Building resiliency in the supply chain plays a crucial role in the overall business strategy to minimize potential disruptions with production and delivery in a manufacturing environment. Disruptions can occur from many sources and can be classified into categories, including “natural events, external—man-made events, and internal—man-made events, and can be of varying severity based on the length of time of the disruption or the overall breadth of the event (Macdonald & Corsi, 2013). Important business continuity factors to consider, when developing a disruption preparedness plan, are to explore business concepts that involve supply chain “risk management, mitigation, crisis management, supply chain resilience, supply chain security, business continuity planning, and sustainability” (Macdonald, 2008). Exploring each topic will lend to building a framework for effectively preparing and planning for disruption or threat to the supply chain.

It is often helpful to build a business case example to provide insight and lends to a more productive discussion on topics such as building a survival strategy for a business that loses a supplier of their primary product. Let’s say that we have a company that manufactures shoelaces for Adidas shoes. Our issue is that our vendors are unable to supply our shoelace factory with aglets (the little plastic ends on the shoelaces) which is a critical component for our manufacturing process. Given the situation where our three preferred vendors are unable to deliver the aglets as defined in our ‘just-in-time’ manufacturing and supply chain strategy, we will need to have a plan for ensuring our manufacturing business process can be sustained. I see a couple of possible solutions that can be developed into our business continuity plan so that we can continue our manufacturing process.

First, we could build a buffer by increasing our stock of aglets to the point where we can have enough to stay 1-2 weeks ahead of demand. This solution would be contingent upon whether or not our warehouse has the space to accommodate the excess supply and whether or not we can bear the financial burden involved with the purchase of the aglets. Another strategy could be to source additional vendors that will be available when needed on a contract basis, or that can warehouse and wholesale the goods on our behalf. This would build resilience in our supply chain by offering an optional supply stream of aglets in case the primary sources are unable to provide. A final strategy for consideration could be to develop a product line that doesn’t require aglets in the shoelace production or even develop an alternate solution for shoelace ends that can be effectively integrated into our product mix that satisfies the requirements from Adidas. This would be a viable solution given a scenario where the supply of aglets was simply nonexistent and all previous solutions have failed or have been exhausted. Many times in business supply disruptions can foster innovation and adaptation in order to survive and the business may actually benefit from the experience.

Question to consider….

Can you think of an example of how a business can be positively affected by a supply chain disruption through forced innovations of their primary product?