Managing supply chain risk and building sustainable resilience

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.