How prepared is your supply
chain for the unexpected?
Not all surprises are good ones. Some are downright disruptive to the point of negatively
impacting the customer experience—and the bottom line. Here are four steps companies
can take to increase supply chain resiliency and better mitigate risk.
THE PAS T FE W YEARS HAVE SEEN NORTH AMERICA—
and other locations worldwide—shaken by a series of natural disasters that have devastated communities. These
extreme events have likewise had a profound impact on
private-sector supply chains. With many organizations’
networks consisting of multiple suppliers and subsuppliers,
a disruption can quickly prompt cascading trouble for the
processes that depend on them—and, ultimately, a negative
impact on customer service and the bottom line.
Clearly, the ability to respond to a disruption is of strategic importance. Creating supply chain resiliency demands a
combination of tactical actions at the site level and broader
strategic changes at the network level. So how can a company build supply chain resilience in order to prepare for
Here are four steps companies can take to minimize the
1. Establish situational awareness. That is, know what
the potential disruptions are for a given location and the
subsequent severity of impact to the organization as a whole.
Included are acts of nature, such as weather or natural
disasters (hurricanes, earthquakes, floods, and heavy snow/
ice). Alternately, fires, power failures, chemical leaks, rogue
employees, acts of terrorism, labor strikes, rising tariffs, and
changing governmental policies can also be disruptive.
Further, transportation shortages or port strikes can
negatively impact a supply chain, as can a failure in information technologies (IT), whether accidental (an employee mistakenly opens an email with a virus) or deliberate
(cyberattacks or ransomware). There’s also the potential for
reputational risk due to any bad publicity that results from
a crisis situation.
As noted by Dr. Yossi Sheffi, the Massachusetts Institute of
Technology’s (MIT) Elisha Gray II Professor of Engineering