Supply Chain Resilience for an Era of Turbulence

In the EIU’s report, “Supply Chain Resilience for an Era of Turbulence”, commissioned by the Association for Supply Chain Management (ASCM), the EIU examines capabilities that increase supply chain resilience in today’s environment of increased risk and more severe supply chain disruptions.

The unprecedented impacts of covid-19 have drawn increased attention to supply chains, with supply chain resilience becoming a favorite topic for discussion this past summer. Leading companies are turning words into action, actively taking steps to build resilience in their supply chains and developing their capabilities to face the variety of risks that characterize this era of turbulence, including geopolitical shifts, cyberthreats, resource depletion, climate change, and pandemics. Adapting to today’s new normal will require more than classic supply chain management capabilities. In our briefing paper, we discuss two distinct domains of modern supply chain resilience: real-time supply chain resilience and strategic supply chain resilience

Strengthening real-time supply chain resilience will enable companies to bounce back and recover from shocks. Developing their tactical capabilities to prepare, sense, and respond to disruptions will begin with understanding their supply chains. Companies can then implement risk-agnostic approaches to mitigate vulnerabilities and increase their supply chain’s flexibility and agility.

To bounce forward and adapt to a changed environment, companies should also build strategic supply chain resilience. There is growing recognition that supply chain sustainability is now a strategic imperative, and that companies can embrace sustainability and circularity while increasing their supply chain resilience by doing so.  Adapting will also mean understanding supply chain risks over a longer risk horizon, building stronger, long-term relationships across the value chain, and recalibrating long, global, supply chains to reduce supply chain fragility.

In order to provide insights about these and other resilience-building capabilities, The EIU and ASCM are developing a benchmarking tool for release in early 2021 that will assess real-time and strategic supply chain resilience in a number of publicly listed companies. The EIU’s forthcoming analysis will combine data from a survey of corporate executives with financial and ESG data for companies in three key sectors: pharmaceuticals, retail, and consumer technology manufacturing. By providing evidence-based assessments of industry and cross-industry practices, we hope that the benchmark will give companies actionable recommendations about how they can invest in modern supply chain resilience.

“Classic risk management can’t protect companies against today’s turbulent change and more frequent disruptions”

DR JOSEPH FIKSEL, THE RISK INSTITUTE, OHIO STATE UNIVERSITY

Find out more about our research program and download the full briefing paper by following the link below.

Read the report