Tonya Jackson 6419dfd8524d3

Why resiliency matters to the supply chain

March 15, 2023
There’s a misguided assumption that resiliency merely refers to a company’s ability to successfully manage risk. It is so much more than that.

By Tonya Jackson, Lexmark SVP and chief product-delivery officer 

Disruptions that are difficult to predict or prevent have risen to an uncomfortable level in our increasingly interconnected world. During the three-year span since the COVID-19 pandemic, there has been shock after shock. Count the Russia-Ukraine war at the top of the list that spans from international trade disputes to extreme weather events and crippling cyberattacks. 

For the global supply chain, the impact of these events are widespread and far-reaching. In fact, according to recent research from HUBS, 77% of companies suffered an external disruption to their supply chain during 2022, with shortage of materials representing the biggest challenge. 

Since many of these events are unpredictable, it makes preparing for them extremely difficult. That’s why resiliency has quickly emerged as a key attribute for companies looking to establish a more robust and efficient supply chain. 

But what exactly does supply-chain resiliency look like? And how can organizations adapt their people and technology to achieve it? 

Supply chain resiliency: What it means and why it matters 

When it comes to the supply chain, there’s a misguided assumption that resilience merely refers to a company’s ability to successfully manage risk. It is so much more than that, however. True resilience, as the definition suggests, is all about recovery. It also is about enabling organizations to gain competitive advantage from disruption, by recovering quicker and with less damage incurred. 

For the supply chain, resiliency relies on teams developing strategy and process to work directly alongside their product-design teams and suppliers. The result? A collective responsibility for that key component of the supply chain that dominates most business leaders’ waking thoughts—sourceability. 

Working together on sourceability does not only mean collaborating on design commonality, supplier diversification and managing buffer stock. It also involves selecting and analyzing vast amounts of data and taking preemptive action—before a crisis occurs or just as a disruption is taking hold. 

Most importantly, we need to accept that disruptions will occur—time and again—regardless of how much preparation undertaken. The strategic objective should always be how fast a supply chain can respond to disruption, including a plan B…or even C…should the initial response fall short. These alternative plans will not always be as robust or elegant as the primary response method but, ultimately, resiliency is about being agile and flexible enough to achieve recovery. 

Technology: The role of innovative solutions in managing the supply chain network 

As our world evolves, it’s clear the supply chain of the future will be built on a hybrid technology stack, formed from a mix of proven legacy enterprise-resource planning upgrade offerings, as well as unproven technologies. These emerging technologies should help solve visibility problems, offer real-time scenario planning, and can detect factors that will affect demand-planning. 

To achieve a successful balance between legacy and new technologies, supply-chain leaders must partner closely with their in-house IT teams, while also exploring digital supply-chain capabilities with emerging start-ups. 

Another technological consideration supply chains should leverage is the untapped power of IoT technology, which can be used to monitor operations and connect people with data, enabling more effective and efficient process improvements across the entire supply chain. 

People: Reskilling and reshaping to meet the needs of the evolving supply chain 

Ask any business leader and they will say people remain at the forefront of any workplace transformation. Building a resilient supply chain is no different—success relies on a company’s ability to re-shape their workforce. 

The first step is retrospection—looking back on the lessons learned during the most recent crises. Supply-chain teams can certainly become stressed and overwhelmed during unpredictable events, but the best teams work in cultures that encourage people to never lose focus on serving the customer. 

During a time of crisis, supply-chain leaders should always remain honest, open and transparent, while embracing different voices and ideas from across the organization, regardless of department or seniority. 

Actively ask more questions, explore more new ideas and accept more risk. People grow the most when working in a safe and trusting environment, where they can speak honestly, try new things, and learn from mistakes. 

Mindset, people, and technology: Building a resilient supply chain 

Ultimately, creating a resilient supply chain capable of facing the unpredictable and erratic nature of the modern world relies on a straightforward and attainable process. 

First is a mindset shift—accepting that events happen and that no amount of preparation can prevent them from happening. The key is minimizing the damage while establishing strategies and procedures that focus on achieving recovery. 

Certainly, this depends on a mixture of technology and people. The right technology, capable of handling the complexity of managing through the multi-tiered layers of a modern supply-chain network. Of course, we cannot leave out people and a progressive culture that invests in reskilling to manage the increasing demands of an evolving supply chain. 

As the world continues to evolve, achieving greater resilience has never been so important.