Supply chain analytics – Sometimes you just have to VUCAT

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If you attended the Gartner Supply Chain Executive Conference you may remember the term “VUCA” from the keynote on the first day (Trevor Miles also wrote a blog post on VUCA here). It was used to describe today’s supply chain and stands for “Volatility, Uncertainty, Complexity and Ambiguity.” The keynote speaker stated VUCA is a military term but certainly fits when discussing supply chain challenges. Let’s look at where the “T” in VUCAT came from. The same keynote also described the foundation that today’s supply chains are built on. In particular, there were two analogies that stood out and challenged the audience to think about their own supply chains. The first analogy was having your supply chain foundation built on technology that resembles that of a “picket fence.” In this case, there are gaps where key information may “slip through the cracks” and it becomes difficult to do any meaningful supply chain analysis. If you use Excel this may sound familiar. Supply chain analysis is difficult because those that need to participate are looking at different data, missing data, and there are gaps in the analytics. If your supply chain analytics are built around Excel spreadsheets then you may be bound by the “picket fence.” Excel may be sufficient in an environment where there is little “VUCA,” but when managing today’s supply chain challenges, Excel is not a scalable solution. The second analogy of interest used to describe the technology a supply chain foundation may be built on was that of “bricks and mortar.” In this case, the analytics required to respond to “VUCA” are just not flexible enough. Old processes that are cast in stone, long analytic run times, and user interfaces that are far from being user friendly are just a few reasons to describe this technology as “bricks and mortar.” If you are trying to get your supply chain analytics from your ERP system, which for the most part is the transaction system, this may sound familiar. In keeping with the analogy it would be like getting blood from a stone. This is the reason many people continue to turn to Excel for supply chain analytics but soon run into the “picket fence” problems. This is where the “T” in VUCAT comes from, Technology that does not support today’s “VUCA”. So what is one to do with “VUCAT”? Some analysts were talking about “best of breed.” This may mean abandoning your Excel spreadsheets or getting rid of ERP components that are either difficult to deploy or are not doing the job. In these cases “VUCAT” is actually a verb. For example, if somebody asks, “What are we going to do with all these Excel spreadsheets?” You might say, “We just have to VUCAT and replace them.”  Look for this new word in the next APICS dictionary :) If you are going to replace the “picket fences” or “bricks and mortar,” what characteristics will allow you to manage “VUCA”? Here are three key requirements for today’s supply chain analytics;

  • “Know sooner” by being able to continuously monitor plan versus actual and alert participants not only of the event but of the consequences.
  • “Collaborate now” by automatically identifying not only the consequences of change but those individuals impacted by it and thtat can contribute to its resolution.
  • “Respond immediately” by evaluating any number of resolution scenarios in seconds with anyone in any place and compare alternative actions against operational and financial metrics.

This means you can embrace “VUCA” and create a competitive advantage by being a “first mover.” Did you hear the term “VUCA” used at the Gartner conference or anywhere else? What is your take? Is it a new more descriptive term for today’s supply chain or more of the same?

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