Some critical elements of Unit 7 deal vulnerability. That is, what specific parts of the supply chain are vulnerable to what types of risks? What is the criticality, severity, and probability of the risk? What level of resilience is built into the supply chain system? In simpler terms, what is the plan B or plan C? Two acronyms you may find useful to master: VUCA and TUNA.
Risk and vulnerability are addressed first by VUCA, defined as volatility, uncertainty, complexity, and ambiguity, and was created by the military during the 1990s as part of the Gulf War (Mangan & Lalwani, 2016). Another term created as part of long-range scenario planning, TUNA, used assess elements of a supply chain over time with multiple scenarios. TUNA defined as turbulence, uncertainty, novel, and ambiguous. Either way, the external environment changes rapidly and unpredictably, making leaders look silly and unraveling planned strategy.
As an illustration of how critical the supply chain risk and vulnerability assessment are there is the case of Kentucky Fried Chicken (KFC) in the United Kingdom, circa 2018. Based on a change in supply chain structure moving from a specialty food distributor to a third-party logistics (3PL) distributor. The 3PL, like many such companies, owns very few assets. They network a series of trucking companies and other carriers to provide service. In this situation, there was no visibility in the supply chain and the vulnerably and risk to KFC UK became crystal clear. Two months after the supply chain breakdown, less than half the 900 KFC outlets in Britain could offer a full menu. The shift to a 3PL distribution approach provided no resilience capability. What resilience strategies need to be built into any supply chain system to reduce risk and vulnerability?
