From Risk to Resilience Part 1: Navigating Risk in Supply Chains for Sustainable Success

Risk is an inherent aspect of every business and the interconnected supply chains they rely upon. While reacting to risk is a critical step in building resiliency, true success lies in the ability to embrace a proactive rather than reactive approach. It is imperative to develop an acute understanding of the ever-evolving environmental conditions and risks that permeate the supply chain landscape. Dr. Joseph Fiskel, from the Risk Institute at the Ohio State University (cited from ASCM), affirms that "classic risk management falls short in safeguarding companies against the turbulent currents of change and the increasingly frequent disruptions that assail us today." These words resonate deeply as new challenges, risks, and dependencies arise, compelling businesses to improvise, adapt, and fortify their operational frameworks with resilience. The question then arises: How can organizations achieve this paradigm shift?

Foremost, the cultivation of business resilience, through comprehensive risk management, demands commitment from top-level leadership, purposefully ingrained into every level of the organization. Transforming an organizational culture to embrace resilience can be a time-consuming endeavor, often necessitating the assistance of seasoned change management experts. To instill a sense of ownership and value within the workforce, an organization's leadership must wholeheartedly back this transformative journey. Resilience must transcend the status of a mere buzzword; it must be woven into the organization's identity. Once this identity takes shape and the organization achieves alignment, it is then time to embark on the strategic planning and construction that will solidify and amplify its resilience.

After organizational alignment, the next step toward constructing a robust management plan involves the identification of risks. This process necessitates a dual perspective, glancing backward to learn from past experiences, while intently gazing forward, scanning the horizon for future threats. Retrospective sessions serve as an invaluable starting point, providing an opportunity to pose and address pivotal questions. What risks and crises have previously been encountered? Do any of these risks still persist? What novel risks have emerged, fueled by shifting business landscapes, global environments, trade and transportation laws, or travel restrictions, and how do they affect the organization's supply chain?

Retrospective sessions also serve as a catalyst for thorough analysis. A comprehensive examination, encompassing both internal and external perspectives, is indispensable in identifying areas of excellence and pinpointing opportunities for improvement. Moreover, the organization must synchronize its understanding of existing processes, ensuring a solid footing for transitioning into a future state that embodies resilience. Taking preventative measures to tackle risks before they escalate into problems is a fundamental aspect of cultivating the proactivity necessary to become a resilient organization. In the upcoming installment, I will delve further into the art of navigating unforeseen problems through meticulous contingency planning, cross-functional training, and the reduction of single points of failure.