Many technologies today are outdated, as they were designed to handle supply chains functioning 30 or more years ago, says Amber Salley, vice president of industry solutions at GAINS.

Supply-chain managers operated for decades with the idea that there is a lot of predictability in their customer demand and in their supplier base. But for many companies, Salley says, COVID-19 showed that assumption may be misplaced. She cites VUCA — an acronym coined by the military which stands for four significant factors negatively impacting supply chains: volatility, uncertainty, complexity and ambiguity.

Volatility refers to variability in customer needs and supply base, “and that's increasing,” Salley says. “Customers want more. The supply base is more unpredictable.”

Uncertainty refers to not knowing when disruption is going to occur. “What are those unknown unknowns that are going to affect your supply chain, and how do you best mitigate them?” asks Salley. 

Complexity grows as companies attempt to respond to customers.

And ambiguity refers to different views of what's happening in one’s supply chain environment, making it harder to make high-quality decisions. 

Salley says most textbook best-in-class processes were developed 30 to 40 years ago when there was less complexity, and technology systems could perform fewer tasks. “But here we are in 2024, and cloud computing, data science operations and research have evolved,” she says. “Yet the technologies that are being built and designed are to support those 30- to 40-year-old ways of working that aren't considering complexity and the management of uncertainty.”

With the evolution of technology and probabilistic techniques, she says, companies can think more in a different way and use technology to identify ranges of outcomes, then assign a probability to each future occurring. “Then they can bring all that together to inform your decision-making.”

For information on the next Gartner Supply Chain Symposium/Xpo, click here.