Supply chain resilience

Supply chain resilience is "the capacity of a supply chain to persist, adapt, or transform in the face of change". It is a popular concept within contemporary supply chain management.

Origins

Around the turn of the millennium, supply chain risk management practitioners attempted to transfer traditional risk management approaches from the "company" system to the "supply chain" system. However, the scalability of traditional risk management steps (identification, assessment, treatment and monitoring of risks) quickly reaches its limits: while it is entirely possible to identify all conceivable risks within a company; a supply chain often consists of thousands of companies – the attempt to identify all possible risks in this system is therefore much more complex, if not impossible. It has therefore been argued that the complexity of supply chains requires complementary measures such as supply chain resilience. Resilience is the ability to cope with all sorts of change, and is thus less about the identification of specific risks but more about the characteristics of the system.

Interpretations of supply chain resilience

Engineering resilience

For a long time, the interpretation of resilience in the sense of engineering resilience prevailed in supply chain management. It is implied here that supply chain is a closed system that can be controlled, similar to a system designed and planned by engineers (e.g. subway network). According to C. S. Holling (1996), engineering resilience focuses on stability near an equilibrium steady state, where resistance to disturbance and the speed of return to equilibrium are used as measures of resilience. The expectations placed on managers come close to those placed on engineers, who should react quickly in the event of a disturbance in order to restore the system's ideal and original state as quickly as possible. A popular implementation of this idea in supply chain management is given by measuring the time-to-survive and the time-to-recover of the supply chain, allowing to identify weak points in the system. Acting like an engineer by redesigning the supply chain like on the drawing board, often by creating redundancies (e.g. multiple sourcing), strengthens resilience. In the short term, a supply chain can be viewed as a relatively rigid system. The idea of persistence of a supply chain that follows from engineering resilience therefore makes sense in the short term. However, this approach has mid to long-term limits.

Socio-ecological resilience

The resilience of social-ecological systems changes in the four phases of each adaptive cycle. This applies at all levels of a panarchy separately.

Social-ecological resilience goes back to ecological resilience, adding to it human decision-makers and their social interactions. A supply chain is thus interpreted as a social-ecological system that – similar to an ecosystem (e.g. forest) – is able to constantly adapt to external environmental conditions and – through the presence of social actors and their ability to foresee – also to transform itself into a fundamentally new system. This leads to a panarchical interpretation of a supply chain, embedding it into a system of systems, allowing to analyze the interactions of the supply chain with systems that operate at other levels (e.g. society, political economy, planet Earth). For example, Tesla's supply chain can be described as resilient because it reflects the transformation from internal combustion engines to electric engines, which is based on the ability of human actors to foresee long-term changes in the planet in the context of the climate crisis and to implement them in a business model. In contrast to engineering resilience, the supply chain is not interpreted as a system that needs to be stabilized in a fixed state (focus: persistence), but as a fluid system or even as a fluid process that interacts with the rest of the world (focus: adaptation or even transformation). This aligned with C. S. Holling (1973), who distinguished between resilience and stability as separate properties of dynamic systems. Subsequent research has treated resilience as an inherent characteristic of dynamic systems, and this perspective has been applied to supply chains, with scholars extending ecological resilience concepts to the study of supply chain resilience (SCRES).

Recent studies and data have examined how European Union firms responded to significant supply chain disruptions caused by the COVID-19 pandemic, maritime transport issues, and geopolitical conflicts. These events exposed the vulnerabilities of EU supply chains, particularly their reliance on foreign imports.

For example, in 2023 44% of EU firms who imported from China experienced transport and logistics challenges, while only 22% of the firms that imported solely within the EU reported similar numbers.

In response to challenges like these, trade patterns have shifted. The share of EU exports directed to the US increased to 21% in 2023, compared to a 14% in 2010. This is in order to mitigate risk and enhance supply chain resilience.

Reactive vs. proactive approaches

Two broad perspectives on supply chain resilience have been identified in the supply chain management literature: resilience as a reactive process and resilience as a proactive capability. The reactive perspective emphasizes the ability of supply chains to respond to and recover from disruptions after they occur, building on concepts such as redundancy, safety buffers, and risk mitigation. This approach typically involves advance preparation and contingency planning to facilitate an effective response to disruptive events.

By contrast, the proactive perspective views resilience as the ability to anticipate, monitor, and mitigate the effects of future disruptions before they occur. Proactive resilience involves identifying potential risk factors, assessing their implications for supply chains, and implementing preventive or mitigating measures in response to anticipated changes in the business environment. These reactive and proactive perspectives reflect different conceptualizations of resilience that have emerged from disciplines such as engineering, ecology, and psychology.

See also

• Niko Paech

Literature

• Sheffi, Yosef (2007). The resilient enterprise: overcoming vulnerability for competitive advantage: [with a new preface for the paperback edition] (1. MIT paperback ed.). Cambridge, Mass. London: MIT Press. ISBN 978-0262693493.
• Walker, Brian H. (2020). "Resilience: what it is and is not". Ecology and Society. 25 (2) art11. Bibcode:2020EcSoc..25Tr.11W. doi:10.5751/ES-11647-250211.
• Wieland, Andreas; Durach, Christian F. (July 2021). "Two perspectives on supply chain resilience". Journal of Business Logistics. 42 (3): 315–322. doi:10.1111/jbl.12271. hdl:10398/0a703fa5-c14c-4c2a-b427-9640a30b6c09.
• Paravano, Alessandro; Locatelli, Giorgio; Trucco, Paolo (2025). "Drivers and Barriers in Shaping Resilience Projects: an Investigation in the Space Economy". IEEE Transactions on Engineering Management. 72: 2783–2797. Bibcode:2025ITEM...72.2783P. doi:10.1109/TEM.2025.3568298. hdl:11311/1297756.