Accenture, in collaboration with Oxford Economics, has devised a model for extreme scenario planning. This model outlines scenarios in five key areas: climate concessions, global trade flows, access to resources, technology adoption, and the industrial workforce. For each category, both progressive and regressive extremes are envisioned for the year 2040. For instance, in global trade, the model considers both a liberal, unified market with minimal restrictions and decoupled markets hindered by increasing protectionism.
The Benefits of Preparing for Extremes
The underlying premise of this approach is that if companies are prepared for extremes, they are prepared for anything in between. This long-term view extends beyond the typical five- to seven-year economic cycles experienced by industrial goods producers. By considering opposite scenarios, companies can acquire the flexibility to scale operations in line with actual events.
Key Initiatives for Business Leaders
The model is designed to equip business leaders with the ability to undertake several key initiatives. These include identifying immediate actions to enhance long-term resilience, assessing the effectiveness of current operating practices, evaluating the business’s IT architecture in a time of rapid digital transformation, and enabling contingency planning to respond to extreme developments.
The Need for Flexibility and Adaptability
Despite the benefits of scenario planning, it cannot account for every eventuality. Recent crises, such as the COVID-19 pandemic, have shown that there will always be unexpected events that disrupt industries and supply chains. Therefore, in addition to devising and preparing for long-term scenarios, planners must remain flexible to respond to unforeseen surprises.
While the model itself may require adjustments in response to actual events, Accenture remains committed to the basic concept: to be ready for the future, businesses need to think in terms of extremes. This approach to planning can help supply chain leaders prepare for a wide range of potential scenarios, enhancing their ability to respond effectively to future challenges.
