The notion of organizational resilience is not new: the ability of an organization to successfully confront the unforeseen has always been a core element of success. But because the numbers and types of threats that can undermine a supply chain are now greater than ever, resilience has taken on even more significance in supply chain management. Supply chain resilience no longer implies merely the ability to manage risk. It now assumes that the ability to manage risk means being better positioned than competitors to deal with—and even gain advantage from—disruptions.
Let’s define what we mean by resilience. Resilience is the ability of a business to recover from or adjust to misfortune or change. It represents the ability to “bounce back” from an adverse event. Resilience is a function of how well an enterprise prevents, mitigates, and/or recovers from disruptions of any type.
How big is this topic today? ASCM, which is one of the largest professional supply chain organizations in the world, recently commissioned a group to identify what it thought were the top supply chain trends for 2021. At the top of the list was the need to focus on resilience as a major component of risk management and prevention. The analysis concluded that supply chains are complex, global, and increasingly interconnected. When one part of the network is exposed to risk, all are vulnerable to disruption. Focusing on supply chain resilience in conjunction with risk prevention will enable companies to mitigate adverse events faster, take market share, and outperform competitors.
Resilience has become a critical factor for success in risk management. Shifts in demand, supplier disruptions, and logistical headaches have made this clear to almost every company operating during the pandemic. Companies achieve resilience through a deliberate, planned, and comprehensive shift from being reactive to being anticipatory with plans to address risk events. This is a continuation of a shift in perception of the supply chain from a cost center to becoming a distinct element of competitive advantage that improves operating margins while protecting customer intimacy and satisfaction.
The path towards resiliency starts with an honest look at where your organization is currently, the willingness to assume uncertainty, and the ability to scan the environment for evidence of possible changes to the status quo. The COVID-19 pandemic has exposed the fragility of existing supply chains as companies spent the last three decades developing supply chains driven by efficiency rather than agility and resiliency.
Statistics from major insurance organizations reveal that about a quarter of all businesses affected by catastrophic weather risk events never recover. If we apply this figure during this pandemic across the globe, the impact will be staggering. Going forward, lessons learned in 2020 have demonstrated that in order to survive and thrive in a world that features volatility, uncertainty, complexity, and ambiguity, supply chains will have to be resilient and designed with risk in mind.
This content is part of the Executive Education Certificate Program, Supply Chain Risk and Resilience, presented by Lehigh University. Bob Trent and Greg Schlegel, the instructors, have developed several diagnostic tools for participants of the course to use back on the job. Examples of three such tools include a predictive bankruptcy indicator that reveals when suppliers or customers are in financial distress; a portfolio matrix tool for mapping and evaluating specific risks; and a tool used to assess the maturity of participants' enterprises in terms of risk management. The best way to deal with supply chain risk and disruptions is to avoid them whenever possible. And, if risks do occur, this program will help participants understand how to mitigate and manage those risks.
There are seats available for this online course, but the course starts February 18. For more information on the course please complete the form below or click here.
As part of the Supply Chain Risk and Resilience program, we are offering firms who send a group of five or more participants a unique opportunity. The faculty members who designed and conduct this program have developed a robust, online diagnostic tool that graphically profiles your organizational risk appetite, your developmental stage on a “Supply Chain Risk & Resiliency” maturity scale, and your operational propensity index, or “Cultural Kite,” that provides guideposts to develop and drive a truly resilient supply chain process and organization.
Firms who send five or more participants to this course will be able to complete the diagnostic, receive a report on their organizational effectiveness that provides concrete steps with a 90-day action plan, and five one-hour check-in calls at distinct phases of the implementation plan. All information is confidential and secure in our Learning Management System. Act now, before this offer is full.