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Strong Supply Chains Through Resilient Operations

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Strong Supply Chains Through Resilient Operations

Five Principles for Leaders to Win in a Volatile World

Wiley,

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Design your supply chain for resilience in an increasingly unpredictable environment. 

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9

Qualities

  • Analytical
  • Applicable
  • Concrete Examples

Recommendation

Companies have spent decades striving for lean supply chains and cutting supply chain costs. But the COVID-19 pandemic, wars, and natural disasters led to shortages of products, parts, and raw materials. This demonstrated that cost-cutting is risky in a volatile environment of geopolitical tensions, social unrest, and extreme weather.  Global management consultants Suketu Gandhi, Marc Lakner, Sherri He, Tiffany Hickerson, and Michael F. Strohmer explain that businesses should build resilient, flexible supply chains. They outline a comprehensive program for cultivating a supply operation that can adapt to sudden shocks and continue to thrive, whatever the world throws at them.

Summary

The supply shocks of the early 2020s illustrate the need for supply-chain resilience.

For decades, many companies made cost-cutting a primary component of their supply-chain strategy. Among other steps, that involved outsourcing manufacturing to countries with low labor costs. This strategy can be effective in a stable business environment, and many companies bet that relative stability would persist into the future.

These businesses proved unprepared for an avalanche of destabilizing events, including the COVID-19 pandemic, labor shortfalls, geopolitical crises, and natural disasters. All these disruptions confirmed that business leaders must make sure their operations are resilient and sufficiently adaptable to cope with a chaotic world.

Prepare your operations for a range of potential threats.

In today’s VUCA (volatile, uncertain, complex, and ambiguous) environment, business survival requires a holistic view of corporate operations. Your supply chain should be one component of a value chain that includes product planning, consumer research, manufacturing, logistics, and more.

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About the Authors

The authors are with A.T. Kearney, where Suketu Gandhi is a global co-leader of the strategic operations practice. Marc Lakner is managing director for Germany, Austria, and Switzerland. Sherri He is managing director of the Greater China unit. Tiffany Hickerson is a partner in the strategic operations practice, where Michael F. Strohmer is the global co-leader. He is also the leader for procurement. 

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