­­­The current global economic situation with increasing pace of change, growing global commerce and lack of predictability about the future is often being described with the new term VUCA (volatility, uncertainty, complexity and ambiguity). The VUCA framework is shaping the development of new organisation development and leadership thoughts across the globe. So let us take a moment to demystify the term VUCA.

VUCA best describes the volatile and chaotic business, economic and physical environment that we all face nowadays. In the VUCA environment there are more changes, a faster rate of change and the size of changes are so impactful that they are termed as ‘disruptive'.

The VUCA nature of our surrounding environment is not a new phenomenon, but it seems to have amplified in the last decade as technology has advanced at a rapid pace and organisations have become more globally connected than ever. The systems under which the world operates and the ways in which businesses operate are vast and complex - interconnected to the point of chaos & uncertainty and the linkage between cause and effect becomes indiscernible.

Future is VUCA

If we look at some of the trends which will be shaping the future of businesses and supply chains and the potential inter-linkages between these trends, it will become obvious that VUCA is here to stay.

Emergence of megacities

The UN's World urbanisation prospects report indicates that urban population will be 70 percent of total world population by 2050, up from current levels of 50 percent. Indians are already witnessing their top cities expanding to become megacities and to support this population growth there are significant infrastructure investments that have been planned. Logistics and distribution infrastructure will also require commensurate investments to cater to this dense urban population.

Customer expectations

Future customers will require customised products and a personalised service. For delivering on these expectations, companies will adopt mass-customisation techniques and tie-up with agile service providers. Simulation models will be created for analysing buying and usage behaviour of customers. Supply chain managers will need to optimise the cost to serve to remain competitive in such a market place.