Companies need to build resilience of supply chains in preparing for disruptions while at the same time guarding against complacency, refraining from investing disproportionately and also weighing the trade-offs.
This was the central message that emerged at a virtual discussion on Supply Chain Resilience hosted recently by Synergia Foundation in partnership with the Centre for Transportation and Logistics at the Massachusetts Institute of Technology (MIT).
Observing that while the number of sources of risks were unlimited, the outcome of the risk events were not, MIT Deputy Director Jim B. Rice said disruptions mainly lead to a loss of capacity to acquire materials, to move products, communicate, conduct internal operations, requisition human resources, access funds and distribute products to customers and consumers.
Pointing out that the disruption due to COVID-19 was quite distinct, he expected to see an increased focus on resilience post pandemic. And while such efforts had already been underway since 9/11, Mr. Rice said the process would be accelerated, with a shift towards risk balancing the supply chain also on account of the trade war.
Companies should avoid spending big during disruptions and then turning complacent, he said, stressing the need to create capabilities in the supply chain through integrated business planning.
Director of IIM Udaipur Janat P. Shah said the geo-political situation had already triggered the changes towards making supply chains resilient. As they make changes and invest on building capabilities, companies need to make their customers understand the efforts.
In building more resilience, companies need to ensure against wasteful investment and ask themselves whether the customer will pay for the resilience that was built, he said.
Kishore Jayaraman, president of Rolls Royce, India and South Asia, said post COVID-19, companies were going to look at business continuity plans (BCP) very differently.
Synergia Foundation founder and president Tobby Simon, Dynamatic Technologies CEO and managing director Udayant Malhoutra, and DHL Express India senior vice-president and MD Subramanian R.S. also participated in the discussion.