How to face the future? : A model for scenario planning at VLC

Abstract: In this report a model for logistics activities at Volvo Logistics Corporation, VLC, in the future has been constructed. The study is part of a project called Vision 2015 & Beyond, which started in the beginning of 2006, and focuses on what changes in the business environment that VLC as a TPL provider faces in the future. Within the scope of this project threats in the business environment as well as internal issues that are considered as concerns for the future are identified. The already identified threats are complemented and investigated by the researchers and further structured into a model in this report. The model shall be used as a tool in scenario planning within VLC. As to guide the practitioners in using the model a manual which describes the construction of the model and how it is going to be used has been set up. The model is adapted to VLC's activities within the automotive industry and their directives have continuously been taken into account, resulting in a model specific for VLC. Theories in scenario planning and modelling has been revised as to construct the model, and as a result of this four types of components has been determined as to constituting in the model. Those components are; targets, scenario agenda, variables and driving forces. The process of identifying the different components was conducted step wisely, starting with the targets. The targets of the model represent what VLC want to focus on in the future, i.e. what is considered as important performance indicators. Transportation costs, Customer satisfaction, Security & Safety, Environment and Market Share have been chosen as the targets in the model. Next the components which VLC have a concern about, and that have an impact on those targets, are identified and decomposed starting with the areas on the scenario agenda and ending with determining the driving forces. The model is built in two dimensions, one external part that represents the business environment, i.e. what VLC can not affect, and the second, the internal part, which represents the organisation itself. Both parts are constructed out of the type of components mentioned earlier and are connected by the targets In each part of the model relations among the components exist, however it is only the most important out of VLC’s perspective that takes part in the final network in the model. The manual explains to the practitioner the concept behind the model and how it should be used. To verify the guidelines in the manual a mini-scenario was constructed. The mini-scenario is a fictitious case, which is thought to resemble those that VLC will use the model for in the future. In the mini-scenario presented in this report a future where the Kyoto Protocol implies transports are set up. The mini-scenario has an impact on a certain number of driving forces in the business environment, and by following the manual areas of recommendations for VLC's behaviour as to face this change will be generated. The result of the study is a kit consisting of a model and an accompanying manual for VLC to use in scenario planning. The researchers have focused on constructing a model that is easy to understand for those that work within VLC, however to be able to use it in a proper way it is necessary to be familiar with VLC’s logistic activities. It is preferable to work in teams when using the model since the model is based on qualitative reasoning. Limits in time and resources has left quantification out of the scope in this report, but the researchers believe that the model could be improved and extended in that direction if it is found desirable in the future. The model is not static, rather the framework that exist today should be complemented in the future when new concerns are discovered, old ones can be disregarded etcetera. The model offers VLC a structured methodology as to consider and respond to changes in the business environment.