johannes WartH's Interview

johannes WartH, European Business School, Germany
Mini CV

Johannes Warth is a research assistant and postgraduate at the Supply Chain Management Institute at the EBS European Business School in Wiesbaden, Germany. The Institute was founded in 2004 and deals with diverse questions and challenges concerning supply management, logistics, corporate foresight and knowledge management. In his thesis he fo-cuses on strategic early warning systems in the automotive industry. In this context he is involved in several projects regarding the future of trans-port and mobility.

Interview result

Can you envision major wild cards (positive or negative) that may occur in the next 20 years?

I can consider two major wild cards that might have large impacts on the future of transport. These are "Slow Logistics" and "De- Globalization". I can imagine that there are increasing tendencies towards a turning back of current globalization patterns, particularly regarding global trade volumes. In this wild card scenario, a growing share of consumers will increasingly demand local goods and services, due to an increased awareness of sustainable production and logistics. Therefore, consumers are even willing to pay a higher price for regionally produced goods and services. At first sight this wild card does not appear to be wild at all, because one can already observe such tendencies today. But I think, that de-globalization
will lead to certain effects and dramatic changes that possess the characteristics of a wild card.
One of those changes might be "Slow Logistics". Today, services in logistics are strongly characterized by a high importance placed on the time aspect. Current economic processes demand "just- in-time" delivery of the right goods in the right place, both in business-to-consumer and business-to-business markets. Contrary to this concept, in slow logistics the relevance of time is strongly decreasing. For example: after having ordered a certain good, this good remains in the storage or warehouse until a certain amount of goods can be loaded onto a single truck. The idea is to avoid environmentally detrimental empty runs, as in fully loaded trucks, CO2-emissions per single good decrease. This concept is more likely in B2C-markets than in B2B-markets, as private consumers are willing to wait longer for a delivery, in order to reduce environmental costs caused by transportation.

What will be the dramatic impact of the wild cards you mentioned?

Business actors such as globally acting enterprises have to adjust their business in the wild card scenario "De-Globalization". In globally spread value chains, enterprises might have to reconsider their production locations, and ask themselves whether it was not more advantageous to produce in and for their own region. It might also have an important impact on advertizing campaigns. Enterprises might be increasingly forced to run marketing campaigns that highlight regional or national production and supply of goods
and services. An increased share of consumers might respond positively to marketing campaigns focusing on regional production which is regularly associated with social responsibility, e.g. through generating new jobs and reducing regional unemployment.
If such enterprises enjoy a high level of acceptance, this might have further dramatic impacts on direct competitors and branches as a whole. Besides the impacts on business mentioned above there might be positive impacts on the environment. If this wild card emerges, the global trade volume will decline and lead to less global traffic. This might lead to less environmental impacts through decreased amounts of worldwide transport. Nevertheless, this wild card does not only include positive impacts, as it might lead to a reduced variety of products and services offered in distinct regions, especially fresh food, such as fruits and vegetables.
Another field that might be affected is logistics and logistic services. Logistic providers would have to act in a completely different market environment. There would still be large and globally operating logistic providers, but the majority of providers would have to
focus on distinct regions and local supply networks, which are characterized by the usage of different kinds of transportation, due partly to the geographic characteristics of specific regions. The demand for logistical services within a region will increase, while the demand for logistical services between regions will decline. As in every business sector, such changes or developments in business environments involve both risks and opportunities. The latter is the case for small logistic providers focusing on specific niches.

Assuming that this wild card is considered as rather positive - how it should be addressed by future research? In which field?

I do not see an urgent need for research to be conducted in a certain scientific field. But national or regional governments have to give certain incentives to customers to foster the purchase of regionally produced goods and services. One cannot foster this acceptance just by introducing negatively afflicted regulations, such as high tolls on imports or even import bans - this would be the wrong way to increase acceptance of local products.
With regards to the wild card "Slow Logistics", there is still much research to be done in track and trace technologies, as customers would for example want to inform themselves about the current filling level of the truck delivering the ordered good.

What are the weak signals that could hint at a growing likelihood (or imminent realization) of the wild cards that you mentioned?

First, I can mention a weak signal regarding the wild card "Slow Logistics". Nowadays, it is becoming increasingly obvious that a growing number of people want to live more consciously, and want to take time for certain activities in their private life. This is partly due to the ever-increasing requirements for accuracy and work pace in all kinds of professions and other areas of daily life. These increased stress factors are also responsible for the continuously growing share of people having mental illness and heart attacks.
Concerning "De-Globalization", there already exist quite a few weak signals. These include TV marketing campaigns run by German manufacturers, such as Liqui Moly or Trigema, which highlight the regional production of their products. Another contributing signal might be the share of German small and medium-sized companies that relocated their production sites to China due to cost advantages. These companies are now discovering Germany as their main production location. Another fundamental signal that might indicate the prospective occurrence of this wild card is the fact
that there is a growing demand for mobility services. An increased share of people prefer to rent, rather than own, mobility devices, or are increasingly using public transport. This development shows the increased awareness of environmental problems and aspects of sustainability, particularly regarding the transport sector. I can also refer to certain critical tendencies in some European states, that might indicate a conscious shift towards their own region, e.g. recent election results in Poland or The Netherlands. However, although these signals might hint at the emergence of a wild card that is assumed to be positive, particularly regarding ecological aspects, these signals are rather classified as being negative.

If you mentioned more than one wild card or weak signal, can you identify any causal relationships between them?

Yes. I am convinced that the emergence of the wild card "De- Globalization" will contribute to the emergence of the Wild Card "Slow Logistics".
Thinking about the definition of wild cards and weak signals we used at the iKnow expert workshop in Cologne, do you prefer other definitions of wild cards and weak signals or do you agree with them?
I agree with the definitions we used in the workshop. There is rather a problem with the wild card methodology as a whole, particularly regarding its acceptance and its perception. Too many wild cards are generated from today's perspective and often do not correspond to the underlying features of a wild card, especially regarding their probability of occurrence.

What are the best methods to identify wild cards - weak signals?

We have had some good experiences with a specific method we usually apply at our institution to identify wild cards or extreme scenarios. We take two theses each, with two different characteristics, and project them on the x- and y-axis in a coordinate system. The four different combinations of theses and characteristics constitute different scenarios, ranging from a standard scenario to an extreme scenario with very low probability of occurrence.

Interviewer (Institution)

Z_punkt is a consulting firm focusing on strategic future issues. We are experts in Corporate Foresight, i.e. in translating trend and future research into the real world of strategic management. We have been supporting the business community with Foresight Research and Foresight Consulting Services since 1997.

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