Scenario planning can be used to manage the uncertainties and discontinuities of change in the future. Moreover, it helps anticipate hidden weaknesses and inflexibilities in organizations and methods. The process of scenario planning includes 1: Identify focal issue 2: Search for driving forces 3: Find uncertainties 4: Formulate scenario logic.
For a trading company, many things related to economic, financial and policy should be taken into consideration. I will give a case here.
With the advent of an order, there should be budget for the whole production state including the time needed for the production; the cost of the merchandise; the feasibility of the designated styles; whether those commodities can put on the shelves. As I remember once there was something unpredictable happened. The labor shortage was coming, so there were no workers for this order.
If the commodities were to be delayed, the company will pay for the penalty. Actually this is a particular case since there is never labor shortage throughout the previous years and to predict such situation is beyond our experience. This case was finally solved by negotiating with the buyer. As a result, we see the importance of scenario planning, as we are living in a changing word. There are also other examples. As a trading company, the currency should be emphasized. Then something related to the fixing the price can be done in advance.
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