Title: From Risk to Resilience: Learning to Deal With Disruption
Headings: From Risk to Resilience: Learning to Deal With Disruption
From Risk to Resilience: Learning to Deal With Disruption
What to Read Next
Coping With Supply Chain Risks
The Need to Cultivate Resilience
Supply Chain Vulnerabilities and Capabilities
About the Research
Identifying Resilience Factors and Linkages
Supply Chain Vulnerability Factors
Supply Chain Capability Factors
Putting the SCRAM Framework to Work
Finding the Zone of Balanced Resilience
Topics
About the Authors
References (18)
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Rabindranath Bhattacharya

Content: 15 min
Topics
Operations
Financial Management & Risk
Global Strategy
Supply Chains & Logistics
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Spring 2021 Issue
The eruption of the Eyjafjallajökull volcano in Iceland in 2010 wreaked havoc on air cargo shipments. Fortunately, DHL, the international shipping company, was able to redirect many of its flights to destinations in southern Europe that were less affected, and also to shift many deliveries to ground vehicles. In an interconnected, volatile, global economy, supply chains have become increasingly vulnerable. Disruptions — even minor shipment delays — can cause significant financial losses for companies and substantially impact shareholder value. Globalization has made anticipating disruptions and managing them when they do occur more challenging. The potential risks of disruptions are often hidden, and the potential impacts may not be understood. This often results in “black swan” events that can be understood only after the fact. As author Nassim N. Taleb has warned, “Our world is dominated by the extreme, the unknown, and the very improbable … while we spend our time engaged in small talk, focusing on the known and the repeated.” 1
Although companies originally moved production offshore to countries such as India and China to take advantage of lower labor costs, events like Iceland’s 2010 volcanic eruption and the Japanese tsunami in 2011 have shown that the vulnerabilities of extended supply chains are real and serious.