Presentazione PWC seminario AD-net

1. www.pwc.nl
Managing Business in a
VUCA Environment
A structured approach
Piet van der Plas
Milan, 0304.2012

2. An outlook into the future
... There are many things we don’t know
and but few things we can learn
© PwC
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3. Overlapping phenomena
Structural changes in
Business, Operations
... There are many things we don’t know
and but few things we can learn Chains
and Supply
© PwC
Slide 3
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4. Welcome to the 21st Century…
Egypt,
28.01.11
Japan,
11.03.01
© PwC
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5. Future Supply Chains: an easy prediction
More pressure
than ever!
Globalisation and Demand shift COMPLEXITY
Cost volatility
EXPLOSION
(everything depends on
Lowering of Customer loyalty everything)
Increased difficulties in accessing credit
Higher expected (and segmented) service levels
(velocity, reliability, flexibility)
Rising rates of new product launches
(combat commoditization, meet increasingly segmented Customer needs)
Increasing number of Joint Ventures, Mergers & Acquisitions
(achieve geographical coverage, Market penetration, offering broadening)
© PwC
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6. What is a Complex System?
A complex System is one whose
properties are not fully explained
by an understanding of its
component parts
relationship effects relevance
non-linearity in relationships
unpredictability
history debatable relevance
Edward Lorenz’s Water Wheel (Amsterdam, Nemo Museum)
© PwC
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7. The Extended Enterprise: a Complex System
social and relational
complexity
velocity
uncertainty
Structural and continuous
changes
evolving
interdependencies
© PwC
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8. The Extended Enterprise: a Complex System
social and relational
complexity
Ecological impact velocity
uncertainty
Geopolitical impact
Economic
Structural and continuing impact
changes
Technological impact
evolving
interdependencies
© PwC
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9. Welcome to the 21st Century…
Egypt,
28.01.11
Japan,
11.03.01
© PwC
Slide 9
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10. Welcome to VUCA!
Volatility
Uncertainty
Complexity
Ambiguity
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11. What does VUCA mean…
Volatility High rate of change (Clockspeed)
The nature and dynamics of change, and the nature and speed of change
forces and change catalysts
Uncertainty Unclear present situation and future outcomes
The lack of predictability, the prospects for surprise, and the sense of
awareness and understanding of issues and events
Complexity Multiplicity of key decision factors
The multiplex of forces, the confounding of issues and the chaos and
confusion that surround an organization
Ambiguity Lack of clarity about the meaning of an event
The haziness of reality, the potential for misreads, and the mixed
meanings of conditions; cause-and-effect confusion
© PwC
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12. Risk defined…
The effect of
uncertainty on
objectives
(ISO 31000 –Risk
Management)
The potential that a
chosen activity will
lead to an undesirable
outcome
(Oxford English Dictionary)
PROBABILITY
IMPACT GOALS
Senior director supply chain, for medical equipment company :
“Anything that holds me back from delivering to the customer
whether it be long term or short term is classified as a risk.”
© PwC
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13. The Risk Management Area
HI
KNOWLEDGE OF BUSINESS IMPACT
REALM OF REALM OF
UNCERTAINTY RISK MANAGEMENT
REALM OF REALM OF
IGNORANCE AMBIGUITY
LO KNOWLEDGE OF EVENT LIKELIHOOD HI
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14. Which Risks are to be managed?
HI
4 3
IGNORE ? STRATEGIC
STRATEGIC RISK
BUSINESS IMPACT
RISK MANAGEMENT
MANAGEMENT ?
1 2
TACTICAL
IGNORE RISK
MANAGEMENT
LO EVENT LIKELYHOOD HI
© PwC
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15. Risk Management: the choices
Avoidance
Acceptance
Mitigation
– Postponement
– Supply-Side diversification
– Demand-Side diversification
– Risk sharing
–
–
Targeted redundancies
Anticipation
TIME COST
– …
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16. Risk Management: a structured approach
1 Scope definition
2 Risks identification
Endogenous – (partly) under supply chain players’ control,
Exogenous – out of supply chain players’ control
3 Action areas identification
What Risks are to be Managed ? – impact versus likelihood
4 Risk dynamics modeling
Strategic Network Design, System Dynamics
5 Risk Management strategies selection
Avoidance, Acceptance, Mitigation
6 Risk Management strategies tuning
7 Trade-offs evaluation and decisions
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17. Are you prepared to manage the risk?
Are you aware of your What is your ability to
supply chain risks? react?
 What is your framework for supply chain risk  Do you have a budget to implement risk
management? strategies?
 Have you freed up capacity?  Have you defined action plans to mitigate
risks?
 Are risks in the supply chain identified?
 Have you assigned responsibilities to manage
 Which indicators determine the impact and
risks?
risks?
 Have you defined your strategy for risk
 What control mechanisms are defined and
escalation?
validated?
 What are the plans for business continuity in
 Have you installed a multifunctional team?
case of supply chain disruptions?
 How often do you review your risks?
 Do you audit your suppliers?
© PwC
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18. Surviving in a VUCA environment
Volatility
Vision
Uncertainty
Understanding
Complexity
Clarity
Ambiguity
Agility
© PwC
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19. What does VUCA mean…
Vision Have a clear intent, create a future state
Understanding Look, listen, understand the system you’re in
Clarity Make sense out of the (apparent) chaos
Agility Privilege wirearchy (1), not hierarchy
(1) "Wirearchy is a dynamic flow of power and authority based on: knowledge, trust,
credibility, focus on results enabled by interconnected people and technology"
(Jon Husband, 1999)
© PwC
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20. The VUCA style
Flexible, decentralized empowered networks with
a structure of strategic intents
Learning through extensive
experiences, scenarios and rapid
P-D-C-A cycles
Strategic sense-making
beyond operational
problem-solving
© PwC
Slide 20
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21. Add closing statement here...
PwC | Consulting – Strategy & Operations
Dott. Roberto Crippa CPIM ir. Piet van der Plas CPIM
Tel: +31 (0)88 792 29 54 | Mobile: +39 348 85 95 060 Tel: +31 (0)88 792 29 32 | Mobile: +31 (0)6 43 57 13 61
Email roberto.crippa@nl.pwc.com Email piet.van.der.plas@nl.pwc.com
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