Supply Chain Resilience and Strategic Development Framework

Supply Chain Resilience

Causes of Supply Chain Disruption

• Loss of talent or skills
• Human illness
• Transport network disruption
• Adverse weather
• Cyber-attacks and data breaches
• Third-party failure
• Natural disasters
• Industrial disputes
• New laws and regulations

The Role of Technology

Technology is vital for mitigating disruptions. As of 2022, 40.7% of organizations utilize technology for this purpose, with those experiencing the greatest impact being the most likely to invest in new solutions.

Levels of Resilience

• Employee: The ability to thrive in a changing environment, facilitated and supported by the firm.
• Firm: The capacity to recover from disruptive events, reduce adverse effects, survive, adapt, and grow.
• Supply Chain: The capacity to prepare for, respond to, and recover from disruptive events while maintaining operations at the desired level.

The 4 Phases of Supply Chain Resilience

1. Preparation
2. Response
3. Recovery
4. Growth and competitive advantage

For a strong readiness phase, organizations must adopt a proactive approach to ensure resiliency.

Proactive vs. Reactive Resilience

• Proactive Resilience: Anticipating and mitigating potential disruptions before they occur.
• Reactive Resilience: The ability to respond quickly and recover from a disruption after it has occurred, utilizing flexibility, agility, and rapid recovery strategies.

Antecedents of Supply Chain Resilience

Antecedents are the factors that drive firms to build resilience, including:

• Flexibility
• Redundancy
• Agility
• Collaboration
• Supply chain visibility
• Information sharing
• Financial strength
• Communication
• Supply chain responsiveness

Category Strategy Development

According to Mesbah, this represents the lower end of strategy.

Strategic Questions for Company Levels

• What markets will the firm compete in, and on what basis?
• What are the long-term and short-term business goals?
• What are the budgetary and economic resource constraints, and how will they be allocated to functional departments?

Creating Shareholder Value

• Increasing Revenues: Achieved by raising product prices and increasing sales volume.
• Decreasing Costs: Achieved by reducing employee costs, process inefficiencies, waste, and the cost of goods and services.

Integrative Strategy Development

The hierarchy follows: Corporate Strategies → Business Unit Strategies → Supply Management Strategies → Category/Sourcing Strategies.

Components of Integrative Strategy

This is a continuous loop consisting of:

• Company objectives
• Cross-functional business objectives
• Purchasing and supply chain goals
• Purchasing and supply chain strategies
• Performance measurement systems
• Performance measurement reviews
• Continuous improvement