Is your supply chain ready for what’s next?

This is an excerpt of the original article. It was written for the March-April 2021 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2021

Last night, my wife and I shared a socially distanced bonfire with a few friends. One was a retired physician who is spearheading the vaccination effort in the small New Hampshire city where I live. New Hampshire has had its challenges getting needles into arms like everywhere else, but it seems as if we’re breaking through the log jam. For example, between week 1 and week 3, they’ve tripled the number of people they can vaccinate in a day, and they’ve expanded from five days a week to seven days a week. At least for now, there has not been a shortage of vaccines. I know there is a long way to go, but you can feel it picking up speed. Call me…

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Despite these profound uncertainties, some firms will absorb future shock waves better, and navigate greater turbulence more adroitly, than their vulnerable rivals. Resilient supply chains can capitalize on organization-wide vigilance advantages and resilience. They have honed their capabilities for anticipating looming threats and emerging opportunities sooner than their rivals. Vigilance is the collective ability to detect, share, interpret and then act on early signals of change from inside and outside the organization.

This article will address two central questions underlying these vigilance advantages; First, what principles do vigilant firms follow to navigate their zones of uncertainty? And second, what are the distinguishing features that vigilant organization can orchestrate in order to become more resilient?

Improving organizational vigilance

Vigilant supply chain executives excel at seeing around corners, with a readiness to act decisively when the time is right. Also, they use this collective ability to get stronger, especially after having been surprised. They avoid the pitfalls of wishful thinking, willful blindness, paralysis or myopia when black or grey swans surround them. Vigilant firms and their strategic leaders deliberately orchestrate more robust and resilient supply chains by following three navigation principles drawn from best practice.

Navigation principle No.1. Vigilant supply chain leaders pay attention to what else might be coming over the horizon. While they are fire-fighting in the present by looking after their own people, taking care of their suppliers and customers and watching their cash, they are also looking ahead. While coping with CoronaChaos is all about the here and now of restoring disrupted supply chains and cutting fixed costs, some attention must be given to the next horizon, to be ready to pivot when the time is right.

The digital transformation of industries will not pause during the crisis, and will likely accelerate other digital transformations that were already underway. Fighting the pandemic gave a major boost to digital monitoring and mitigation, for example, with companies operating virtually as much as possible. With lower costs of capital and higher margins, vigilant firms can invest in new opportunities that surface, while their vulnerable rivals are forced to cut back. Following are some general questions that supply chain leaders and other C-suite executives should ask to push organizational foresight toward the next horizon.

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