Just a couple of years ago, supply chain experts defined VUCA as volatile, uncertain, complex, and ambiguous. But after the worldwide supply chain disruptions in 2020 (some of which are still being seen and felt today), VUCA has become synonymous with the global pandemic.

No matter how you slice it, VUCA has taken on new importance as we continue through 2021. It’s become paramount for supply chain leaders to consider how VUCA conditions can impact local, regional, national, and global operations and what can be done to build resilience and responsiveness.

Let’s unpack this a little more.

What Does VUCA Stand For?

First a few definitions for clarity:

• Volatile: large-scale changes or fluctuations that happen with little or no notice
• Uncertain: unable to predict the future with confidence
• Complex: multi-layered challenges that many moving parts influence
• Ambiguous: a lack of clarity on events and their impacts

While companies in the United States watched pandemic spread in China, and then to many other parts of the world before reaching U.S. soil, we were still caught unprepared for how it would affect our businesses and the supply chain at large.

Using VUCA Characteristics to Build Resilience

The key theme in 2020 was simply to survive. Companies had to suddenly switch gears, try new technologies and processes, seek out new vendors and routes to market, and a whole slew of experimental techniques just to keep the lights on and the doors open.

We’re still not fully “back to normal,” but the dust has had some time to settle. Now, companies can look back at what worked well and what didn’t during the last year and use that knowledge to become more resilient moving forward. Learning, testing, and evolving that would have otherwise taken companies years to complete have occurred in the short time span of just a few months.

That’s why 2021’s theme isn’t just to survive, but also thrive.

Now is the time to look back at the past year and understand VUCA’s impact on your supply chain operations. Here are some questions that can help spur meaningful conversations amongst your leadership:

• What were the biggest negative impacts of VUCA on our business last year (e.g., loss of customers, longer lead times, unplanned investments in technology, etc.)?
• What were the most significant positive effects of VUCA on our business last year (e.g., new customer acquisition, more market share, leaner operations, etc.)?
• Which weak areas do we need to address that we didn’t recognize before the pandemic?
• How can we better react to volatility? Uncertainty? Complexity? Ambiguity?
• What can we do today to plan for 2022 and beyond?

One idea worth exploring that can address all of the above questions is operating in a constant VUCA state of mind, which we’re talking about in our next blog post.