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The Future of the Supply Chain 2020+

Summary / Introduction

Summary / Introduction Summary This study is based on four central scenarios for the „Future of the Supply Chain 2020+“. They were developed pursuant to the dimensions of „Degree of Integration of the Supply Chain“ and „Regional Scope“. These scenarios thus cover: •• Hohe Integrationstiefe und regionale Ausrichtung •• High degree of integration and regional focus •• High degree of integration and global focus •• Low degree of integration and regional focus •• Low degree of integration and global focus The analysis of the scenarios results in both scenario-specific and generally applicable recommendations on courses of action, especially in regard to the supply chain strategy, which is naturally of utmost importance. They concern innovation capacity, HR management and information security: these three aspects will require even greater attention in the future and how they are handled will determine the extent of a company‘s success. Companies need to make themselves aware of their importance today, since the gap between globalization/regionalization and higher/lower degrees of integration will only continue to widen in the years to come. Only companies with a clear focus in these areas and who act accordingly will be able to use these developments to their advantage and survive the competition of the future. Introduction There is no way around it: the competence profiles in supply chain management are changing. The demands on managers and employees are already increasing exponentially. In the years to come, supply chain managers will have to deal with more and more strategic questions and master strategic challenges. In four words: they need future competence. Such competence barely exists in current day business. This has less to do with expertise and more to do with the lack of a well-formed awareness about the future: too often, everyday work continues to focus on operations over strategy. This worked out reasonably well in stationary and regional markets. However, in the turbulent and international markets of modern globalization, this type of „dictated by urgency“ constitutes a strategic downfall. This is exactly why the study at hand spans a horizon through 2020+, i.e. an event horizon that is relevant for strategically-minded managers. Comprehensive, full risk management plays a key role here. To ensure the targeted application thereof, clear compliance and risk management guidelines will be a critical success factor - especially given the complexity of managerial tasks. Due to its critical role in business, the supply chain strategy should be coordinated directly with the overall strategy of the company. Thus, it must be analyzed in regard to its alignment with the company strategy as well; any gaps or contradictions between the two must be immediately addressed and resolved. 6

Basis of the Study Justification of the Method Selection The uncertainty a decision-maker feels is determined by the degree of complexity and dynamics (Duncan, 1972). Both have increased over the years as a result of globalization, international division of work and technological advances in the field of supply chain management, and further escalation can be expected. New, innovative planning tools are necessary, as forecasts and projections are reaching their limits in turbulent environments. To meet the challenges of the future and to use them to one‘s own advantage, the challenges must be recognized and competently assessed in terms of the significance for the future. Those wishing to actively shape the future of their supply chain will need robust tools and methods. This also means: forecasting, i.e. the mere extrapolation of historic data has long ceased to suffice in the management of rapidly increasing complexity, especially in the field of supply chains. Today‘s planners and strategists can draw from a rich set of future tools in order to anticipate developments and trends and even to prepare for the future. All in all, there are approximately 30 tools available (Glenn & Gordan) that, based on their possible uses and scalability, could be considered powerful tools in scenario planning. They intentionally include uncertainty in the planning process, by acting not on the assumption of a single future, but on employing different „futures“. This expands the planning basis for decision-makers. Different approaches and schools of thought exist and, depending on the purpose and focus, allow users to develop either more quantitative or more qualitative scenarios (see Bradfield et al., 2005). Future competence is the keyword and future competence needs scenarios. That is why this study focuses on scenario methodology. Approaches and Methodology Qualitative, meaning narrative, scenarios were created for the study at hand using the scenario axes logic (van ’t Klooster & van Asselt, 2006). This method has proven to be especially valid in the business environment, since it develops scenarios using a systematic, transparent and practical approach. To show that certain aspects of the content are applicable even beyond the selected horizon, the horizon was defined as 2020+. In doing so, it enables a consideration of very long-term developments, as well as current events and trends that are relevant today. The scenarios and analyses in the study at hand are the result of numerous expert workshops and interviews. The specific process steps include: 1. Definition of scenario topics, from scope and scenario horizon 2. Identification and analysis of available future studies with a supply chain context 3. Identification of relevant drivers, trends and future factors 4. Selection of two drivers for the creation of the scenario axes 5. Definition of two extreme poles per axis 6. Definition of the scenario story dimensions and their content, enhanced by desk research 7. Formulation of a scenario title 8. Development of scenario paths 9. Development of strategic course of action options and analysis thereof for each scenario 7

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