By Mr.Nitin Choudhary
Resilience is defined as the ability of a person, system or organization to recover to normal when subjected to external force or disruption. The same definition extends to Supply Chains.
It’s the capability of a Supply chain to achieve its intended goals even in the face of changes & disruptions. In theory, a total resilient supply chain will absorb most of the impact and recover to reach its target. But hardly any organization relies on a totally resilient supply chain because usually these impacts come at a cost (sometimes which even results in loss of business). Inherent in the definition itself, resilient supply chains contradict the lean philosophies.
On the other hand, an agile supply chain is defined as a supply chain which is quick to adapt to the external changes. Instead of absorbing the risk like a resilient supply chain, an agile supply chain steers around the risks quickly. But it’s also a fact that all this steering around the risks comes at a cost to the supply chain. An agile supply chain to be truly agile has to let go of the benefits coming from the economies of scale to maintain its agility for risk avoidance.
Now most organizations settle for a trade off between the level of resilience and agility in their supply chains depending on the product, market, criticality and some other business factors.
As a general thumb-rule, agile approach solves more of external disruptions and resilience in the supply chain focuses more on internal disruptions.
As represented in the figure below, diagram “A” shows Agility handling Opportunities and disruptions through threats and resilience handling internal disruptions.
In diagram “B”, this is what most supply chains strive to be. In this case resilience is defined as something which integrates agility into it & handles both external & internal disruptions.