The role of resiliency in managing supply chains disruptions

Abstract

Current day business organizations, symbolized by complex and global supply chains, are often subjected to unforeseen threats that result in huge financial losses. There are no sure ways of assessing these threats, especially the "black swans" (high-impact, but low-probability events like natural disasters, terrorist attacks, outbreaks, etc.), as the severe dearth of historical data excludes the use of forecasting tools to evaluate those disruptions. However, it has been observed that some organizations cope far better than others in addressing these unforeseen and unquantifiable disruptions. This is not because they have a 'secret formula', but due to them sharing a critical trait known as resilience. The notion of supply chain resiliency, which is the ability of a supply chain to recover to the 'pre-disruption' or a better state after suffering through a disruption process, has always been considered as a core element in the success of an organization. The primary objective of this chapter is to familiarize the readers with the concept of supply chain resiliency and its role in mitigating supply chain disruptions. The chapter will also reveal the advantages of a resilient supply chain through insightful examples from a wide range of industries.