Supply Chain Resilience (SCR)

Article by: Sheryl Lynn Baas

Last update: August 10, 2023

Supply Chain Resilience (SCR): this article explains the concept of Supply Chain Resilience (SCR) in a practical way. The article begins with the definition of this term, followed by an explanation of why a resilient supply chain can be the difference between success or failure, and a practical example. Enjoy reading!

What is Supply Chain Resilience (SCR)?

The COVID-19 period served as a wake-up call for businesses around the world, highlighting the critical importance of a strong and resilient supply chain.

The global economy faced major disruptions as supply chains faced unprecedented challenges, leading to shortages of essential goods, delays in deliveries and financial losses for many companies.

This example vividly illustrates how supply chain resilience is not only a desirable quality, but a necessity for organizations operating in today’s interconnected and unpredictable world.

Definition and meaning

Supply Chain Resilience or SCR refers to the ability of a supply chain to respond effectively to disruptions, recover from setbacks and maintain continuity in the face of unforeseen events.

It’s not just about dealing with short-term issues and quickly recovering from disruptions, but also about implementing strategies and processes that prepare the supply chain for future long-term challenges.

The goal of SCR is to minimize negative impacts and maintain a high level of performance, even under difficult conditions.

Background and origin

Since the early 21st century, supply chain risk management has attempted to apply traditional risk management methods at the supply chain level rather than just the corporate level.

Identifying, assessing, treating and monitoring risks at a single company level can be relatively simple, but doing the same for a complex supply chain with thousands of companies is much more challenging.

The complexity of supply chains has led to the development of the concept of supply chain resilience as a complement to traditional risk management.

Important figures in the development of the concept of supply chain resilience

Several figures have played an important role in the development of the concept of supply chain resilience.

One of the leading thinkers in this field is Professor Yossi Sheffi, a professor at the Massachusetts Institute of Technology (MIT) and an expert on supply chain management and logistics. Sheffi has written extensively about the challenges of managing supply chain risk and emphasized the importance of resilient supply chains.

Another influential figure is Martin Christopher, a Emeritus Professor at the Cranfield School of Management in the United Kingdom. Christopher has focused on developing strategies and frameworks to make supply chains more resilient and has contributed to raising awareness of the importance of supply chain resilience.

Other key contributors to the concept of supply chain resilience include David Simchi-Levi, a professor at MIT, and Ann Vereecke, a professor at Vlerick Business School in Belgium. Both academics have done extensive research on various aspects of supply chain resilience and contributed to its understanding and development.

Technology and building supply chain resilience

Supply chain technology plays an essential role in building resilience in supply chains.

Modern technology solutions enable supply chain operators to collect real-time information, automate processes, analyze data and make better decisions.

Digital supply chain platforms, such as advanced data analytics, Internet of Things (IoT), blockchain and artificial intelligence (AI), offer opportunities to increase visibility and transparency, identify risks and respond quickly to disruptions.

Smart inventory management

An example of using supply chain technology to build resilience is the concept of smart inventory management.

Through advanced forecasting algorithms and real-time data analysis, the demand for raw materials and finished products can be accurately predicted.

This enables supply chain managers to maintain the necessary inventory levels and deliver the right quantities of materials and products at the right time.

The use of smart technologies reduces the risk of stock shortages and improves the response time to unforeseen events.

Risks

Supply chains face several risks that can threaten resilience. These risks can range from natural disasters and political instability to economic crises and trade restrictions. Identifying and managing these risks is essential to building resilience.

One approach to dealing with supply chain risk is to build “safety stocks” or “buffer stocks.” This means that extra stock is kept to deal with possible disruptions. By building an inventory buffer, supply chains can respond more flexibly to unexpected events and limit the impact of disruptions.

Resilient supply chains strive for an optimal balance between operational efficiency and the ability to respond quickly to disruptions.

Competitive Advantage

Building resilience in the supply chain offers significant benefits and can provide a competitive advantage for organizations. Resilient supply chains are able to respond quickly to changes in market demand, supply chain disruptions and other unforeseen events. They can respond flexibly to new opportunities, shorten time-to-market and improve customer satisfaction.

In addition, resilient supply chains can add value to the organization through better operational efficiency, higher customer loyalty and improved profitability. Organizations that have resilient supply chains are more likely to succeed in a dynamic business environment.

To achieve supply chain resilience, organizations need to implement a number of strategies:

Firstly, it is important to have a flexible and diverse supply base. This means that there must be multiple suppliers and alternative sources of raw materials, so that disruptions can be accommodated at one supplier. Diversifying supply channels and identifying alternative routes for transportation can also increase resilience.

Secondly, organizations must invest in continuous monitoring and risk management. This includes identifying potential risks in the supply chain, assessing their impact and likelihood, and implementing measures to mitigate those risks. Having a well-informed and responsive risk management team is essential to respond quickly to disruptions.

Thirdly, collaboration with partners and suppliers is critical. Building strong relationships and sharing information with key players in the supply chain can help identify risks and co-develop resilient solutions. Sharing information about demand forecasts, inventory levels and operational capacity can increase visibility and responsiveness.

Now it’s your turn

What do you think? Do you recognize the explanation about supply chain resilience? Has the organization you work for experienced major disruptions in the supply chain? What strategies were used to respond to these disruptions? What role does technology play in your work environment in terms of supply chain management? Do you have tips or comments?

Share your experience and knowledge in the comments box below.

More information

Tukamuhabwa, B. R., Stevenson, M., Busby, J., & Zorzini, M. (2015). Supply chain resilience: definition, review and theoretical foundations for further study. International journal of production research, 53(18), 5592-5623.
Roberta Pereira, C., Christopher, M., & Lago Da Silva, A. (2014). Achieving supply chain resilience: the role of procurement. Supply Chain Management: an international journal, 19(5/6), 626-642.
Ponomarov, S. Y., & Holcomb, M. C. (2009). Understanding the concept of supply chain resilience. The international journal of logistics management, 20(1), 124-143.
Pettit, T. J., Fiksel, J., & Croxton, K. L. (2010). Ensuring supply chain resilience: development of a conceptual framework. Journal of business logistics, 31(1), 1-21.

How to cite this article:
Janse, B. (2023). Supply Chain Resilience (SCR). Retrieved [insert date] from Toolshero: https://www.toolshero.com/management/supply-chain-resilience/

Original publication date: 08/10/2023 | Last update: 08/10/2023

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Article by:

Sheryl Lynn Baas

Sheryl Lynn Baas is our Communications Manager at Toolshero and you might recognize her from our learning videos. Sheryl’s academic background is in Cultural Anthropology and Development Sociology and she is the founder of the Sheryl Lynn Foundation, a non-profit for children and education in the Philippines. She’s a jack-of-all-trades and furthermore shares her gifts as a spiritual coach, presenter and DJ. Fun fact: she is former Miss Netherlands 2006.