Resilience is on everybody’s mind. And spider webs, with their strength and flexibility, are nature’s perfect example of resilience. But most of us find spiders kind of creepy. Besides, strength and flexibility are just half the story. So let’s focus on the superhero Spider-Man, and his amazing ability to manage risk.
A supply network, with all its interconnections, reminds us of a spider’s web. At the same time, the web provides a perfect example of resilience. The silk material is famous for being exceptionally strong and stretchy. With its ingenious design, the web also withstands local damage. Holes do not destroy the entire structure. Of course, the ever-watchful spider springs into action at the first sign of distress. So does the superhero Spider-Man, who uses his spider-like superpowers to manage risk.
For procurement and supply chain professionals, the twin concepts of resilience and resilient supply chains top the list. What does this mean exactly? Resilience is the ability of material, such as stretchy spider silk, to absorb shocks. The web then returns quickly to the original shape. Similarly, a resilient supply chain is able to withstand negative impacts and recover quickly from disruption.
Identifying risk is a key first step in achieving resilient supply chains. Once you are risk aware, you can anticipate imminent danger and discern less immediate threats. This helps you react faster. Knowing about the potential threats means you can be proactive – act earlier – to mitigate any effects. This is why managing risk is essential to supply chain resilience.
To begin, let’s look at five R’s: robust, resist, respond, reduce, recover. These describe nicely how managing risk fosters supply chain resilience:
If an organization’s supply chain is not resilient, the company is likely to lose out to the competition. This is the primary factor behind the push for greater supply network resilience. To begin managing supply chain risk more efficiently, procurement and supply chain professionals need to look no further than The riskmethods SolutionTM.
Most spiders have eight eyes, which helps the arachanids simultaneously take in the big picture, along with small details. And having a total view of risk is kind of like having that intuitive spider-sense. It serves to protect your supply chain from otherwise unforeseeable attacks. In other words, you and your team can react almost instinctively to the slightest sign of disturbance to your network. And as procurement and supply chain professionals, you know that threats are lurking at every turn.
If you are unable to monitor, identify, assess and mitigate risk throughout your supply network, you remain vulnerable to threats and disruption. Hidden bottlenecks or diamond risks, when tier-1 suppliers buy from the same sub-suppler, can rip a hole through the operations of the entire network. The costs of disruption frequently range into the millions.
First, build supply chain resilience into the design. The ingenious structure of the spider web contributes to its toughness. And you need to have danger intuition, and a plan to manage risk. Spider-Man’s spider-like sense of premonition lets him anticipate threats. He’s ready to spring into action before danger strikes.
Similarly, procurement and supply chain professionals can adopt a comprehensive approach to managing supply chain risk. And use artificial intelligence to supply the superhuman powers. Here’s how companies can begin building more resilient supply chains:
As we’ve seen, resilience and agility are related. Using supply chain resilience assessment and management, for example, serves to evaluate how strong and flexible your network is. Threats are not only lurking at every turn, they also continually change. Spider-Man has incredible agility. By reacting so quickly, he catches his enemies off guard. So mastering risks as they evolve contributes to supply chain resilience and agility:
So, what are supply chain resilience benefits of managing risk? By managing risk, you can potentially avoid disruption, or your operations can rebound quickly. When you foster resilience and efficiency through comprehensive supply chain risk management, you gain competitive advantage. Who knows? Maybe the next time disaster strikes, you are the one who saves the day. Move over, Spidey.