Resilience, the best asset of supply chains in times of crisis?

Sustainability

publication date 24/01/2022

Everyone has seen the shortages caused by the COVID-19 health crisis in his own country.  We can recall the problems caused by a sudden and unprecedented demand for masks, hydroalcoholic gel, etc. in supply  chains the medical sector. However, we cannot focus and conclude only  on  the locallevel. Supply chains are now globalized.

The COVI D-19 pandemie  clearly  shows  the  lack of  resilience  of  supply  chains  and  the  impact that disruptions can have on a global scale when individuallinks are faulty. 

For example supply chains in the automotive and electronics sectors are heavily impacted by component shortages linked to non-European supply chain actors. The trends for the coming months are not positive. What lessons can we learn from  these case studies to make supply chains more resilient while  the  health  crisis is not  yet behind  us and especially since other  crises are bound  to occur in the future?

A simple search on google scholar brings up more than 17,000 results concerning supply chain resilience  and COVID-19. So much  so that  more than  a  dozen literature reviews  on  these  two years of academie production have already been published  (e.g. Golan et al., 2020; Chowdhury  et al., 2021; Sajjad, 2021). This shows  the  interest of the academie community regardless of the country or continent. Many sectors are examined: manufacturing, agribusiness, energy,   logistics, etc. These case studies  focus on the United States, Iran, lndia, and China, but  also on other Asian and  European regions. The supply  chains of Central and Latin America and Africa are less explored.  Research in Africa is mainly focused on agribusiness  supply  chains in countries  such as Ghana, South Africa, Kenya, and Nigeria (Nordhagen  et al, 2021).

Academic publications seek to identify good practices  to make supply chains more resilient by drawing lessons from the Covid-19.  El Baz and Ruel (2021), for example, study  470 French companies and show that supply chain risk management can mitigate disruptions and foster resilience and robustness during a crisis like this one. Another study of jordanian firms highlights that continuous improvement enhances resilience (Zighan  and   Ruel,  2021).  Quieroz  et al (2021) based on the study of Brazilian companies and indicate that in case of major disruptions supply chains in emerging countries need to focus on managing their resources. They need to reorganize their often-limited resources according to the disruptions generated to increase resilience.

Other studies emphasize diversification, localization, regionalization, and collaboration with stakeholders. These recommendations also echo the sustainable  development goals (SDGs). Being closer to consumers, using local raw materials, and simplifying  the supply  chain meet both  social and environmental objectives. If making a supply chain more resilient allows it to become more sustainable or vice versa

Finally, lndustry  4.0 is put forward as a solution  by much  research. Innovation is indeed  highlighted as a resilience factor. Quayson et al (2020) analyze a cocoa  supply  chain in Ghana and advocate digital transformation. They extrapolate  their results to other countries and supply chains with smallholders. This transformation requires the involvement of other stakeholders  such as NGOs, governments, or local communities. Another example is the study of supply chains in the omnichannel retail  sector in South Africa (Weber, 2020). This sector must adapt  to the migration of these customers to online sales.

lvanov (2020) goes further and proposes a holistic view of resilience. He defines the concept ofviability that goes beyond resilience by including agility, resilience, and  sustainability. Supply chains must a dapt -agility- to absorb disruptions-resilience-and survive-sustainability. While resilience is linked to a supply chain, viability is considered at the level of networks of connected supply chains.

ln  our  globalized  economy  and  in  times   of crisis, it is not about  developing the  resilience of a supply chain but the viability  of its entire ecosystem!

Sources

Chowdhury, P., Paul,  S. K., Kaisar,  S., &  Moktadir, M. A. (2021). COVID-19 pandemie related supply chain studies: A systematic review. Transportation Research     Part E: Logistics  and Transportation Review, 102271.

El Baz, j., & Ruel, S. (2021). Can supply chain risk management practices mitigate  the  disruption impacts on  supply  chains' resilience and robustness? Evidence   from an empirical  survey in a COVID-19 outbreak era. International journal of  Production Economies, 233,107972.

Golan,   M.  S., jernegan,  L.  H.,  &  Linkov, 1. (2020). Trends   and applications of resilience analytics in supply chain modeling: systematic literature review in the context of  the  COVID-19 pandemie. Environment Systems and Decisions, 40, 222-243.

lvanov, D. (2020). Viable  supply chain model: integrating agility, resilience  and sustainability perspectives-lessons from  and thinking  beyond the  COVID-19 pandemie. Annals of Operations Research, 1-21.    

Nordhagen, S., lgbeka, U., Rowlands, H., Shine, R. S., Heneghan, E., & Tench, j. (2021). COVID-19 and small enterprises in the food supply chain: Early impacts and implications for  longer-term food system resilience in  low-and middle-income countries. World Development, 141,105405.

Quayson, M., Bai, C., & Osei, V. (2020). Digital inclusion for resilient post-COVID-19  supply chains: smallholder farmer perspectives. IEEE Engineering Management Review, 48(3),104-110.

Queiroz, M.  M.,  Wamba, S. F., &  Branski, R. M. (2021). Supply chain resilience during the COVID-19: empirical evidence from an emerging economy. Benchmarking: An International journal.

Sajjad, A. (2021).The COVID-19 pandemie, social sustainability and global supply chain resilience: a review. Corporate Governance: The International journal of Business in Society.

Weber, A.N.(2021). Responding to supply chain disruptions caused by the  COVID-19 pandemie: A Black Swan event for omnichannel retailers. Journal of Transport and Supply Chain Management, 15,16.

Zighan, S., & Ruel, S. (2021). SMEs' resilience from continuous improvement lenses.  Journal of Entrepreneurship in Emerging Economies

This article is also published in Africa SC Magazine (n°1 15-January-15 March 2022)

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