Editor’s Note: The following is an excerpt of a research report published yesterday, “Creating Resilience Amid Disruption: 2020 Supply Chain Market Research.” This third annual research study, conducted by Adelante SCM and the Council of Supply Chain Management Professionals (CSCMP), and presented by BluJay Solutions (a Talking Logistics sponsor), was conducted to gain insight on how companies plan to make their supply chains more resilient. It also revisits questions from the past two years focused on customer experience and innovation. You can read the full report at http://2020.supplychainresearch.info/p/1/
Disruption is the norm in supply chain management.
Remember the labor strike that shut down the U.S. West Coast ports in 2002 for 10 days, or the work slowdowns at the ports in 2014-15? How about the 2011 Japan earthquake and tsunami that severely disrupted high tech, automotive, and many other supply chains? Or the challenges many companies faced in 2018 trying to find truckload capacity, which significantly increased their transportation spend and hindered their ability to meet customer service commitments?
Today, of course, supply chain and logistics professionals are navigating through the disruptions caused by the COVID-19 pandemic.
Whether they are high-impact/low-probability events like natural disasters, pandemics, or terrorist attacks, or every day occurrences like snow storms and traffic jams, dealing with disruptions and exceptions is part of the job description for supply chain and logistics professionals.
Therefore, in light of the pandemic, it is not surprising that supply chain resilience is back in the spotlight. “For companies, resilience measures their ability to, and the speed at which they can, return to their normal performance level following a high-impact/low-probability disruption,” explains Dr. Yossi Sheffi from MIT in his 2005 book, The Resilient Enterprise. At the end of the book, Sheffi writes:
“Thinking about disasters as opportunities and using disaster preparedness to increase resilience are the essence of making lemonade from lemons…The advantage of creating resilience is that […] it is a characteristic that gives enterprise buoyancy in the wake of any disruption, increasing its day-to-day flexibility to respond to a world that is changing fast and becoming ever less certain.”
When we launched this third annual study on Supply Chain Innovation in June 2020, the COVID-19 pandemic had disrupted the supply chains of almost every company around the world. In some cases, shutdowns had brought operations to a near halt; in other cases, companies were struggling to meet unexpected surges in demand. The key lesson learned so far from this experience is that creating supply chain resilience is imperative for future success and survival.
What changes will companies make in how they design and operate their supply chains to become more resilient? Which supply chain functions and processes will require the most changes? Which supply chain capabilities will become more important moving forward?
We explored those questions in this year’s survey to gain insight on how companies plan to make their supply chains more resilient. We also revisit questions from the past two years focused on customer experience and innovation: Do companies still believe that customer experience will overtake price and product as the number one brand differentiator? What factors are driving (and which ones are inhibiting) supply chain innovation efforts?
One of the phrases that has become popular this year is “We are in this together.” This is certainly true in supply chain management, where communication and collaboration between many trading partners — including manufacturers, retailers, distributors, and logistics service providers — is more urgent than ever. We hope the results of this research will provide useful insights and spark important conversations between all stakeholders to create smarter, better, and more resilient supply chains moving forward.
Please visit the research website for all of the key findings and recommendations.