VUCA approach towards Supply Chain

Volatility, Uncertainty, Complexity and Ambiguity (VUCA) Drivers are increasingly used in recent years to describe the current business environment and the impact it has on the supply chain performance.

• The VUCA term became increasingly interesting to the leaders who seek to operate their businesses efficiently and effectively.
• Supply chain managers love predictability.
• Unfortunately, today’s global market is anything but — it’s VUCA (volatile, uncertain, complex, and ambiguous).

Companies in all industries have to carefully strategize to be ready for changes in the market and keep everything moving forward.

VUCA Characteristics, Examples, and Approach (Source: hbr.org)

Far too many analysts and advisors are telling you that you need to reduce VUCA.

While not having anything against this approach in principle, and definitely not advocating that you increase VUCA through poor processes and management, we believe that you have to learn to operate in a VUCA environment and that this requires different skills and tools than those required in a more stable environment.

• Focusing on global pipeline visibility, which requires supply chain integration with both internal constituents (allied functions) and external trading partners (contract manufacturers, suppliers, transportation carriers, and logistics providers) is now becoming a critical competency.

“But before a company can collaborate or partner with others to reduce pipeline inventory or landed cost or improve lead times, it needs to have visibility into them.” as stated in Aberdeen’s Supply Chain Visibility Excellence report.

• Applying this idea to the food supply chain is uniquely critical because of the way food underpins everything on earth from demographics and political stability to human health and social justice.
• Kellogg’s efforts with its agricultural supply base are a major step in the right direction.

Read the complete article on how Kellogg stabilized their food supply base here.