The idea of supply chain resilience is a recent 21st century phenomenon which has become more important since the effects of the financial crisis which are still being felt six years later. The New Normal caused by that crisis illustrates the importance of supply chain resilience in today's interdependent global economy.
The World Economic Forum’s 2013 “Building Resilience in Supply Chains” report stated: “Resilience is the ability of a global supply chain to reorganize and deliver its core function continually, despite the impact of external and or internal shocks to the system.”
You can make a case that resiliency is a must-have in today’s supply chain because volatility is always around the corner for most organizations. A recent sponsored research report titled “The Resilient Supply Chain”, authored by Lisa Harrington, associate director, Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland, drew many conclusions, amongst them that the traditional systems no longer work in an interconnected world. “Volatility has emerged as a systemic condition, disruption occurs at any time, often with unprecedented magnitude, and there are no longer discrete sets of risk events with periods of stability in between,” Harrington said.
In my experience, the concept is still in its early stages but to achieve supply chain resilience there are five basic components for success that I will term CHAAF (Celerity, Hardiness, Adaptability, Agility, and Flexibility). These three articles will outline those achievable components and confirm the benefits of achieving supply chain resilience.
Celerity
Supply chain celerity - rapidity of motion or action - is a necessity as today’s supply chains move at a higher velocity than in the past and extensive supply chain communications require trading partners to be more agile and responsive to your business’s needs. The timely and accurate exchange of information among trading partners is more important than ever. There is little or no tolerance for errors or bottlenecks - and anything that is not immediately corrected can result in costly delays, penalties or potential cessation of activities for transportation providers and your organization’s trading partners.
Your supply chain is no longer bound by geography. The need to find economies of scale and lower costs will drive a further need for supply chain synchronization. Clearly, data needs to be captured and classified in a consistent manner at a detailed, actionable level. Organizations should not only be managing the risk at each location within their own supply chains but should also consider their key trading partners’ supply chains. End-to-end supply chain visibility and immediate corrective actions are necessary for reducing risk and financial exposure across the supply chain system.
According to the whitepaper “Missing Link to SC Success” published by GT Nexus, “80% of the data a company needs resides beyond its four walls, in the systems of global partners.”
Celerity really matters! Quicker response times help organizations react to customer needs faster and hence gain or hold market share, and as well to withdraw, when necessary. It’s not whether you can see the same opportunities as other organizations, or can even bring together the right acumen with the right decision-maker to make it happen; it is the speed of action that truly matters. As Cleopatra suggested, “Celerity is never more admired than by the negligent.”
Therefore, transforming raw data into useful, real-time business intelligence (BI) goes hand in hand with smarter, celeritous decision making. The challenge for the end-to-end supply chain, as a whole, is finding efficient and timely business intelligence, while ensuring that all versions of the data emanating from various information sources are both consistent and correct. BI systems are only as good as the data contained within them; therefore the quality of the reporting depends heavily on the quality of the information.
While it is human nature to avoid exposing potential problems to trading partners, fact-based information-collection tools can make supply chain risks visible and facilitate effective risk mitigation efforts. Constant supply chain celerity and communication are the keys to managing a global supply chain that is changing by the minute. In short, Celerity means that you are able to synthesize external and internal data and rapidly take action to minimize the impact of a supply chain disruption and can quickly adjust and respond to the market and economic conditions at hand.
In Parts 2 and 3 of this series, we’ll look at the remaining components of CHAAF - Hardiness, Adaptability, Agility, and Flexibility.
This article is part of the monthly series authored by the Institute for Supply Management’s Logistics & Transportation Group Board Members, who are current practitioners, consultants, trainers, and educators. In future columns, they will continue sharing their views on a number of Supply Chain and Professional Development topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 212-8200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
The World Economic Forum’s 2013 “Building Resilience in Supply Chains” report stated: “Resilience is the ability of a global supply chain to reorganize and deliver its core function continually, despite the impact of external and or internal shocks to the system.”
You can make a case that resiliency is a must-have in today’s supply chain because volatility is always around the corner for most organizations. A recent sponsored research report titled “The Resilient Supply Chain”, authored by Lisa Harrington, associate director, Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland, drew many conclusions, amongst them that the traditional systems no longer work in an interconnected world. “Volatility has emerged as a systemic condition, disruption occurs at any time, often with unprecedented magnitude, and there are no longer discrete sets of risk events with periods of stability in between,” Harrington said.
In my experience, the concept is still in its early stages but to achieve supply chain resilience there are five basic components for success that I will term CHAAF (Celerity, Hardiness, Adaptability, Agility, and Flexibility). These three articles will outline those achievable components and confirm the benefits of achieving supply chain resilience.
Celerity
Supply chain celerity - rapidity of motion or action - is a necessity as today’s supply chains move at a higher velocity than in the past and extensive supply chain communications require trading partners to be more agile and responsive to your business’s needs. The timely and accurate exchange of information among trading partners is more important than ever. There is little or no tolerance for errors or bottlenecks - and anything that is not immediately corrected can result in costly delays, penalties or potential cessation of activities for transportation providers and your organization’s trading partners.
Your supply chain is no longer bound by geography. The need to find economies of scale and lower costs will drive a further need for supply chain synchronization. Clearly, data needs to be captured and classified in a consistent manner at a detailed, actionable level. Organizations should not only be managing the risk at each location within their own supply chains but should also consider their key trading partners’ supply chains. End-to-end supply chain visibility and immediate corrective actions are necessary for reducing risk and financial exposure across the supply chain system.
According to the whitepaper “Missing Link to SC Success” published by GT Nexus, “80% of the data a company needs resides beyond its four walls, in the systems of global partners.”
Celerity really matters! Quicker response times help organizations react to customer needs faster and hence gain or hold market share, and as well to withdraw, when necessary. It’s not whether you can see the same opportunities as other organizations, or can even bring together the right acumen with the right decision-maker to make it happen; it is the speed of action that truly matters. As Cleopatra suggested, “Celerity is never more admired than by the negligent.”
Therefore, transforming raw data into useful, real-time business intelligence (BI) goes hand in hand with smarter, celeritous decision making. The challenge for the end-to-end supply chain, as a whole, is finding efficient and timely business intelligence, while ensuring that all versions of the data emanating from various information sources are both consistent and correct. BI systems are only as good as the data contained within them; therefore the quality of the reporting depends heavily on the quality of the information.
While it is human nature to avoid exposing potential problems to trading partners, fact-based information-collection tools can make supply chain risks visible and facilitate effective risk mitigation efforts. Constant supply chain celerity and communication are the keys to managing a global supply chain that is changing by the minute. In short, Celerity means that you are able to synthesize external and internal data and rapidly take action to minimize the impact of a supply chain disruption and can quickly adjust and respond to the market and economic conditions at hand.
In Parts 2 and 3 of this series, we’ll look at the remaining components of CHAAF - Hardiness, Adaptability, Agility, and Flexibility.
This article is part of the monthly series authored by the Institute for Supply Management’s Logistics & Transportation Group Board Members, who are current practitioners, consultants, trainers, and educators. In future columns, they will continue sharing their views on a number of Supply Chain and Professional Development topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 212-8200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
