A resilient supply chain definition refers to a company's ability to withstand sudden and/or sustained interruption of key processes and sources of supply. Simply put, it is the ability of a company to continue operating normally despite such interruptions. It is the ability of a company to continue making business as usual even during periods of substantial interruptions in its main supply lines, raw materials and/or production facilities. In other words, it is our understanding that a robust and resilient supply chain is a key to long-term viability and success. That is, a company that operates using a robust and resilient supply chain enjoys significant cost savings, while also experiencing rapid return on investment (ROI) and positive cash flow.
Why is a robust and resilient supply chain so critical to today's businesses? Simply put, the supply chains that provide many companies with the materials, tools and resources they need to produce and maintain operations are constantly being interrupted in order to secure the raw materials, process and supplies. How many times have you "ran into the wall," only to have the company not be able to produce the goods in the promised time frame? Or, how about that time when you were so close to meeting your sales goals, only to have those dreams dashed when the project was delayed? These are just some examples of the experiences many companies have been through due to a lack of resilience in their supply networks.
A robust and resilient supply chain definition allows companies to respond quickly and effectively to any form of supply chain disruption, ranging from a simple loss of contact with an alternate vendor to a complete disruption of the main distribution network. A resilient supply chain provides immediate coverage when a company needs to quickly recover and restore operations to normal levels. In essence, it offers a "plan B" when everything else has failed!
As mentioned above, most companies would prefer to use a flexible, resilient supply chain as opposed to a robust one. Why is flexibility better for the company? When a company can quickly adapt to sudden or extreme changes in circumstances by quickly adjusting its operations, the company can increase its profit margin, while keeping expenses down. Rapid flexibility is an essential quality for most supply chain managers because abrupt or large-scale disruptions can lead to significant negative impacts on production, service, logistics and sales.
A robust and resilient supply chain definition should also include real-time insights and analytics. In today's world, most companies rely on advanced analytics and information technology to identify and monitor changes in their business processes, products or services. Companies that use real-time analytics are able to identify problems much faster than their slower counterparts, which in turn allows them to proactively and systematically address these issues and improve their performance. Advanced analytics and information technology are quickly becoming the norm in the supply chains of every industry.
How does a resilient supply chain to respond to sudden or large-scale changes? During times of sudden change, the entire supply chain experiences disruptions in order to effectively deal with the sudden change and make sure that the company is able to quickly adapt and resume normal operations. The sudden change can be caused by several factors such as a hardware or software malfunction, human error, or a natural disaster or emergency. When a disruption occurs, it is important for a company to identify the cause of the disruption, address the issue and come up with a recovery plan, so that the company is able to continue operation as usual.
While it is true that a resilient supply chain definition can be extremely difficult to pinpoint, business continuity plans are critical in making sure that business continuity will not be affected by sudden business chain disruptions. A business continuity plan includes an overall plan that focuses on the overall health of the supply chain. The plan will also focus on the prevention of unexpected stoppages due to any number of reasons. For example, if a physical infrastructure breakdown is what causes a physical infrastructure outage, the overall business continuity plan may include steps to mitigate against that.
The definition of resilient supply chains may not always be clear, especially in today's increasingly complicated and dynamic world. It is important for companies and business to consider how they can stay ahead of potential threats and how they can respond quickly when these threats do occur. Through modern supply chain technologies, companies are able to ensure that they can operate even when some major issues arise. By working closely with companies that are leaders in their field, businesses can ensure that they have the tools necessary to handle any issues that may arise in their line of business.