Can Disasters Make Your Supply Chains Stronger?

Yes, according to Yossi Sheffi, director of the MIT Center for Transportation and Logistics. In his new book," The Resilient Enterprise", published Oct. 1, he explains that organizations can become more resilient and even gain strength from natural disasters, labor strikes and supply chain failures.

According to Sheffi, resilience can be achieved either through redundancy or through building in flexibility. Extra inventory, however, is not the answer. Sheffi suggests that "increasing supply chain flexibility can help a company not only withstand disruptions but also better respond to the day-to-day vagaries of the marketplace."

He recommends these steps to build flexibility in the supply chain:

  • Develop the ability to move production among plants, use interchangeable and generic parts in many products and cross-train employees.
  • Use concurrent processes of product development, ramp up and production/distribution.
  • Design products and processes for maximum postponement of as many operations and decisions as possible in the supply chain.
  • Align procurement strategy with supplier relationships.

MIT Center for Transportation and Logistics

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