Supply Chain Resilience
What you will learn from this lecture
1) Understand the Resilience concept in Supply
Chain
2) Discuss SC resilience strategies
3) Examine the case study of SC resilience
The concept of resilience
• Resilience is commonly used from an individual perspective
• Resilience is the ability to bounce back from a negative
experience or difficult challenge. ... Resilience is built by
having confidence that you'll be able to get through or work around
your problems, and by learning effective ways to cope with
negative thoughts and emotions (Everyday Health).
• Resilience allows you to face a problem or challenge, overcome it,
and get back to life a little bit stronger and a little bit wiser.
• It is about coping with adversity in ways that boost your own wellbeing and protects you from getting overwhelmed (Jed
Foundation).
In-class exercise
• Your friend, Chris, puts resilience as a personal strength in
his CV (i.e. resume) when he looks for a job
• He has been shortlisted for a job interview
• Chris is preparing for his job interview: if his potential employer
asks Chris to give an example to show his resilience, what
examples can you think of to help Chris?
• Tips – overcome obstacles/problems and become stronger
 Failed an exam but bounced back; Change of school; Physical
illness; change in family make-up; change of friendship groups;
lost a competition/election of students union role, etc.
What is SC Resilience?
• Resilience is multidimensional and multidisciplinary in nature.
• Ecological scientist Holling (1973) was one of the first researchers to introduce
the concept of resilience as the ability of systems to absorb changes and the
capacity of a system to get back to equilibrium state after disturbance.
• Carpenter et al. (2001) relate resilience as the capacity to prepare and adapt in
response to disturbances. With the passage of time, the notion of resilience has
been spanned over different fields.
• Supply chain resilience is the supply chain's ability to be prepared for
unexpected risk events, responding and recovering quickly to
potential disruptions to return to its original situation or grow by
moving to a new, more desirable state in order to increase customer service,
market share and financial performance (Ribeiro and Barbosa-Povoa, 2018).
• Supply chain resilience is about managing and adapting to the unknown
across the whole spectrum of risk from day-to-day operational risks
through to long-term planning.
• The COVID-19 pandemic exposed the fragility of many global supply chains,
particularly those that had been fine-tuned for efficiency and speed.
• It's a key reason why proactively managing risk and boosting resilience is now
top of the agenda across industries.
• The goal is to use digital connectivity and intelligent technologies to enhance
the supply chain's ability to adapt, respond and recover from whatever
unknowns arise.
• Companies with resilient supply chains are better able to manage
change to their supply chain and operations.
• They can flex and adapt quickly to evolving patterns of supply
and demand. They use advanced data science to predict disruption
and react with confidence, at speed.
• With enhanced risk sensing and management capabilities, their
supply chains are more secure, more transparent, more cost
efficient, and more attuned to the changing needs and values
of individual customers.
Why SC resilience matters?
• With the COVID-19 crisis, fundamental changes in consumer
behaviour, supply chains, and routes to market are knocking
companies off-balance.
• Responding to the pandemic has underscored the need for leaders
to accelerate the adoption of agile ways of working and value chain
transformation to help outmanoeuvre uncertainty.
• COVID-19 is not a typical risk event. The scale of its impact
eclipses anything most supply chain leaders will have seen before.
• The speed of the escalation requires continuous end-to-end
assessment, optimization and monitoring.
• Companies need to respond rapidly and confidently to shape
and execute a short-term tactical plan that will mitigate the risks
to human health and protect the functioning of global supply
chains.
• In doing so, strong data and analytics capabilities are crucial in
understanding complexity, anticipating potential disruption, and
quickly developing a response.
• Many challenges are facing SC from several directions and
leaders must respond with responsibility in addition to resilience.
Some of the challenges of global SC
• Supply chains lack global resilience and are breaking
down in the face of multi-country disruptions.
• Supply chain and operations are becoming more costly
(i.e. less global and ecommerce fulfilment costs) and can
often represent a company’s highest costs.
• The significant impacts that supply chains and operations
have on the planet and society are not meeting
stakeholders’ expectations for sustainability.
• Talent gaps across the supply chain and operations
continue to create high dependency on the human
workforce.
• A lack of flexibility inhibits the ability to address customer
demands for personalization and customization.
• IT systems continue to be expensive to run, inflexible and
often over-reliant on legacy technologies.
Readiness, Responsiveness, Recovery
SC resilience – risk management culture
• One of the most important aspects of supply chain resilience (SCRE) is to create
a risk management culture that supports an environment for initiating preemptive risk-reducing efforts.
• The primary focus of SCRM is the identification and mitigation of risks for
reducing supply chain vulnerability.
• Supply chain risk assessment is a formal part of the decision-making process at
every level as a route to develop risk management culture.
• Organisations need to establish supply chain continuity team, broad-level
responsibility and leadership, as well as factor risk consideration in
decision-making, to create a risk management culture, which is a
precondition to develop a resilient supply chain.
Resilience as a multidimensional concept
• In supply chain literature, conceptualization of SCRE can be explicated
from different perspectives.
• Some of the studies shed light on building resilience capabilities upfront
such as flexibility, visibility, redundancy, collaboration, disaster readiness,
financial strength, market capability, etc. (Jüttner and Maklan, 2011; Pettit
and resilience
et al., 2011; PalVulnerability
et al., 2014;
Erol et al., 2010).
• Whereas other studies focus on resilience capabilities after the fact such
as recovery time, cost and response effort (Sheffi and Rice, 2005;
Christopher and Peck, 2004; Falasca et al., 2008; Martin, 2004).
• These two notions of resilience capabilities are also interchangeably
defined as pre-disruption resilient actions and post disruption resilient
actions (Rose, 2004).
• SCRE is the capability of a supply chain to prevent disruptions and to
reduce the impact of disruptions through developing required level of
readiness, quick response and recovery ability.
• SCRE is defined as the suitability of a supply chain to anticipate or
respond to disruptive conditions to make an efficient and timely
recovery and hence progress to the post-disruption state, preferably in
better shape than before the disintegration (Tukamuhabwa et al.,
2015).
• It implies avoiding identifiable risks in the face of disruptive
occurrences such as natural disasters, unnatural disasters, political and
economic crises (Aslam et al., 2020).
• Piprani et al. (2020) emphasised that companies can quickly develop,
adapt, and respond swiftly to unforeseen events to address supply
chain vulnerabilities using supply chain resilience. It also helps to take
rapid steps to cope with such interruptions.
• Piprani et al. (2020) stressed that SCRE allows enterprises to react swiftly, reconfigure, and operate their available resources and capabilities in unforeseen
ways.
• Supply chain resilience assesses resilience at the three R's phases/strategies to
lessen vulnerabilities.
 Readiness
 Responsiveness
 Recovery
• Every phase/strategy reinforces resilience, grouped into two: (i) proactive
(readiness), and (ii) reactive (responsiveness and recovery) approaches (Neboh
and Mbhele, 2020).
• Resilience evaluation and administration of the supply chain seek to avoid the
shift into unwanted situations in case of any difficulty (Carvalho et al., 2012).
SC Resilience - Readiness
• Pre-emptive (i.e. readiness) capability is imperative for establishing dynamic
control on the supply chain. For example, supply chains with high level of
readiness have the flexibility of arranging alternative strategies to reduce
vulnerabilities.
• Organisations need pre-emptive capabilities to overcome uncertainties of
business environments.
• Such capabilities can also be commensurate with the capability of supply chain
readiness in the face of turbulence.
• Sub-dimensions of readiness dimension are selected as:





disaster preparation,
flexibility,
redundancy/backup capacity,
visibility and
collaboration.
SC Resilience – Readiness Strategies
• The framework of supply chain readiness entails identification,
measurement, prioritisation, evaluation, implementation, monitoring,
and controlling (Chowdhury and Quaddus, 2016).
• The readiness strategies are through visibility and robustness.
Visibility is one method that enables companies to create a smooth
link throughout the supply chain and to avoid adverse effects of
disruption to the supply chain.
• Robustness is another technique that allows a firm, in tumultuous
times, to resist all disruptions and produce value in the whole supply
chain (Piprani et al., 2020).
SC Resilience - Responsiveness
• SC Responsiveness is the ability to respond quickly to critical
situation.
• Supply chain oriented organisations should exhibit the attributes
of trust, commitment, cooperation and compatibility with supply
chain partners and top management support when making
supply chain decisions.
• This type of inter-organisational trust, cooperation and
commitment helps the supply chain members to reduce
uncertainty in the network.
SC Resilience – Responsiveness Strategies
• Javaid and Siddiqui (2018) state that responsiveness strategies in resilience
are also the ability to respond to the changing demands of the customers and
other market factors within the appropriate time to retain its competitive
advantage.
• The responsiveness strategies are through flexibility and redundancy.
• A flexibility approach is a business's ability to change with little time and
effort to changing environmental and stakeholder requirements
(Tukamuhabwa et al., 2015; Carvalho et al, 2012).
 Flexibility aids businesses to keep resources and establish vital partners to address supply
and demand to boost the supply chain's resilience quickly; it also maximises internal
capabilities to sustain profitability and enhance its effectiveness (Siagian et al., 2021).
 Redundancy affects businesses carrying additional inventory or sustainability efforts for
unexpected events (Piprani et al., 2020).
SC Resilience - Recovery
• Late response to disaster may cost several hundreds of million dollars to
companies and supply chain partners.
• For example, a late response during fire in the supplier’s plant of Ericsson
accounted for a huge loss of $400m (Norrman and Jansson, 2004).
• On the other hand, a quick response from Nokia after the occurrence of
fire in the same supplier’s plant helped Nokia to overcome the disruption
arising from supply shortage of chip and to gain competitive advantage
(Sheffi and Rice, 2005).
• Thus, resilience can also be assessed by the extent of recovery time,
cost, absorption of disruption and ability to reduce the impact of
loss which focuses on the post disruption capability of a system.
SC Resilience – Recovery Strategies
• Recovery can be referred to as the ability of a supply chain to revert to
its original state after being affected due to some change in the external
environment (Carvalho et al., 2010; Chowdhury and Quaddus, 2016;
Ivanov et al., 2017).
• Supply chain recovery ability enables the supply chains to bounce back
to their original state and mitigate the impact and severity of the
disruption caused by some change in the external environment of the
business (Carvalho et al., 2010; Felea and Albăstroiu, 2013; Ivanov et
al., 2017).
• According to Piprani et al., recovery strategies involve contingencies,
which means restructuring and managing resources to reduce adverse
consequences of supply chain disruptions (2020).
IBM Case Study: Building a Smarter Supply Chain
• The power of AI and Blockchain to drive greater supply
chain visibility and mitigate disruptions.
• IBM proposes 3 areas to help make your supply chain more
resilient to disruptions:
1) Structural risk and flexibility: Develop smarter supply chains
with optionality.
2) Rapid reaction and resolution: Harness AI and collaboration
while troubleshooting issues.
3) Global visibility and insights: Enhance transparency across
your network with data.
SC Resilience Strategies – Structural Risk and
Flexibility
• Smarter supply chain modelling and scenario analysis
 Implement digital twins and assess the immediate and long-term
ability to continually balance lean operations and risk mitigation.
• Flexible structural supply chains with optionality
 Harness analytics, artificial intelligence (AI) and visualization tools to
allow structure modelling before a build.
• Alternative sourcing methods and logistics routes
 Evaluate geo-political risks, climate change risks, cyber security risks,
and natural disasters and develop plans for multiple scenarios across
your supply chain.
SC Resilience Strategies – Rapid Reaction and
Resolution
• Strategic partners working together
 Leverage collaboration rooms and data sharing platforms among partners to
understand the impact of disruptions across the joint supply chain.
• Quick responses and resolutions
 Make faster decisions using machine analysis of structured and unstructured
data.
• AI-supported rapid scenario planning
 Unlock hidden insights to improve the supply chain planner’s abilities to
determine options and act faster than competition.
SC Resilience Strategies – Global Visibility and
Insights
• Actionable insights from real-time data
 Use AI to assess unstructured data and provide alerts that help predict
possible disruption and its impacts on your supply chain upstream and
downstream.
• Enhanced end-to-end visibility of supply chain flows
 Put in place a global tool, like the IBM® Sterling™ Supply Chain Insights, for
long-term insight across supply chain flows.
• Additional opportunities to integrate emerging technologies
 Combine a control tower with a blockchain solution that employs IoT and AI,
like IBM Hyper Insights, to understand the location of products in near-real
time.
Recommended reading
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Aslam, H., Khan, A.Q., Rashid, K. and Rehman, S. (2020). Achieving Supply Chain resilience: The Role of Supply Chain
Ambidexterity and Supply Chain Agility. Journal of Manufacturing Technology Management, 31(6), pp.1185–1204.
Carvalho, H., Azevedo, S.G. and Machado, V.C. (2010). Supply Chain Performance management: Lean and Green
Paradigms. International Journal of Business Performance and Supply Chain Modelling, 2(3/4), p.304.
Chopra, S. & Meindl, P., (2013). Supply Chain Management: Strategy, Planning & Operation. 5th ed. s.l.: Pearson
Education, Inc.
Chowdhury, M.M.H., Quaddus, M. and Agarwal, R. (2019). Supply Chain Resilience for performance: Role of Relational
Practices and Network Complexities. Supply Chain Management: An International Journal, 24(5), pp.659–676.
Ivanov, D., Dolgui, A., Sokolov, B. and Ivanova, M. (2017). Literature Review on Disruption Recovery in the Supply
Chain. International Journal of Production Research, 55(20), pp.6158–6174.
Neboh, N. and Mbhele, T. (2020). Supply Chain Resilience and Design in Retail Supermarkets. Journal of Contemporary
Management, 17(2), pp.51–73.
Pettit, T. J., Croxton, K. L., & Fiksel, J. (2013). Ensuring supply chain resilience: development and implementation of an
assessment tool. Journal of business logistics, 34(1), 46-76.
Piprani, A.Z., Jaafar, N.I. and Mohezar Ali, S. (2020). Prioritising Resilient Capability Factors of Dealing with Supply Chain
disruptions: an Analytical Hierarchy Process (AHP) Application in the Textile Industry. Benchmarking: An International
Journal, 27(9), pp.2537–2563.
Piprani, Arsalan.Z., Mohezar, S. and Jaafar, Noor.I. (2020). Supply Chain Integration and Supply Chain Performance:
The Mediating Role of Supply Chain Resilience. International Journal of Supply Chain Management, 9(3), pp.58–73.
MCQs learning activities
The concept of SC resilience
1) SC resilience is about managing and adapting to the unknown
across the whole spectrum of risk, from day-to-day operational
risks through to long term planning.
2) SC resilience is unidimensional because it focusses on
operations.
3) SC resilience is caused by crisis such as the COVID-19
pandemic.
4) SC resilience is the concern of multinational companies.
5) SC resilience is about financing international expansion.
MCQs learning activities
The concept of SC resilience
1) SC resilience encompasses both a proactive and reactive approach.
2) Proactive and reactive approaches to SC resilience entail three
phases that are mutually exclusive.
3) SC resilience cannot enable organisations to operate their available
resources and capabilities in unforeseen ways.
4) SC resilience is not designed to avoid the shift into unwanted
situations in case of any difficulty.
5) In SC resilience, organisations cannot reconfigure their resources
and capabilities.
MCQs learning activities
Why SC resilience matters?
1) SC resilience matters because strong data and analytics capabilities are crucial
in understanding complexity, anticipating potential disruption, and quickly
developing a response.
2) SC resilience matters because companies need to respond rapidly and
confidently to shape and execute a short-term tactical plan that will mitigate
the risks to human health and protect the functioning of global supply chains.
3) SC resilience matters because it is so critical to understanding risk and
uncertainties.
4) SC resilience matters because senior management needs to make sound
decision.
5) SC resilience matters because it defines organisational vision.
MCQs learning activities
SC resilience – readiness
1) In SC resilience, visibility helps to create a smooth link throughout
the supply chain to avoid adverse effects of disruption to the supply
chain.
2) Visibility is the only strategy in SC resilience that can enable the
organisation to identify, measure, prioritize and evaluate risks.
3) Visibility is the cornerstone of SC resilience.
4) When data is shared with key suppliers, visibility in SC resilience is
enhanced.
5) Banks need access to staff engaged in risk management to better
rate the financial risk.
MCQs learning activities
SC resilience – responsiveness
1) Responsiveness strategies are developed through flexibility and redundancy.
2) Once an organisation achieves flexibility in its SC, it takes no effort to
respond to changing environmental and stakeholder requirements.
3) Because flexibility and redundancy work together to develop
responsiveness, the former cannot achieve maximisation of internal
capabilities.
4) In spite of its usefulness in developing SC resilience, Redundancy is a drain
on profitability.
5) To develop redundancy, one of the strategies is to have a shadow team of
experts waiting for disasters to happen so they can do their job.
MCQs learning activities
SC resilience – recovery
1) Recovery can be achieved without a contingency plan because such
plans add costs.
2) Recovery strategies implies every staff member working extra hours.
3) Effective recovery strategies will help the supply chain to revert to its
original state after being affected by changes in the external
environment.
4) The main focus of recovery strategies is to get into normal operations.
5) As part of recovery strategies, organisations always call upon
consultants to mitigate the impact and severity of the disruption
caused by some change in the external environment of the business.
MCQs learning activities
IBM approach to SC resilience
1) Alternative sourcing and logistics routes in IBM SC will add cost to transport
because if you want to avoid pirates in the Suez Canal, you must pass through
the Cape of Good Hope.
2) Evaluating geo-political, climate change, cyber security risks, and natural
disasters and developing plans for multiple scenarios across your supply chain
are key elements of understanding structural risks.
3) IBM SC resilience approach is very concerned with partners in countries that
practice child labour.
4) As part of its mission, IBM SC resilience approach includes the protection of the
Amazon rain forest.
5) In support of new technologies such as 5G, IBM SC resilience approach requires
universities to increase teaching in STEM subjects.
MCQs learning activities
IBM approach to SC resilience
1) Real time data can generate actionable insights to help predict possible
disruption and its impacts on supply chain upstream and downstream.
2) Blockchain technology is the ultimate solution to achieving global
visibility in SC resilience.
3) IBM® Sterling™ Supply Chain Insights is a complex tool with little
benefits to SMEs.
4) understand the location of products in near-real time is useless
because it does not cover the flow of services across borders.
5) Real time data is unreliable in developing global visibility since people
change their mind all the time.