How to identify the future trends in supply chain?

Filed in archive Research on October 3, 2008

One of the methods which is used to make a roadmap of possible dominant technologies and trends in innovation area is Scenario Planning. The method was originally invented by the oil company Shell (I believe around 30 years ago) and now is used extensively by innovation managers in global companies.

In the scenario planning process, companies try to identify the possible trends in the market and new product (e.g. Children are spending more time working and playing with PC), the impact of such trends (They do less physical exercise and become fat) and the associated opportunities (Gym market will be booming, there will be a need for healthy products & related medicines); the innovation and technology planners do this for various scenarios and then allocate new product budget based on the output of such exercise.

In the supply chain world, as the uncertainty is rising more than ever, a similar approach can be adopted for the long range planning of the value chain investments; that's basically what a group of researchers at MIT are doing: There is a new project going on at MIT with the theme of "Future Focused Supply Chains" which is using the same approach use by new product development experts in supply chain.

Their approach consists of three main steps:

1. Scenario Thinking: where they create various scenarios and simulate possible outcomes through scenario planning. The main output of this phase will be the identification of trends and market developments that the company should be monitoring.

2. Strategy Alignment: In this phase, the focus is on aligning the responses derived from the scenario thinking exercise with the company's strategic goals.

3. Implementation and Development: An at the end, Supply Chain Managers look at the nuts and bolts of implementing the strategies they have decided to follow as a result of the previous two steps.

The important consideration which is derived from new initiatives like this one is that supply chain professionals have to change the way they approach uncertainty. No company can be in complete control of its commercial destiny, but with a future-focused mindset that can become more adept at navigating change.