Addressing volatility, uncertainty, complexity and ambiguity (VUCA) through insourcing and backshoring

Abstract

The complexity of the global supply chain operations has not been more apparent than during the financial crisis of recent times. It led to raised awareness about the vulnerability of the complex operations that span over a number of continents. Trends in business indicate that there is a movement to restrain and even reverse outsourcing and backshoring to check volatility, uncertainty, complexity and ambiguity (VUCA) that characterize international business today. In this paper we discuss how business performance measures like cost, quality, customer satisfaction, security, access to market and innovation are affected by VUCA and how insourcing and backshoring have lately emerged on top as they lower the impact of VUCA on these business measures. The paper ends with a word of caution-the rapidly changing global business environment requires that the performance measures be monitored keeping the VUCA factors in mind as markers.