A is for Agility in today’s VUCA world

Consumer demand


D'turn 13Jul12.pngPity the poor purchasing manager, who:

• Must keep inventories low as end-user demand remains slow, and the CFO remains very worried about the working capital risk
• Must keep inventories high, to minimise the risk of running short if supply problems develop and prices jump

Benzene (green line), as always, is the great example of what can happen. As the chart shows, prices began to fall in early March, as oil prices fell. But May’s plant problems pushed them back up. Since then they have been down again, then up, then down. And then up again.

These moves are not being driven by a recovery in demand. This, from all accounts, remains as weak as ever. They are supply-driven, where any problems are magnified in a thin market. Thus prices have risen 16% over the past 2 weeks, having previously fallen 11% in 3 weeks.

This is a good example of the VUCA world in which we now live. Volatility, Uncertainty, Complexity and Ambiguity dominate.

The only solution is for companies to develop their own VUCA in response – Vision, strategic Understanding, Clarity over implementation plans. And, especially if you are a purchasing manager, Agility in response to unforeseeable events.

Benchmark price movements since the IeC Downturn Monitor’s 29 April 2011 launch, with latest ICIS pricing comments, are below:

HDPE USA export (purple), down 28%. “Producers were making few offers and seeking a higher price for any material they were offering”
PTA China (red), down 26%. “Polyester makers offered price discounts during the week to encourage sales”
Naphtha Europe (brown), down 25%. “Market lengthened this week as a result of imports from other regions boosting stocks, and demand from the gasoline sector declining.”
Brent crude oil (blue), down 20%
S&P 500 Index (pink), down 1%
Benzene NWE (green), up 8%. “Ongoing tightness for July, gains on crude futures, as well as firmer prices in Asia and the US, have all helped put more upward pressure on the European benzene market “


Force majeures decline as operating rates slow


The good news is that the blog’s 6 monthly review of force majeures shows ...

Learn more

China's leaders mark time till power handover


How many more empty cities like Ordos does China really need? Are 64.5m empty ap...

Learn more
More posts
Plastics producers face a ‘wake-up call’ from both ends of the value chain

Plastics producers have had a great run over the past 60 years, as demand took off for their product...

Smartphone sales confirm mid-market of ‘affordable luxury’ is disappearing

Another 3 months, another decline in global smartphone sales. And more pressure on mid-market player...

Welcome to the New Normal – a look ahead to 2030

10 years ago, I took a look ahead at what we could expect in the next decade, as discussed last week...

If you don’t want to know the future, look away now

Next week, I will publish my annual Budget Outlook, covering the 2021-2023 period. It will highlight...

The Top 5 pandemic paradigm shifts

The Covid-19 pandemic has accelerated the fundamental changes which were already underway in global ...

Hertz goes bankrupt as non-essential consumer demand disappears

The US Federal Reserve has now spent $7tn bailing out Wall Street. But it couldn’t save the 10...

Smartphone sales head into decline as affordability becomes key

The smartphone sales decline accelerated in Q1, as Strategy Analytics report: “Global smartpho...

China’s plastic ban and recycling launch marks end of ‘business as usual’ for plastics industry

Paradigm shifts start slowly at first, and it is easy to miss them. But then one day, they suddenly ...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more