Pricewaterhouse_3_aprile_SCME

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Pricewaterhouse_3_aprile_SCME

  1. 1. www.pwc.nlManaging Business in aVUCA EnvironmentA structured approach Piet van der Plas Milan, 0304.2012
  2. 2. An outlook into the future ... There are many things we don’t know and but few things we can learn © PwC Slide 2[STR]
  3. 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[STR]
  4. 4. Welcome to the 21st Century… Egypt, 28.01.11 Japan, 11.03.01 © PwC Slide 4[STR]
  5. 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 Slide 5[STR]
  6. 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 Slide 6[CPX]
  7. 7. The Extended Enterprise: a Complex System social and relational complexity velocity uncertainty Structural and continuous changes evolving interdependencies © PwC Slide 7[CPX]
  8. 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 Slide 8[CPX]
  9. 9. Welcome to the 21st Century… Egypt, 28.01.11 Japan, 11.03.01 © PwC Slide 9[STR]
  10. 10. Welcome to VUCA! Volatility Uncertainty Complexity Ambiguity © PwC Slide 10[STR]
  11. 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 Slide 11[STR]
  12. 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 Slide 12[STR]
  13. 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 © PwC Slide 13[STR]
  14. 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 Slide 14[STR]
  15. 15. Risk Management: the choices Avoidance Acceptance Mitigation – Postponement – Supply-Side diversification – Demand-Side diversification – Risk sharing – – Targeted redundancies Anticipation TIME COST – … © PwC Slide 15[STR]
  16. 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 © PwC Slide 16[STR]
  17. 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 Slide 17
  18. 18. Surviving in a VUCA environment Volatility Vision Uncertainty Understanding Complexity Clarity Ambiguity Agility © PwC Slide 18[STR]
  19. 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 Slide 19[STR]
  20. 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[STR]
  21. 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© PwC. All rights reserved. Not for further distribution without the permission of PwC. "PwC"refers to the network of member firms of PricewaterhouseCoopers International Limited(PwCIL), or, as the context requires, individual member firms of the PwC network. Eachmember firm is a separate legal entity and does not act as agent of PwCIL or any othermember firm. PwCIL does not provide any services to clients. PwCIL is not responsible orliable for the acts or omissions of any of its member firms nor can it control the exercise of theirprofessional judgment or bind them in any way. No member firm is responsible or liable for theacts or omissions of any other member firm nor can it control the exercise of another memberfirms professional judgment or bind another member firm or PwCIL in any way.

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