Supply Chain Resilience 2011

Volatility, demand swings, and supply uncertainty are SCM trends (I recently reported). One of my primary research interests is in the area of supply chain resilience and I was particularly curious when I got the report Supply Chain Resilience 2011 into my hands. It reveals that 85% of the organizations surveyed experienced at least one supply chain disruption in the last twelve months. Among the major sources of disruption are adverse weather, unplanned outage of IT or telecommunication systems, transport network disruption, failure in service provision by an outsourcer, and, not surprisingly, earthquake and/or tsunami. It is also found that the main consequences of disruption are loss of productivity, increased cost of working, loss of revenue, customer complaints, and impaired service outcome. Most importantly, the report reminds us that many disruptions originate below the immediate tier one supplier. Again, a supply chain is not a triad, but a complex and dynamic network and must be managed as such.