Interview with Jason Schenker, author of the book “Futureproof Supply Chain”

Jason Schenker has been ranked a top forecaster of crude oil prices, industrial metals, foreign exchange rates, and economic indicators by Bloomberg News. As the President of Prestige Economics, Jason is one of a handful economists that advises industrial companies and firms with significant exposures to commodities and the global supply chain. Jason is also the Chairman of The Futurist Institute, which helps train executives, analysts, and professionals to become certified futurists. Jason often speaks on commodity market, economic, and futurist topics, and he spoke as part of the World Rubber Summit at the Singapore Exchange in March 2017. Jason has frequently appeared on Bloomberg Television and CNBC. He is the author of nine books, including Commodity Prices 101 and The Promise of Blockchain.

IRSG: Your book just came out titled Futureproof Supply Chain: Planning for Disruption Risks and Opportunities in the Lifeline of the Global Economy. What is it about?

Jason Schenker: It’s a book about the rise of supply chain as an important part of the economy and the importance of technology for supply chain. The book also highlights over a dozen different disruptive factors for the supply chain in the coming decade.

IRSG: Why is technology so important for supply chain?

Jason Schenker: Supply chain has been at the vanguard of technology adoption, because e-commerce demands have put intense pressure on the global supply chain. Instantaneous demand and single-piece batching of goods driven by in-hand retail have made it critical for companies producing and delivering goods to be able to ship goods at an ever-increasing pace and volume.

IRSG: So where do you see the disruptions ahead for the global supply chain?

Jason Schenker: I think we are going to see some major disruptions ahead from big data, the internet of things, and computational power, as well as from last mile solutions, geopolitical risks, and economic risks.

IRSG: Which of these dynamics do you think could be the most important dynamic that people are not thinking about?

Jason Schenker: I think people know about coming automation and the prospects for quantum computing — and their future potential impacts on business, especially supply chain. But while automation and quantum are more flashy technology topics, the significant potential for some technologies, like IoT, are often overlooked. IoT — the internet of things — is an emerging technology trend, whereby devices and “things” are connected to the internet. Right now, we have the internet of phones, tablets, and computers. But in the next decade, I expect we will see an unfathomable number of diverse devices connected directly to the internet. This could impact global, national, and regional supply chains, because people may no longer be the only end consumers. And eventually the demand of devices could exceed human demand for personal or business goods. When this happens, people may no longer be an active part of the decision-making process in the supply chain.

IRSG: What potential disruptions do you think would be most critical for the rubber industry?

Jason Schenker: Although a big focus of Futureproof Supply Chain is about technology, there are other critical risks that I discuss in some detail. Those other risks are bigger for rubber and I think some of the biggest disruptive risks for the rubber industry could be tied to economic risks, geopolitical risks, and trade. Anything that could disrupt global flows of goods or global growth dynamics would be critical for rubber markets. After all, rubber is a critical input to the global economy, and it is dependent on the easy flow of goods through the global supply chain.

IRSG: What do emerging technologies mean for the rubber industry?

Jason Schenker: For natural rubber, the biggest supply chain dynamics that could be important are likely to be linked to the increased and significant rise of e-commerce on a global scale. As e-commerce demands rise, global miles driven are likely to increase significantly, which could increase natural rubber tire demand — and prices — on trend. Additionally, an increase in miles driven also presents upside demand risks for oil, which could thereby present upside risks to synthetic rubber demand and prices. Anything that presents significant upside risks to oil prices and synthetic rubber prices could also present upside risks to natural rubber prices.

IRSG: What other important technology dynamics could be critical for rubber demand and uses?

Jason Schenker: If we were to see a major shift toward electric vehicles, demand for some natural rubber automotive parts could fall significantly. But electric vehicles may see a relatively slow pace of adoption, due to physical limits on global supplies of cobalt and lithium. Furthermore, even if electric vehicle use were to expand rapidly, tire demand could also rise sharply — especially if automated fleet vehicles come into broader use and this results in significantly higher numbers of global miles driven.

IRSG: Are there any other big takeaways you would like to share?

Jason Schenker: It is important to know that there is a lot of pressure on supply chains. And this pressure — the need to do things faster, better, cheaper, and more competitively — will only increase in coming years. This will necessitate and keep supply chain at the vanguard of technological adoption in the coming decade.

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