The COVID-19 crisis has exposed a lack of resilience in organizations and societies — and, more specifically, in global supply chains.
Supply-chain resilience can be addressed in three main areas: critical phases, attributes and categories.
The three critical phases for an organization facing a pandemic-like event are surviving the event, recovering from it and rebuilding when it’s over.
The attributes of supply-chain resilience describe an organization’s ability to withstand the event in terms of projected survival time. That is, how long can it survive as the event plays out? What does it need to know to be able to increase its survival time? And once it has survived the event, how long does it need to recover to a defined “normal” state, which might be quite different from its pre-event state?
Resilience categories can be described as “the 3Cs”: capacity, capability and competency.
Capacity covers key elements relating to survival time, including:
Identifying these measures will require significant work. I recommend developing and tools or systems to aid in the measurements. For example, to determine inventory positions and multi-site capacity for a global company, one should not only have near-real-time visibility of inventory at multiple n-tier suppliers, but alternative supplier sources as well, falling outside the current supplier base.
Capability covers the ability to assess damage to the organization from the crisis. Key elements are:
The capabilities discussed above should be based on a strategic plan for the organization and its supply chain. Mapping, supplier alliances and digitization require strategic planning, funding and prioritization.
Competency is the state of possessing adequate knowledge and skill to continue operating. Key elements are:
In summary, building a resilient supply chain should focus on three phases: survive, recover, rebuild. Capacity, capability and competency building are crucial to successfully emerging from each phase. The build-out of the 3Cs for the supply chain must be a corporate strategy with appropriate levels of planning, prioritization and funding. If we learn anything from the current COVID-19 impact on supply chains, it will be to aggressively focus on resilience.
Shubho Chatterjee is a digital transformation, strategy, technology and operations executive.
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