Supply Chain Strategy Of An Organization In A VUCA World | SIBM Blog

Supply Chain Strategy Of An Organization In A VUCA World

The acronym VUCA (Volatility, Uncertainty, Complexity, Ambiguity) has found a prominent place in the current business environment with every advisor, leader and analyst splitting hairs over the possible drivers of the same trying to put their finger on the pulse of the situation and advocate their two cents on the possible measures to be undertaken to better prepare your organization for such changes.

This phenomenon was born during the culminating stages of the Cold War and was coined by the U.S. Army to describe the multilateral fast-changing world back then. The idea to tackle the current unpredictable global scenario posing tall orders with multiple stakeholders don’t advocate resistance or distancing yourself from the proponents of such changes by working in silos but to first gain insights on the possible room for opportunities that it brings forth and then undertaking respective measures to reduce, reorganize, rethink your strategies on how to operate in an environment demanding adaptability at the forefront to respond profitably by transforming the way products are brought or services are meted out in the market. It is to insulate your processes to make them more reliable and produce desired results while you scale up in your operations.

If you ask any one of the common problems plaguing any supply manager and he/she will safely tell you it I primarily centred around reducing pipeline inventory or landed cost and improve variable lead times brought by the increasing advent of ‘mass customization’ which entails global outsourcing/multi-sourcing these days. There is a need for increased transparency and visibility into these processes which are required to make informed decisions while trying to integrate the internal allied functions like manufacturing and external trading partners like third-party delivery vendors, stockists, retailers etc.

One of the ways to tackle this new world order would be to permit frontline managers to fast-track decisions instead of waiting for approvals, allowing increased bandwidth and authority without the need to escalate through formal time-consuming channels and doing away with the corporate chain of command if the prevailing circumstances require such a call for action to stem errors as and when they arise with the appropriate diagnosis without hampering financial and operational efficiency considering the supply managers are in direct contact with the factory floor. Real-time monitoring and alert-based decision making will be key to achieve the same.

Technology has been one of the biggest disruptors in this sector which lends an important hand to a largely scattered and unorganized industry especially in India where players like Sendit, Rivigo, Blackbuck finding traction from deep pocketed VC’s and Angel investors, have shown market value through a renewed focus on technology concerted decisions by infusing it in the supply ecosystem to develop proprietary solutions using data analytics, cloud chain computing for forecasting and tracking systems to revolutionize logistics which benefits the entire value chain by making the whole process leaner. According to research conducted by QY Research Reports the increased adoption of cloud technology by various enterprises is the prime factor for the significant growth of the market for supply chain analytics around the globe and implementing an emphasis on digital data-driven decision making.

Regarding analytics, the key Aspects of the supply chain which are touted to be impacted include machining, insights, visualization and security which will help in capturing and integrating supply chain data to obtain meaningful insights and provide business intelligence required to flourish and contribute to the economic growth of the organization and our country. This leads to a cascading effect which not only benefits the supply-chain but the clients associated with the value chain seeking similar services to invest in product diversification or open up new markets.

Logistics is going to pave the way for the future with customer delight heavily dependent on faster and safer deliveries, requiring unimaginable turnaround times coupled with real-time status updates and performance inputs since the last mile deliveries are expensive kills profits and make or breaks your customer experience through the brand interaction journey. To give superior value for money for your partners, it is imperative to win the loyalties of the customer by ensuring optimum service levels by ensuring a renewed focus on value-adds like cost reductions, just-in-time capabilities, getting products to store shelves faster, new methodologies, and automation with Amazon is one of the stalwarts of the industry showing how it’s done to the rest of the world.

Amazon has showcased time and again that they are the undisputed pioneers of this space by depicting unparalleled levels of innovation from warehousing to inventory management to delivery.

For example, a big part of the Warehousing success arises from the strategic location near metros or population hubs. If the demand permits then even mini-warehouses are set up to cater to smaller areas. For delivery, the omnipresence of Amazon to leverage more traditional to high tech delivery mechanisms has ensured a plethora of options for customers to choose and create deep loyalty towards their subscription-based service Amazon Prime to drive repeat purchase behaviour and offer convenience.

From Drones to Amazon-branded trucks to tie-ups with UPS/FedEx has allowed the Seattle based company to push out the product in lightning fast times. Embracing technology by introducing robotics and automation to reduce stacking and storing times has made the process a lot cleaner and efficient freeing up funds, time and space with unprecedented speeds.

In conclusion, where the world runs amok to fine-tune the requirements of the growing scope of possibilities in a multi-discipline world, it is essential to embrace the harbingers of such a dynamic environment and try to stack up until the required tools in your arsenal to accommodate the requirements of such an unpredictable atmosphere. Machine learning algorithms, IoT, Big data analytics etc have helped to realize business value and significantly impact costing and decision to make efficiency. Improvements on the go and Agility will be the new fundamentals to drive growth and competitive advantage finding high priority on the list of long-term agendas for any organization to address the VUCA world.

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Siddharth Gupta MBA – Batch 2018-20 Institute – SIBM Pune

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