VUCA Environment

In the activity of our last logistics class we got in contact with an environment that best can be described as VUCA. For me the term VUCA was completely new and I wanted to know it’s meaning. This blog post is addressed at those that, just like me, are unfamiliar with the term and want to obtain an understanding of it.

The acronym VUCA comes from the American military and describes the highly demanding conditions in war zones, where nothing could be predicted and everything could change from one day to the next. The term VUCA has been adopted to project management as well as general corporate environments because most of the time these conditions are also common in these business environments. VUCA stands for:

• VOLATILE – change is rapid and unpredictable  in its nature and extent.
• UNCERTAIN – the present is unclear and the future is uncertain.
• COMPLEX – many different, interconnected factors  come into play, with the potential to cause chaos and confusion.
• AMBIGUOUS – there is a lack of clarity or awareness about situations.

HOW TO DEAL WITH A VUCA ENVIRONMENT?

In order to deal with VOLATILITY a clear VISION is needed for orientation when it feels like everything is changing around you. So define your vision and make sure you and your project staff always keep it in mind.

UNCERTAINTY can be countered with UNDERSTANDING. Information is needed to make decisions. So make sure there is a way to exchange knowledge between all participants. Additionally, you should also deal with risks early on and conduct detailed risk management.

React to COMPLEXITY with CLARITY. Provide clear direction, communicate clearly and try to design processes as simply as possible.

Fight AMBIGUITY with AGILITY. Ensure cooperation and communication between all project participants. Working agilely makes this simple, for example, by having a daily Scrum to keep everyone up-to-date.

As Logistics is defined by the flow of information and goods, dealing with a VUCA environment is definitely an important part of any logistics manager’s day-to-day business. I hope this post brought some clarity about the meaning of VUCA and some of you can benefit from it. Detailed information can be found here.

Amazon’s most surreal warehouse patents

As the last blog posts of Belen and Lucas showed, the company Amazon is driving innovation forward in the logistic industry like no other company. In accordance with our last class about warehouse design, I was curious about what innovations might come in the next years and found some unbelievable patents of Amazon for new era warehouses.

Number of patents in the US granted to Amazon from 2010 to 2019 (Statista, 02.04.2020)

As the chart above indicates, Amazon is obtaining hundreds of patents every year. By doing this they want to assure their position as a world leading online marketplace. In order to have the warehouses as near as possible to the customer, Amazon is looking up to the air and down to the ground to find new possibilities for warehousing in highly urbanized areas. Two of the patents that astonished me the most are listed beneath. More incredible patents can be found here.

An underwater Warehouse

The goods would be stored in watertight containers that have a fish-swim-bladder-like cartridge in order to control their height in the water. When a container needed to be retrieved, acoustic waves would be sent to it to activate the cartridge, which would send the package to the surface of the water. In the pool warehouses, boxes could be stacked in endless piles with no need for humans or robots to move around them and therefore no space for pathways between the boxes is needed. This would give a huge advantage in space usage in comparison to usual warehouses. [More Info]

The beehive-like Drone Tower

Described as a “multi-level fulfillment center for unmanned aerial vehicles”, the tower would be particularly useful to Amazon in densely populated areas. Amazon is already testing the drones aka. bees that would be needed for this type of fulfillment centre, as we have seen in the last logistics class. The drones are able to fly at heights of 122 meters with a speed of 80 km/h and around 2.3 kg of cargo weight. Despite many regulatory issues that the towers would face, this could become reality much faster than we expected. [More Info]

Disney’s virtual queue

I am a person that gets annoyed by waiting times and queues a lot. When I think of fun activities that are connected with possible long waiting times, my brain instantly pictures a scale with the fun part on one and the waiting part on the other side. As a result I mostly decide not to do the activity or if possible do it on working days where the queue is expected to be much shorter. Disney’s virtual queuing approach might change my perception of amusement parks.

Virtual Queue at Disney

Disney started to introduce virtual queues to some of their most popular attractions at Disney World in order to avoid enormous queues and waiting times. Through an application, the visitors are able to request a boarding pass and will be assigned to a specific boarding group. The app also displays the remaining waiting time which gives the visitors the opportunity to visit other attractions, go shopping or have lunch in the meantime. In theory this new approach is adding value to the visitor’s experience by enabling them to spend the waiting time for their favorite attractions with more fun activities than waiting in line. In reality Disney has some difficulties with the implementation because some customers are resisting the change. For me personally, virtual queues offer huge possibilities to enhance the customer experience in activities that are connected with large queues and I already see myself planning and scheduling every minute of my visit at an amusement park…

You can find very detailed information about Disney’s virtual queues here.

Inventory Costs – Pillage & Ullage

Watching the video about Inventory Management from Mal Walker I stumbled across two terms I have never heard before and which aroused my curiosity – Pillage and Ullage.

Inventory Management – An Introduction with Mal Walker

While Ullage describes the unexplained loss or damage of goods, Pillage characterizes the actual theft. The annual cost of inventory theft is around $15 billion for warehouses, manufacturers and shippers and therefore needs to be considered in an inventory cost calculation. I didn’t expect this number to be this large because of the highly advanced security standards implemented in all the companies I visited in Germany. The word security refers to the condition of a closed system (like a warehouse) being protected from intentional intrusion and harm from the outside. But what if the harm does not come from the outside?

Article: Prevent Theft in your Warehouse (Inspired by Amazon News)

The Article: “Prevent Theft in your Warehouse” offers small insights about two contract delivery drivers working for Amazon, who routinely stole goods from their employer for at least 6 years. The two drivers, who also happen to be roommates, later sold the stolen goods to two frauded pawn shops and received $4 Million from them. The pawn shops actually sold the goods again on Amazon, as third party sellers and generated over $10 million. Full information about the Amazon theft ring can be obtained here.

In industrial security there is a 10 / 80 / 10 rule, which implies that 10% of your employees will never steal from you, 80% can be motivated to steal or not to steal and the remaining 10% will steal whenever they can. It is important to focus on the 80% and motivate them not to steal by reducing the opportunities and therefore the temptation on one hand and making sure the employee feels appreciated both personally and financially on the other hand. If you are looking for in-depth information about industrial & warehouse security I recommend this paper from Cisco-Eagle.