Managing supply chain risk and building sustainable resilience
Abstract
Global production networks that took shape to optimise costs and efficiency often contain hidden vulnerabilities — and external shocks exploit those weaknesses. The COVID-19 pandemic exposed existing challenges across business operations and thrust an organisation’s ability to adapt to dramatic shifts in supply and demand into the spotlight. However, even before COVID-19, a multitude of events in recent years temporarily disrupted production at many companies. All of this is occurring against a backdrop of changing cost structures across countries and growing adoption of revolutionary digital technologies in global manufacturing. Organisations need a new approach to manage risk and build resiliency. This research highlights the many options for strengthening value chain resilience in response to risk and evaluates strategies to minimise the growing cost of disruption, including opportunities arising from new technologies, strengthening risk management capabilities and improving transparency, building redundanc, reducing product complexity, and improving the financial and operational capacity to respond to shocks and recover quickly from them.
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Author's Biography
Knut Alicke is a partner at McKinsey & Company. Based in the Stuttgart office, he advises clients across advanced industries and global energy and materials on a variety of topics including supply chain management, digital supply chains and advanced analytics and supply chain transformations. Knut has written numerous articles on supply chain related subjects, is the author of a highly regarded book on supply chain management and is a professor at the University of Karlsruhe, teaching supply chain management.
Julian Fischer is an Expert Associate Partner at McKinsey & Company. He has spent the last decade in supply chain leading transformation programmes with global companies to improve service, productivity and capital. His expertise includes advanced analytics for sales forecasting, integrated planning and sales and operations planning (S&OP), improving supply planning processes as well as implementing the right organisational set-up for success.
Anna Lena Strigel is an Associate Partner at McKinsey & Company. She has supported clients on transforming their operations and supply chains for almost 20 years. Anna primarily works with clients in the automotive and assembly industry and helps them rethink their supply chains end-to-end. Beyond improving service levels, cash and costs, Anna focuses on change management and capability building. Apart from large-scale transformations, supply chain risk management is in the core of Anna’s expertise.
Citation
Alicke, Knut, Fischer, Julian and Strigel, Anna Lena (2021, September 1). Managing supply chain risk and building sustainable resilience. In the Journal of Supply Chain Management, Logistics and Procurement, Volume 4, Issue 1. https://doi.org/10.69554/ATHU4534.
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