Transport and logistics in a VUCAH world

We’re living in a VUCAH world, but what does this mean? CHARLES DEY explores the impacts of a volatile, uncertain, complex, ambiguous, and hyperconnected environment on skills needs, making recommendations about how transport and logistics companies can meet these needs. 

The modern world we live in is a volatile, uncertain, complex, ambiguous and hyperconnected (VUCAH) environment. We have only scratched the surface when it comes to the potential of technology and, as the cost of technology declines and access improves, more companies will embrace Industry 4.0 as they scramble to remain ahead of the game.

Wanted: new skills

From a skills development standpoint, the following points are the most notable:

• Automation of equipment and facilities: We will see ongoing reductions in human-operated machines and facilities, linked to a greater use of autonomous vehicles and freight handling equipment, dark warehouses, automated assembly lines, and the like.
• Digitisation of processes: All processes – from the moment an item is ordered until the final manufactured product is delivered – are connected via common internet platforms. These are used to manage not only internal functions but also the operations of external third party suppliers of good and services.
• Integration of functions: There is an increasing trend within companies towards breaking down the silos that traditionally separated departments. Focus is increasingly being placed solely on the common goal – customer satisfaction.
• Financial diversification: Specifically, the development and implementation of the use of blockchains and crypto currencies.
• Development of service industries: Finance and banking, insurance, supply chain management, tourism, and IT.
• E-commerce: Probably the biggest disrupter of consumer behaviour since WWII, e-commerce opens global markets for retailers of all sizes and others. This is leading to a rapid increase in small entrepreneurs and informal businesses, with many innovative ideas founded on new technologies.
• Fewer formal job openings: Slowdown of the global economy is leading to a reduction of job opportunities in the formal sector.
• Increased entrepreneurship: This is now being recognised as the greatest potential creator of jobs.
• Supply chain uncertainties: The Covid-19 pandemic and war in Ukraine have resulted in shortages and trends towards onshoring.

The transport and logistics industry, being dependent on the demands of others, will be impacted by each of these factors. For a transport and logistics organisation to succeed in such an environment requires people who are both super competent and super agile.

The new skills armoury

Like an army preparing for war, transport and logistics companies need the following strategic weapons in order to succeed in such a rapidly and radically changing environment:

• Weapons to determine what the company’s skills needs are in each functional area, both in the present and as these changes impact on the business.
• Weapons to objectively measure the skills the company possesses and which gaps need to be addressed in terms of both present and future transport and logistics fulfilment solutions.
• Weapons to address the skills gaps, which have been measured in a way that engages every individual involved in the process and that impart skills in a way that allows them to be applied with the least amount of pain.

This is a journey along exciting new pathways. It needs the adoption of innovative ways of thinking and the harnessing of a great many unique resources.

Strategy and the skills building journey

From a strategic point of view, a mark of the success of any transport and logistics company is their wholehearted acceptance of the strategic need to train employees in scarce and critical skills. These skills make companies unique from their competitors and make their respective products and services attractive to the market.

It is also true that these forms of training will, by their nature, never be reported in any public document. Further, the business case for alignment of such training with any national qualification structure or funding system is not strong.

This implies that the training being suggested here needs to be:

• Unique to either a single transport and logistics company or, at best, to a cooperation of such companies.
• Driven by objective, ongoing research and data.
• Capable of being delivered when and where required.
• Infinitely flexible both in terms of content and modes of delivery, assessment, and certification.

A roadmap for achieving these strategic goals will be discussed in future articles.

Interested in adding to the discussion around these ideas? Please join the debate on www.charlesrdey.blogspot.com.