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The human factor in VCA

Changing role of People in Value Chains

The automation has been replacing many of the routine tasks in decades. However, currently, we see the increase of computer intelligence to be involved in more advanced tasks that involve a higher degree of analytical skills. In the future, this digital power will be paired with creative, social and emotional skills of human beings. The role of human involvement in the 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 be in control and take the lead in this transformation.

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

Changes within the Human Factor

One of the examples of quantification of the human factor in value chain is looking at the cases where automation replaces full-time employees (FTEs). Many companies cut-down the number of FTEs as value creation of those FTEs can be replaced by machines. For example, Amazon has bought Wholefoods in the US and due to advancements in technology, jobs like cashiers or customer service would be replaced by new technology. At a picture below, you can see a woman shopping at new Amazon Go, where she picks a product from a shelf, which 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 retail store shifts from cashiers and customer service to app development and technical support.

Supplier Side Of Value Chain

Many organizations 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 buy in volumes. 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.