Untamed Economy Impending Collapse - Research Paper Example

? Case Interpretation Paper Introduction The world is changing day by day predominantly due to the reasons like frequent change in climate, scar of resources, rapidly increasing population and increasing demand. It strongly affects the life of an individual, which also creates an impact over the business world. With this concern, The Deutsche Post also known as DHL has introduced five possible scenarios of the environment for the year 2050. It includes Untamed Economy – Impending Collapse, Mega-Efficiency in Megacities, Customized Lifestyles, Paralyzing Protectionism and Global Resilience – Local Adaption. These scenarios provide a basic idea about the challenges which might be faced by the business environment in order to survive in the marketplace in the year 2050 (Deutsche Post AG, 2012). Among these case scenarios, this paper aims to evaluate the state of affairs presented in the first scenario, titled as Untamed Economy – Impending Collapse. Furthermore, the paper will assess the challenges which might be faced by the logistic industry due to the most probable challenges in the business environment of 2050. It will also intend to identify the reasons and/or causing factors of these challenges. Case Scenario: Untamed Economy – Impending Collapse The entire world is distinguished with the assistance of unrestricted materialism and consumption. In addition, the rapid growth of international trade set the pace of business and economy all across the world. The advanced global transportation also ensures the frequent exchange of goods and services all across the international territories and/or boundaries. With this concern, it has been observed that the world economy is forced by unsustainable standard of living along with the uncontrolled exploration of natural resources which in turn creates a string negative impact over the stability of business environment. One of the significant causes behind these probable consequences by 2050 can be regarded as massive climate change on earth. It is often due to the occurrence of natural disasters that in turn interrupts the supply chains within the international territories at frequent intervals (Deutsche Post AG, 2012). With due consideration to the progress of logistic industry, the growth and development which is expected in the year 2050 can lead to increase in the demand of logistics and transport services. It is most likely to be disrupted by the frequent natural disasters which in turn can have strong influences on the global supply chain increasing capital costs in terms of logistic companies. Apart from this, the international trade is also quite likely to increase the demand of production processes by the companies in the global dais. Therefore, rising insufficiency of energy resources, higher energy prices and costlier raw materials shall lead to slackened profit margin in the industry sector. With this concern, operational managers of the global logistic industry should actively response to the disasters with the help of contingency planning (Operations Manager, 2012). It has further been observed that operational managers are mainly engaged with inventory management processes, shipping and receiving as well as hiring and training employees in the current day context. However, in such probable scenario of 2050, an operational manager shall need to focus on inventory management along with strong networking of supply chain according to the regional divergences in order to maintain the profit margin (Johnston & Clark, 2012). Challenges to be faced by the Logistic Industry in the Year 2050 In the year 2050, the logistic industry might have to face various challenges in terms of supply chain disruption, high energy prices, expensive raw materials and shrinking profit margins. In the upcoming eras, there are high chances for scarcity of resources due to the natural disasters and frequent climate changes which in turn shall create the nationalism and protectionist barriers across the international boundaries. Additionally, this might come up with the stagnation in technological development and economic instability. It also trims down the global trade volume that in turn leads with the lack of investment in infrastructure development and maintenance of international business. Furthermore, it often creates global conflicts over resource deposits as the price of energy rises as well as scarcity of resource increases (Deutsche Post AG, 2012). In the similar context, the logistic industry might face challenges that include regionalization of supply chains as the international trade declines. As a result, the regular transport distance shall be shortened which in turn might increase the importance of regional road and rail transports compared to the ocean freights (Johnston & Clark, 2012) Consequently, it might cause devaluation of logistic industry as the demand for elaborated and sophisticated logistic solution shall reduce due to the shorter and less complex regional supply chains (Plunkett, 2012). However, these difficulties might influence the industry to limit their profit margin to a large extent. In addition, it can lead to constant supply chain failures in terms of goods and services. Additionally, the increasing population can raise the demand of products and services to an unaffordable extent for the organizations to satisfy due to the scarcity of resources which in turn can again cause decline in the value of logistic industry (Deutsche Post AG, 2012). Reasons for the Challenges In the world of 2050, the challenge which logistic industry has high probability to face might basically be influenced by their unplanned structure of operating activities. Notably, as the population increases in the upcoming decades, the demand shall also rise rapidly to a large extent causing challenges in satisfying the customers struggling with scarcity of resources. With this concern, a proper planning is needed in order to cope with the hastily rising demand. However, the planning of the operational activities can be observed to lack in a few of the areas including inventory management, proper supply chain process and strong networking among others which in turn can negatively affect the operational activities of logistic industry (Deutsche Post AG, 2012). Furthermore, the frequent change in climate shall increase the risk of natural disasters leading to the scarcity of resources. It creates nationalism and protectionist barriers across the international boundaries due to the threat of scarcity in relation to natural resources. This in turn intends to reverse the globalization process as the economic adversity is combined with ascend of nationalism and protectionist barriers. Consequently, it might cause devaluation of the global logistic industry as the demand for long distance transportation service shall reduce hampering the profitability ratio of the industry participants (Johnston & Clark, 2012). With due consideration to this, it can be stated that these challenges are uncontrollable as it cannot be forecasted with accuracy in advance. Only to a certain extent it can be controllable; however, it cannot be medicated completely. Conversely, the logistic industry must intend to mitigate the risk instead of changing its operational activities in terms of dealing with these causes. Therefore, according to the trend the logistic industry should prepare a contingency plan in order to cope up with these most probable fluctuating circumstances (Plunkett, 2012). Conclusion The above paper intends to provide a direction towards the changing scenario of logistic industry in the year 2050 due to the change in climate as well as rapid increase in the world population which in turn increases the threat of natural disasters in the environment. With this concern, it has been observed that logistic industry might be strongly influenced by the variety of factors that includes poor supply chain management, scarcity of resources, and high energy prices among others that in turn is most likely to create negative impacts on the overall industrial profit margin. The growing population can also cause risk in terms of rapid increase of demand. However, the decision regarding international trade barriers due to scarcity of resources can devaluate the importance of logistic industry across the international territories and/or boundaries to a large extent. Therefore, in order to survive in the marketplace the logistic industry should be concerned about its planning which includes inventory management, proper supply chain process as well as effective networking system among others. Conclusively, it can be stated that organization should reassess its present status and strategies in order to face the future probable challenges efficiently. References Deutsche Post AG. (2012). Untamed Economy – Impending Collapse. Retrieved from http://www.dp-dhl.com/content/dam/logistik_populaer/Studie2050/fact-sheets-szenarien-1-5-en.pdf Johnston, R. & Clark, G. (2012). Service operations management: improving service delivery. USA: Financial Times/Prentice Hall. Operations Manager. (2012). Operations manager job description: daily tasks, roles, duties and responsibilities. Retrieved from http://www.operationsmanager.com/operations-manager-roles-in-the-company/jobs-roles-duties-and-responsibilities/ Plunkett, J.W. (2012). Plunkett's transportation, supply chain and logistics industry almanac 2007 (e-book): transportation, supply chain and logistics industry market research, statistics, trends and leading companies. US: Plunkett Research, Ltd. Bibliography Lewis, M. & Slack, N. (2003). Operations management: critical perspectives on business and management. UK: Routledge. Riverside Community College District. (1998). Careers in logistics. Retrieved from http://academic.rcc.edu/logisticsmanagement/PDF/Careers%20In%20Logistics%20by%20CSCMP.pdf Stanley St Labs. (2010). Logistics Industry Trends. Retrieved from http://www.economywatch.com/world-industries/logistics/trends.html Read More