Global Logistics Scenarios of 2025

- Strategic Planning for Logistics Service Providers -

@ EURAM 2006 Doctoral Colloquium
Oslo, Norway, May 16, 2006
Session chair: Erling S. Andersen
Lead discussant: Tor J. Larsen
Heiko von der Gracht
Supply Management Institute SMI

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Contents.
Key Problem of Dissertation
Relevance of the Topic
Research Questions and Aim of the Dissertation
Contribution to Practice and Scientific World
Research Methodology




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Key Problem of Dissertation.
Predominant trends in the logistics service industry
Internationalization/ globalization
Increasing competition
Developments in information and communication technology
Increasing complexity in logistics transactions
Higher customer demands on quality and availability of the service
Faster changing business environments and demands (Uncertainty-factor)
The major worldwide trend towards outsourcing
Logistics service market is shifting from a demand-driven market to a supply-driven market
Logistics service providers are forced to continuously seek after ways to defend their market position resp. to
establish competitive advantages
R&D/ Innovation management attains more attention in recent times
Logistics management is seen as a strategic issue nowadays
Application of tools from strategic management becomes advisable
Scenario technique is of particular interest due to its numerous benefits
Sources: Christopher 2005; Ballou 2004; Coyle et al. 2003; Grant et al. 2006; Baumgarten et al. 2004.
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Relevance of the Topic [1/2] Futurology and in particular Scenario Planning
in Logistics have up to now not been sufficiently examined yet.

Long-range planning/ strategic planning: ~ 100
articles
Futurology: ~ 80 articles; 8 books
Scenario planning: ~ 160 articles; 20 books
Future: ~ 160 articles/ studies; 20 books
Logistics-oriented* (24)
Future of logistics (long-range):
7 articles; 1 internal paper; 1 presentation; 1 press-
release; 2 studies; 1 working paper, 1 conference
proceeding
Futurology/ scenario planning in logistics:
Application: 2 articles; 2 theses
Methodology: 2 theses; 3 articles
Mixed: 1 book; 1 thesis
Futures-oriented literature (total ~550)
*Only literature with holistical view on logistics/ supply chain management (literature on single logistics functions as e.g. mobility, transport etc. excluded)
The low quantity of literature sources underlines the research gap concerning the research field
The net content of information is even lower as five articles are spun off summaries of corresponding books
1/3 of these sources are in English, 2/3 are in German; the research gap concerning an international scope is
consequently even larger
There is no publication that examines the future of the logistics service industry from an holistical perspective by applying
the scenario technique
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Relevance of the Topic [2/2] Scenario Planning and Logistics Practice, up to
now a rare Combination.
Up to now we have had only few scenario projects in the service industry. The major part of the projects is in cooperation with
manufacturing industries. Concerning logistics service providers, we have only conducted a few workshops on creativity.
(M. Schwarz-Geschka, Geschka & Partner Unternehmensberatung, Co-owner/ Partner)
The scenario-technique is still no standard tool of strategic planning, but I think that the application of the technique will
significantly increase during the next 5-10 years.
We have had only few projects in the logistics branch. The reason can be twofold: Either we have had simply no access to this
branch or the logistics branch did not feel the need for scenario planning up to now .
The ideal scenario user is a company that is on the peak of economic success. In practice, most companies seek though for
scenario consulting, if problems occur. I could imagine that the logistics branch does not face enough pressure at the moment for
thinking of scenario planning as a supporting management tool.
From my point of view, scenario planning is a concern of growing relevance for logistics service providers.
(M. Avenarius, ScMI, Senior Consultant)
The tougher the competition, the more are companies forced to actively conduct trend and futures research.
The potential of trend and futures research for service providers is presently very high, because R&D is up to now a rare
concern in the service industry.
(A. Steinle, Zukunftsinstitut, Trend researcher and futurologist)
Sources: Own research 2006.
Supply Management Institute SMI

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Research Questions and Aim of the Dissertation.
How could alternative futures of the global logistics world in 2025 look like? What are the
relevant influence factors for logistics service providers?
How do possible future projections look like and what do they mean for logistics service
providers?
How does the customer of the future look like?
How does the logistics service provider of the future look like?


The aim of the dissertation is to develop global logistics scenarios of 2025 that logistics
service providers can apply in order to derive alternative logistics strategies so that they
can increase flexibility, improve reaction rate on changing environments and consequently
establish competitive advantages.
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Contribution of Dissertation to Practice and Scientific World.
An extensive literature review on futures research, scenario management, systems thinking
and trends in logistics is conducted
A status-quo of the logistics service world in 2006 is given
Scenario management is applied in order to develop alternative scenarios of the global
logistics world in 2025. In addition, a guideline on how to use the scenarios is provided.
Target groups are logistics managers and futures interests alike
Logistics managers can use the scenarios as a fundament to think about the future of logistics
on their own. They can transfer the scenario elements on strategic decision processes and
develop own corporate strategies.
Scenario applicants can customise the branch specific concepts for the own logistics company
The results can serve as a basis for broader discussion within management teams
If the readership does not agree with the scenarios or parts of them the theoretical chapters
could at least be taken as a manual to develop own scenarios
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Research Methodology The Scenario Management Approach.
Source: Heinz Nixdorf Institute. Fachbereich Rechnerintegrierte Produktion, 2006.
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Empirical Research during the Scenario Management Process.
Environment of industry
Global environment
Survey on how the branch environment may
develop (markets, substitutes, complements,
etc.)
Approx. 100 logistics chairs in Germany
Contact by email/ telephone
Sample = census
Open questions
Questions dependent on chairs competence
Questions ask for alternative projections
concerning the specific key factor(s)
Survey on how the global environment may
develop (politics, economics, society,
technology, environment)
Sample frame = The Futurist Directory
1,400 Futurists listed, indexed by subject
Contact by email
Sample = dependent on key factors
Open questions
Questions dependent on futurists competence
Questions ask for alternative projections
concerning the specific key factor(s)
Decision field = German logistics service
industry
Examination of Top50 German logistics service
providers (by turnover)
Deduction of hypotheses from literature
Survey on strategic/ scenario planning
(Application, methodology, tools, development,
preferences, benefits, etc.)
Semi-structured questionnaire
Contact by email/ telephone
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Thank you very much for your
attention and support!
Back-up Slides
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Classification of Scenario Project.
Phase Dimensions Characteristic
C Problem statement Problem of orientation (global/ branch-specific)
C Controllability Systems scenario (partially influenceable)
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C Form of organisation External (scientific approach)
C Temporal condition Situational scenarios (static)
C Point of origin Explorative (what-if-scenarios)
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Goal-orientation Descriptive (causal relationship)
C Probabilities of occurrence Projections (no probabilities assigned)
Textual orientation Extreme scenarios (+ expected scenarios)
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Planning interval Long-range (>5 years)

The decision field is the branch logistics service industry
The scenarios are developed for the determination of fundamental decision behaviour
Both external (e.g. competition, environment, politics) and internal (e.g. Human resource management/ employee training and
qualification) key factors are used
Alternative futures are presented as a snapshot in time (situational), instead of a future history (process-related)
Based on the current status-quo of the branch, What-if-scenarios are developed
The scenarios are based on causal relationships without any evaluation
Best and worst case scenarios at the extreme ends of the spectrum of possible outcomes are developed
Within scenario-transfer expected scenarios are developed based on expert interviews/ workshops per mode of transport

In order to make general decisions about future-robust global strategies C for the
decision field Logistics service industry, externally developed C, partially
influenceable systems scenarios C shall be deployed. [Scenario-Project]
For this reason explorative C and descriptive situational scenarios C will be
developed. [Scenario-Creation]
These are based on both long-range extreme scenarios without any assigned
probabilities of occurrence C and Expected Scenarios originating from expert
interviews. [Scenario-Prognostic]

Gausemeier et al. 1996.
Supply Management Institute SMI

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References.
Ballou, Ronald H. 2004: Business Logistics/ Supply Chain Management. Planning, Organizing, and Controlling
the Supply Chain. 5th ed. Pearson Prentice Hall, New Jersey.
Baumgarten, Helmut; Darkow, Inga-Lena and Zadek, Hartmut 2004: Strategien fr Logistik-Dienstleister. In:
Steuerung und Services in der Supply Chain. Logistik-Dienstleister managen globale Netzwerke Best
Practices. Baumgarten, H.; Darkow, I. L. and Zadek, H. (Eds.). Springer, Berlin et al., pp. 167-177.
Christopher, Martin 2005: Logistics and Supply Chain Management. Creating Value-Adding Networks. 3rd ed. FT
Prentice Hall, Harlow et al.
Coyle, John J.; Bardi, Edward J. and Langley Jr., C. John 2003: The Management of Business Logistics. A Supply
Chain Perspective. 7th ed. South-Western, Mason.
Grant, David B.; Lambert, Douglas M.; Stock, James R. and Ellram, Lisa M. 2006: Fundamentals of Logistics
Management. European edition, McGraw-Hill, London et al.
Heinz Nixdorf Institute. Fachbereich Rechnerintegrierte Produktion, 2006. URL: http://wwwhni.upb.de/en/