The McKinsey Global Institute (MGI) has recently published a new report: Risk, Resilience, and Rebalancing in Global Value Chains. The authors show that becoming more resilient does not have to mean sacrificing efficiency. Their research highlights the many options for strengthening resilience. They argue that “[companies] have an opportunity to emerge from the current crisis more agile and innovative.” They also write: “Intricate supplier networks that span the globe can deliver with great efficiency, but they may contain hidden vulnerabilities. Even before the COVID‑19 pandemic, a multitude of events in recent years temporarily disrupted production at many companies. Focusing on value chains that produce manufactured goods, this research explores their exposure to shocks, their vulnerabilities, and their expected financial losses. We also assess prospects for value chains to change their physical footprint in response to risk and evaluate strategies to minimize the growing cost of disruptions.” I found this report to be very insightful.
Norrman & Jansson’s (2004) case study on Ericsson’s supply chain risk management (SCRM) practices is definitely part of the canon of SCM literature. After 15 years, it was time for an update. Together with Andreas Norrman, I visited Ericsson in Stockholm to investigate their SCRM practices. The results can now be found in our new article, The Development of Supply Chain Risk Management over Time: Revisiting Ericsson. Our article demonstrates how Ericsson’s SCRM practices have developed, indicating that improved functional capabilities are increasingly combined across silos and leveraged by formalized learning processes. Important enablers are IT capabilities, a fine-grained and cross-functional organization, and a focus on monitoring and compliance. Major developments in SCRM are often triggered by incidents, but also by requirements from external stakeholders and new corporate leaders actively focusing on SCRM and related activities. Although our article did not focus on SCM in the era of COVID-19, decision-makers can learn about many practices and tools that might also be useful to cope with the current situation.
Norrman, A. & Wieland, A. (2020). The Development of Supply Chain Risk Management over Time: Revisiting Ericsson. International Journal of Physical Distribution & Logistics Management, 50 (6), 641-666. https://doi.org/10.1108/IJPDLM-07-2019-0219
The Journal of Business Logistics has a call for papers for a Special Topic Forum on Participating in the Wider Debate on Resilience (PDF). Submissions are due: June 1st, 2019. The editors for this JBL Special Topic Forum are Andreas Wieland (Copenhagen Business School) & Christian F. Durach (ESCP Europe Business School).