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Building Supply Chain Resilience with Digitalization

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  • Tan, Kim Hua

    (Asian Development Bank Institute)

Abstract

How resilient is your supply chain? The fallout from the COVID-19 pandemic laid bare the vulnerability of global supply chains. One of the main business challenges that firms faced was the lack of end-to-end supply chain visibility, which impacts critical operational decisions. If firms are unable to see what is happening in their supply chains, they will not be able to manage them well. In the aftermath of the pandemic, firms have been incorporating the lessons learnt from the pandemic to reconfigure supply chains and increase visibility and responsiveness to withstand future unanticipated disruptions as well as predictable events such as adverse weather or logistics delays. We unpack how digitalization can support supply chain resilience and agility. The key questions are: a) What does it take to become more resilient? b) How can digital technologies play a part in providing greater certainty and flexibility to improve supply chain resilience? and c) How should firms go about implementing digital transformation? We discuss and explain the various dimensions, phases, and strategies of supply chain resilience. Resilience is understood as a function of a firm’s capability to have a conscious awareness of complex interconnected environments and the reconciling capacity to swiftly manage key vulnerabilities. Hence, increased end-to-end visibility of the supply chains using advanced technology and digitalization is vital for firms to pick up early signals of uncertainties, thereby gaining sufficient time to orchestrate operations and resources to withstand disruptions. However, supply chain visibility is not about a collection of digital tools. The research reveals that the building blocks of digitalization capabilities are a triangle of interconnected value levers comprised of a digital workforce, digital backbone, and digital twin. We conclude with recommendations for policy makers on how to best help firms realize their digital potential to boost supply chain resilience.

Suggested Citation

  • Tan, Kim Hua, 2023. "Building Supply Chain Resilience with Digitalization," ADBI Working Papers 1389, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:1389
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    References listed on IDEAS

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    1. Park, YoungWon & Hong, Paul & Roh, James Jungbae, 2013. "Supply chain lessons from the catastrophic natural disaster in Japan," Business Horizons, Elsevier, vol. 56(1), pages 75-85.
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    3. Tan, Kim Hua & Zhan, YuanZhu & Ji, Guojun & Ye, Fei & Chang, Chingter, 2015. "Harvesting big data to enhance supply chain innovation capabilities: An analytic infrastructure based on deduction graph," International Journal of Production Economics, Elsevier, vol. 165(C), pages 223-233.
    4. Kim Hua Tan & Guojun Ji & Chee Peng Lim & Ming-Lang Tseng, 2017. "Using big data to make better decisions in the digital economy," International Journal of Production Research, Taylor & Francis Journals, vol. 55(17), pages 4998-5000, September.
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    More about this item

    Keywords

    digitalization; supply chain resilience; capabilities; responsiveness;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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