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The Role of Resiliency in Managing Supply Chains Disruptions

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Supply Chain Risk Management

Abstract

Current day business organizations, symbolized by complex and global supply chains, are often subjected to unforeseen threats that result in huge financial losses. There are no sure ways of assessing these threats, especially the “black swans” (high-impact, but low-probability events like natural disasters, terrorist attacks, outbreaks, etc.), as the severe dearth of historical data excludes the use of forecasting tools to evaluate those disruptions. However, it has been observed that some organizations cope far better than others in addressing these unforeseen and unquantifiable disruptions. This is not because they have a ‘secret formula’, but due to them sharing a critical trait known as resilience. The notion of supply chain resiliency, which is the ability of a supply chain to recover to the ‘pre-disruption’ or a better state after suffering through a disruption process, has always been considered as a core element in the success of an organization. The primary objective of this chapter is to familiarize the readers with the concept of supply chain resiliency and its role in mitigating supply chain disruptions. The chapter will also reveal the advantages of a resilient supply chain through insightful examples from a wide range of industries.

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Notes

  1. 1.

    It should be worthwhile to mention here that the risk exposure index, developed by David Simchi-Levi at Massachusetts Institute of Technology (MIT) enables companies for the first time to fully quantify their maximum risk exposure under any unpredictable supply chain disruptions. Ford has already implemented this in collaboration with the MIT team, by developing their Decision Support System (DSS) for risk management, which is used daily. The system is used by procurement managers and directs in three ways—(1) strategically, to identify exposure to risk associated with parts and suppliers, prioritize and allocate resources effectively, segment suppliers, and develop risk mitigation plans, (2) tactically, to track daily changes in risk exposure in order to alert procurement executives to changes in their risk position; and (3) operationally, to respond to a disruptions by identifying an effective way to allocate resources after a disruption (Simchi-Levi et al. 2014; Simchi-Levi 2015).

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Authors and Affiliations

  1. Jindal Global Business School, O. P. Jindal Global University, Sonipat, Haryana, 131001, India

    Anirban Ganguly

  2. Schneider Electric, 1st Main Rd, Electronic City, Bengaluru, Karnataka, 560100, India

    Debdeep Chatterjee

  3. International Management Institute, B-10, Qutab Institutional Area, Tara Crescent, New Delhi, Delhi, 110016, India

    Harish Rao

Authors
  1. Anirban Ganguly
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  2. Debdeep Chatterjee
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  3. Harish Rao
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Corresponding author

Correspondence to Anirban Ganguly .

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Editors and Affiliations

  1. Graduate Program in Business and Development Studies, Sophia University, Tokyo, Japan

    Yacob Khojasteh

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Ganguly, A., Chatterjee, D., Rao, H. (2018). The Role of Resiliency in Managing Supply Chains Disruptions. In: Khojasteh, Y. (eds) Supply Chain Risk Management. Springer, Singapore. https://doi.org/10.1007/978-981-10-4106-8_14

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