Supply Chain Resilience
There are lessons to learn from the coronavirus pandemic. The world is integrally connected. We do not actually live in independent nations, whatever our sense of national identity. We live in neighbourhoods and those others out there are our neighbours. That does not mean we have to like them or even get to know them. We must, however, recognize that they are part of our lives. We cannot isolate ourselves from them. What happens in their neighbourhood has an impact in my neighbourhood and in many other neighbourhoods. No distancing in time or place or nationhood can prevent that. We live in one world; there are no alternatives. Global supply chains are the highways of both connectivity and vulnerability. As with past pandemics
, trade routes facilitate the mobility of microbes, viruses, bacteria, and germs just as much as they facilitate the transport of people, food, money, consumer goods, sub-assemblies, and other inputs. We would be naïve to deny that the more effective that global supply chains are, the more vulnerable world economies, societies in general and individuals in particular are. A well-managed supply chain is both a Global Value Chain
and a complex eco-system that breeds vulnerabilities.
Vulnerability is inherently unmanageable and uncontrollable.
Vulnerability is a disruption that causes variances in global supply chains; we plan in order to manage variances. We scope vulnerability and categorize risks. Predictable: politics, currencies, cyber-attacks, failed communications, just-in-time strategies. Unpredictable: terrorism, non-compliance with anti-terrorism guidelines. Physical: fire, natural disasters, blackouts and equipment breakdowns. But what if the risk is pandemic? What if vulnerability extends to people at personal levels? What if the risk unmasks our inability to manage and control? What if it demonstrates the ineffectiveness of our processes and the limitations of our plans? What if it shuts society down and mandates social distancing? How do we handle the risk if there is no one around to manage the plan? A plan is only as good as the people who implement it.
The best-laid plans of mice and men often go awry, or to quote the original Scottish: “The best laid schemes o' mice an' men/Gang aft a-gley”.
We are vulnerable on so many levels. We cannot eliminate risk; we cannot control risk or manage our vulnerability effectively in the face of risk. The coronavirus pandemic demonstrates our vulnerabilities, which ironically are inherent in our best-laid global supply chain plans and processes. The more successfully integrated our global supply chains are, the more vulnerable we are. The pandemic unmasks the limitations of our abilities to respond, manage and control effectively.
Surrender, however, is not an option. Survival and success are essential correlatives. This challenge demands a new way of thinking.
The key is not about what we do to try and manage risk, but about how we build a culture of resilience.
Resilience is our ability to reduce the immediate impact of disruptions, to reduce the consequences of disruptions, and to reduce the time to recover from disruptions. We need to transform our robust strategies into resilient strategies that are responsive, sustainable, agile, scalable and adaptable.