In today’s uncertain and turbulent markets, supply chain vulnerability has become an issue of significance for many companies.
As supply chains become more
complex as a result of global sourcing and the continued trend to ‘leaning-down’, supply chain risk increases.
The challenge to business today is to manage and
mitigate that risk through creating more resilient supply chains.
Supply chain managers strive to achieve the ideals of fully integrated efficient and effective supply chains, capable of creating and sustaining competitive advantage .
To this end they must balance downward cost pressures and the need for
efficiency, with effective means to manage the demands of market-driven service requirements and the known risks of routine supply chain failures.
management and control of internal processes together with more open information flows within and between organisations can do much to help.
However, in an age of lengthening supply chains serving globe-spanning operations, recent events around the world have provided frequent reminders that we live in an unpredictable and changing world .
Natural disasters, industrial disputes,
terrorism, not to mention the spectre of war in the Middle East, have all resulted in serious disruptions to supply chain activities. In these situations ‘business as usual’ is often not an option.
Modern commercial supply chains are in fact dynamic networks of interconnected firms and industries . No organisation is an island and even the most carefully controlled processes are still only as good as the links and nodes that support them.
All are dependent on efficient and reliable transportation and communication systems, an obvious point, but one that is often overlooked . These issues are the subject of the Centre for Logistics and Supply Chain Management’s on-going programme of research into supply chain risk and vulnerability.
The work presented in this paper forms part of the wider body of
research, funded by the UK’s Department for Transport, which aimed to increase the resilience of economic activity to all manner of potential threats . This paper reports on some of the findings and recommendations of the second stage of that programme. The work is empirically based and draws on insights from a number of important industries including food retailing, oil and petrochemicals, pharmaceutical, packaging, electronics, transport services and the distribution of automotive spares.
It also includes input from private and public sector
organisations involved in the provision of health care and in defense. In particular it focuses on the development of a managerial agenda for the identification and management of supply chain risk, with recommendations to improve the resilience of supply chains.
Supply Chain Resilience
When working effectively and efficiently modern supply chains allow goods to be produced and delivered in the right quantities, to the right places, at the right time in a cost effective manner.
Until recently the term ‘supply chain’ was not widely
used beyond the confines of academia, specialist sectors of industry and the professional management community.
Now, in the wake of a number of far-
reaching supply chain disruptions to economic activity it has crossed over into the everyday vocabulary of politicians, general managers and the wider public. The term ‘supply chain’ is itself a relatively new addition to the lexicon of management, first used in the early 1980s when writers coined the phrase to describe an emerging management discipline .
This new discipline was a
response to changes in prevailing trends in business strategy, which in turn demanded that internal functional self-interests be put aside to achieve a greater good – a more efficient organisation, creating and delivering better value to customers and shareholders.
It amounted to a...
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