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Resilience: A Key Factor in Supply Chain Sustainability

The common use of the term “sustainability” today almost exclusively refers to the environmental impact of a given product or process. When it comes to a company's supply chain, being sustainable means far more than simply implementing green initiatives. Supply chain sustainability encompasses both the external and internal factors that keep the flow of input to output going for both the short and long term. Planning and managing the supply chain means studying every factor and how these factors affect the business and its supply chain partners.

One of the key factors in establishing and maintaining a sustainable supply chain is resilience. In this context, resilience refers to balancing continued flow against risk of disruption. A resilient chain will be drawn from at a rate that supports the business and does not degrade the source itself. Resilience allows the supply chain to maintain the flow, respond to a change in demand, and recover should a disruption take place. With true resilience, the supply chain will be agile enough to overcome input changes or other factors quickly without sacrificing efficiency or dramatically affecting output.

Supply chain management (SCM) is responsible for maintaining proper stewardship of supply; without this, the supply could be outstripped, resulting in unsustainability. In order to obtain resilience and ensure sustainability, SCM professionals need to examine the chain closely for any potential weaknesses or risks — as a single broken link could shut down the entire chain. In some cases it is necessary to find a new link or rebuild a broken one. In order to keep the best flow possible, SCM professionals need to be constantly aware of the performance of their partner links. Although we rely heavily on trust and working together with a small group of our partners, alternate supply chains may be in order to improve resilience and agility.

Determining resilience
One of the key questions SCM professionals should ask when evaluating whether or not a supply chain is resilient is this: “Does the supply chain fit the strategy and overall goals of the business today and into the future?” The only way to answer that question is by evaluating all the other enterprises in the chain and the congruence of their strategies with those of the business and the chain. Congruence of these strategies is an effective first step in determining whether a chain has the potential to form true resilience.

A company that wants to provide true value to customers over the long term needs to be attentive to resilience in addition to operations. Operational management does not currently delve deeply enough into the supply chain to find the root of problems. SCM professionals have the responsibility not only to analyze the suppliers, but also the suppliers' suppliers and as far as possible into the chain to view it more holistically as a continuum.

Significant supply chain problems of recent years that have involved contamination from off shore sources did not originate from the first tier suppliers or even their suppliers. These had sources close to the primary origin of the materials used in the product. These are signals that programs must establish visibility, collaboration, and teamwork deep into the partner community. This kind of partner collaboration requires trust that may be hard to forge and maintain across geographic and cultural boundaries. Verification of any trust relationship is essential to avoid the risk of failure.

Communication is a key aspect when analyzing the supply chain. Even if a member of the chain does not directly supply a firm, it can still impact the company and the flow of output due to the tight chainlike relationships of multiple partners in the supply chain. Ensuring strong communication processes and protocol is crucial to maintaining the flow of the supply chain between all members, both direct and indirect.

The supply-chain operations reference model (SCOR) provides SCM professionals and others a template to analyze the functions of the company and the supply chain. With this framework, a company can start evaluating supply chain performance metrics. Using the related metrics provides a better idea of where problems and risks may be occurring. Risk mitigation plans can then be developed to apply before, during and after a risk event.

The key factor — finding competent SCM professionals
Ultimately, developing a resilient supply chain starts with having professionals on staff with the proper qualities and skill sets to create and maintain a sustainable chain. Insight is one of the top qualities a SCM professional must possess. The best way for a hiring manager to determine whether a potential employee possesses insight is through previous work experience. Scenario-based questions help determine whether a candidate has strong critical thinking skills that lead to the ability to analyze and come up with a solution quickly and effectively. Skill sets are easier to validate by seeking individuals with professional certification. The most established among these is the Certified Supply Chain Professional (CSCP) offered by APICS. Brandman has partnered with the APICS Orange County to offer these preparation courses for this examination at the Irvine campus. This comprehensive course is instructor led and supplemented with a text of approximately 1,400 pages, online activities, and extensive online testing to identify weak areas and validate the learning experience.

The growing demand for supply chain resilience
There is an increasing amount of research and attention being paid to resilience and supply chain sustainability. One simple idea is at the forefront: Just as in a real physical chain, if one link in the supply chain is broken, the whole chain becomes functionally useless.

Single Point of Failure by Gary S. Lynch explores this concept in detail. The Center for Resilience at the Ohio State University website is dedicated to exploring concepts of sustainability and resilience in the supply chain and risk management. Previous concerns were about producing output with greater speed and affordability.

Supply chain resilience is becoming the new answer to meeting consumer demands against a backdrop of a changing supply chain. That chain must be able to keep pace with that demand now and in the future, despite variation and unplanned events.

In spite of the growing emphasis on sustainability and resilience, very few educational programs offer formal training or even discussion of these topics in the classroom. Brandman University is one of the few programs offering modules that revolve around supply chain management, helping potential SCM professionals gain the skills they need.

The growing interest in resilience calls for more background education in the practice as a means to train more qualified professionals. Developing resilience cannot be ignored when attempting to achieve sustainability in the supply chain — now is the time for a new wave of savvy SCM professionals who are ready to meet the demands of a changing business landscape.

1 comment on “Resilience: A Key Factor in Supply Chain Sustainability

  1. Hailey Lynne McKeefry
    June 9, 2014

    Thanks, Nick! What do you see as some of the major misconceptions or mistakes that organizations make around this quesiton of supply chain sustainability?

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