Supply Chain Resiliency: The Three Rs (2024)

Supply chain resiliency is being prepared for the unexpected, responding and recovering to the original state, or moving to a new, more efficient, and resilient one. This can be defined in three states:Resist, Respond, and Recover.We call these the “3Rs” of Supply Chain Resiliency.

Let's take a closer look at the three Rs:

Resist

The goal should be to avoid or, at best, minimize damage caused by any disruption. The ability of a supply chain to reduce the time between a disruption happening and a full recovery is an indication of the level of resistance. One example of building resistance is theDiversificationof supplier and vendor base. This should be viewed as a cost of doing business, rather than inefficiency. Spreading products between suppliers, across countries, or moving to nearshoring, can provide continuity of product flow during disruptions.

Respond

How long does it take to respond to any form of disruption?

The speed any business responds to risks and disruptions in the supply chain dictates whether the business faces a small event or a major financial threat. A strategy of preparation and readiness is needed, making use of the available processes and technologies. One example is building a Supply Chain Digital Twin, enabling live data to be used for forecasting and scenario planning. This enables fast decision-making and pivoting in the real-world environment when disruptions hit.

Recover

The ability of a business to return to its original stability and performance levels, or even better, move to a new and improved state after a disruption, is vital. The time it takes to recover is directly proportional to the duration and severity of the disruption. Can this time be reduced or managed? Yes, investing in strategies to resist, respond, and recover ensures that a supply chain is resilient through its ability to adapt and change.

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