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Scenario planlegging
Andr Kroneberg
MARINTEK

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Agenda

Teori/grunnlag
Pause
Praktisk oppgave
Case: WWL scenario prosess 2000

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Teori/grunnlag

Definisjon
Historikk
Metode/prosess
Fasilitatorens oppgaver
Oppgaver

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Scenarios - Definitions
Scenarios are structurally different stories about how the future
might develop

Scenario 1

Scenario 3

Today

Single-point forecast

Scenario 2

Scenario 4

The future

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Scenarios - Benefits (I)

New ways of thinking about and planning for the future
Removal of blinders
Exploration of new ideas and business opportunities

A testbed for evaluation of business goals and strategies

Identification of optimal and robust goals and strategies

A map of the future

A common mental framework for discussing future issues
Faster response to a changing business environment

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Scenarios - Benefits (II)

Scenarios aim to strech thinking about the future
and widen the range of alternatives considered
Michael Porter:
Competitive Advantage, 1985

To create the future, a company must first be

capable of imagining it
Gary Hamel and C.K. Prahalad:
Competing for the Future, 1994

Scenarios are the most powerful vehicles I know

for challenging our mental models about the
world,
and lifting the blinders that limit our creativity
and resourcefulness
Peter Schwartz:
The Art of the Long View, 1991

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Scenarios - History
2 WW: Scenarios used in military planning by the U.S. Air
force
60s: Herman Kahn develops comprehensive scenarios
concerning governmental and military issues
70s: SHELL implements scenario planning in their
organisation just in time to prepare for the emerging oil
crisis (73)
80s: Scenarios gain acceptance in Norway - Statoil
(E&D), Scenarier 2000 (Hydro, Aker, DnV, IBM)
90s: Increasing interest in scenario learning/planning.
Several comprehensive books on the topic are relased

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Companies using Scenarios today

Widely used in
the strategy
process
Also national
scenario
programmes UK Foresight,
Destino
Colombia etc.

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Companies using Scenarios:

Royal Dutch Shell
Have a look at
shell.com
Used scenarios
since early 70s
Building scenarios
is about widening
perspectives. Using
scenarios is about
widening options
Ged Davis, Shell

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Scenarios - Techniques
A broad spectrum of
various techniques for
developing scenarios exists
The SRI approach:
representative/recognised

Step 1

Strategic
Decisions

Step 2

Key Decision
Factors

Future forward

Step 4
Step 3

Scenario
1

Environmental
Forces

Scenario
Logics

Decision
Implications

Scenario
2
Scenarios

Scenario
Scenari
3
o3

Scenario
4

Step 5 Source: SRI Consulting

Step 6

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Introduction to Step 1:
The strategic decision
Internal logistics provider in Statoil: Business development
The role of our company in integrated supply chains: Strategies for
controlling the chains

Destino Colombia: National scenario project 1997-1999

Imagine which courses Colombia might follow over the next 16 years,
and the consequences of each

Elforsk, Sweden: Research programme

Provide basis for an R&D programme in the Swedish power industry

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Introduction to Step 2:
Key Decision Factors
Which factors would you rely on when choosing strategy?
Which factors are important when making the hard decision?
How can the strategic decision be de-composed into sub factors?

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Introduction to Step 3:
Environmental forces
Social
MACRO

Rules&
regulations

Media
Competitors
MICRO

Technology Suppliers

COMPANY

Ecology

Substitutes

Customers Politics

Economics
Demography

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Introduction to step 4:
Scenario logic
The scenario logic is defined as the organising principle of the key drivers
of change (i.e. in what way will the key drivers of change develop and
change the business environment)

+
2x2 Matrix:
Well structured
Easy to communicate

But can sometimes be too rigid?

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Introduction to step 4:
Scenario logic
Governmental initiatives:
Deregulation
Privatisation of Statoil

Intensity of operations in the North Sea:

Oil price
Field developments

Degree of uncertainty
Low
High

Significant

GLOBALISATION:
Globalisation offshore logistics
Industry structure
IT

Impact on
the strategic
focus / KDFs

Insignificant

Think strategic focus!

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Introduction to step 5:
Description of scenarios
A story line incorporating developments and
interactions in important external forces and key
decision factors. It is important that the story lines
are characterised by causal relations and internal
consistency with respect to the underlying logic
(refer step 4),
A table showing how the key parameters vary
across the scenarios,
Specific events, and
A creative name or heading

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Introduction to Step 6:
Develop strategy alternatives
What if we knew
this scenario
would occur?

Scenario D
Scenario C
Scenario B
Scenario A
What would be the threats and
opportunities?

What strategy and actions

would we implement?

What do we monitor for this

scenario?

SOURCE: SRIC

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The facilitator
A facilitator needs to be neutral, i.e. no opportunistic self-interest with
respect to the final outcome of the scenario process.
A facilitator needs to be a good listener. The facilitator should
primarily structure inputs from the scenario team rather than running
the show him/herself.
A facilitator needs to be analytic in order to structure the discussions in
an efficient manner.
A facilitator needs to understand the basics of scenario planning. It is
important to have an understanding of the concept of scenarios in
order to set the proper goals for the scenario process.
A facilitator needs to be able to motivate the participants.

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The scenario Team

A crossfunctional team

Neutral Facilitator
Technician

Generalist

Optimist
Male

Pessimist

Specialist

Economist

Female
Source: METIER SCANDINAVIA

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External participation

Broaden horizon
Removal of blinders
New perspectives
Complementary/in-depth knowledge
Experts, generalist, customers, suppliers,...

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Practical Exercise
Develop a scenario for the
entertainment industry in 2005
Remember:
Scenarios are radically different from the
situation today, but at the same time
plausible...
Describe scenario:
Name, bullet points, illustration

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MARINTEK - experience
MARINTEK - SRI Consulting (98): Innovation in
the container industry
MARINTEK - Norwegian Ministry of Petroleum
and Energy (98): Floating production and offshore
MARINTEK - Statoil DTJ (99): The role of DTJ
in integrated supply chains: Robust strategies
MARINTEK - Wallenius Wilhelmsen Lines (00):
Logistics management services required by new
and existing customers in the next five years

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Case: WWL scenario prosess 2000

Background
Goals
Process
Scenarios
Feedback/conclusions

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Background
Significant changes in the business
environment:
- Consolidation and globalisation
- Time-based competition
- Outsourcing of logistics
- Emerging system integrators
- Increased systems integration
- De-regulatory efforts
- Environmental concerns

Increased focus
on logistics need
to develop
logistics strategy
Scenario planning

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The logistics rationale (1)

Billion USD

The outsourcing market

600

In billions US$

550

According to Northeastern
University and Armstrong &
Associates, the outsourcing
market is growing nearly 20 %
annually
Logistics: Logistics is that
part of the supply chain
process that plans,
implements, and controls the
efficient, effective flow and
storage of goods, services,
and related information from
the point of origin to the point
of consumption in order to
meet customers' requirements

500
450
400
350
300
250
200
2000 2001 2002 2003 2004 2005

5 year
outsourcing
potential

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The logistics rationale (2)

Different customer philosophies with
respect to outsourcing of logistics
Movement towards more and more
outsourcing to systems integrators
Lou Sorchevich, Director of international
transportation, GM

Would like the carriers to provide more

value-added services, especially in
booking and control of various supply
chain activities like point to point services
and contracts where land side processes at
both origin and destination are managed by
the ocean carrier
Bob Frinier, Vice President, Logistics, Nissan

Do not know whether VWT is profitable

and feel it is probably irrelevant, since it is
viewed as a strategic investment by
senior management
Joe Manschke, Ken Fletcher, Chuck Domke,
Logistics, transport processes, VWT/VW

Our company intends to co-develop

global process systems with our partners
and integrate operations with a few of the
best providers in the logistics area
Bill Carrigan, Manager Global Marine
Transport, Ford

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Background
Input from GLM project: Step 2 and 3

The project will develop a global

logistics management strategy in
accordance with the vision and
goals of WWL

WWL vision:
Help our customers succeed through innovative
transportation and logistics solutions

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Goals
Explore the need for future logistics management services
Contribute in the strategy formulation process and in
establishing divisional and regional measures and targets
with respect to logistics management services
Develop a map of the future with respect to new logistics
management services
Input to Global Logistics Management project
Evaluate whether scenario planning should be used on a
regular basis by WWL in their strategic planning process

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Process
Core team:

Bengt Eurn, Senior Vice President, Operation, WWL

Steve Cadden, Senior Vice President, Global Logistics, WWL
Jan Walle, Senior Vice President, Business Services and Finance, WWL
Reidar Hauge, Senior Vice President, Information Systems, WWL
Anders Boman, Senior Vice President, Commercial, WWL
Bengt Ramberg, Vice President, Global Logistics, WWL
Fridtjof Nss, Vice President, Business Performance & Pricing, WWL
Jesper Olsson, Research and Development, WWL
Gudbrand Fltaker, Information Systems, WWL

Reidar Nilsen, Vice President, Research and Development, WWL

Andr Kroneberg, Torbjrn Landmark and Eivind Dale, MARINTEK

Four regional workshops in order to complement the findings of

the core team
Time horizon: December 1999 - May 2000

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Final scenarios

- Limited number of carriers

- Specialised tonnage
- Long term client relations Stable production patterns

- Postponement of production
- Reduction in ODT
- Customisation
- Time-based competition
- Limited number of carriers Long term client relations

- Erosion of conferences
- System integrators (UPS)
- Containerisation of cars
Stable production patterns

- Combination of:
The coca-cola race
- New
days same way

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Feedback/conclusion
The need for future logistics
management services was
explored by using the scenarios

Managers at different levels,

in different regions and with
different professional
backgrounds developed a
common understanding of
the forces driving the
business environment and the
need for logistics
management services

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Conclusions

WWL decided to
use scenario
planning on a
regular basis and
make the
scenarios a part
of the regular
strategy process
in the company