demand for skills is changing rapidly and Human Resource departments should stay in control by taking the lead in this transformation.

The organizations of today’s world need to rely heavily on their employees to create value. In knowledge or skills-based industries such as the technology sector, organizations need to ensure that they have the right talent on board and that they manage to grow and retain talent within the organization. The right organizational set-up allows employees to use their full potential and create value within and between teams and with stakeholders, which further enhances human value creation. However, if organizations fail to create superior value for employees, it is very difficult for employees to produce superior value for customers.

Changes in the Human Factor

An example of the quantification of the human factor in value chains can be seen in cases where automation replaces full-time employees (FTEs). Many companies have cut down the number of FTEs, as the value creation of those FTEs can be replaced by machines. For example, Amazon has bought Whole Foods in the US, and due to advancements in technology many positions such as cashiers or customer service agents can be replaced by new technology. In the picture below, you can see a woman shopping at the new Amazon Go. She picks a product from a shelf and it is automatically added to her basket, replacing cashiers and providing direct information about the product. In this way, the human factor in the value chain of a retail store shifts from cashiers and customer service agents to app developers and technical support agents.

The supplier side of Value Chains

Many organizations have started to reduce the number of suppliers they deal with on a daily basis so that they can reduce lead times and costs by leveraging quantity and use. In this way, they also reduce the number of FTEs. The human factor in the industry value chain changes and new roles for humans are created.