Mind Over Matter: Planning Horizons in a Dynamic Economy
by Kelly Barner
Uncertain conditions are something that every supply chain, no matter how long or short, global or localized, has to withstand. But while most organizations would agree with this notion, few would agree as to exactly what characterizes uncertainty.
Uncertainty is a human creation – not because we set unexpected circumstances in motion in all cases, but because the majority of us expect to know what will happen next.
All conditions and circumstances that have not yet occurred are unknown. With the exception of the sunrise, sunset, death, and taxes, these unknown circumstances come with varying degrees of probability.
An example – Hurricane
Robust risk profile
The key to managing uncertainty has less to do with luck and location than it does to do with the availability of information. I used the example of a natural disaster above, but the same is true of financial downturns, geopolitical instability, and labor strikes. Increasing visibility is the best way to minimize uncertainty. Building a robust risk profile fueled by authoritative sources of information and keeping that profile up to date in near real time is a transformative approach that any company in any industry can benefit from.
In fact, while predictive analytics may still sound like the stuff of science fiction, in many cases it only requires increased awareness that an event is probable long enough in advance to prepare for it. The hurricane that destroyed a huge area of New England in 1938 is just as possible today as it was back then. The difference comes from a modern combination of information and communications. Today, the storm would be watched closely by meteorologists – possibly for days – as it moved up the coast. Businesses would be locked up. Homes would be shuttered. Children would be kept at home. Emergency medical services and public response teams would be ready.