Should supply chain planning shift from resiliency into antifragility?

I think most people would agree that supply chains have experienced significant disruption in recent years. Most notably, according to respondents in the Gartner Supply Chain Disruption Management and Impact Survey, the COVID-19 pandemic was the single most disruptive event that their supply chain organization faced in the last two years.

The events of recent years have brought into question whether companies should create truly antifragile supply chains that could face a stressor such as a pandemic and emerge not untouched, but still intact, and even stronger than before the pandemic.

Antifragility is a concept developed and explored by Nassim Nicholas Taleb in his book, Antifragile: Things That Gain From Disorder. He defines antifragility as different from the currently popular resiliency philosophy. “Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

Emerging even better from disruption is a compelling proposition. Today, are supply chain planning’s technology, processes and people well-positioned to support an antifragile supply chain strategy? To move supply chain planning past resiliency and into antifragility, chief supply chain officers (CSCOs) should consider the following three areas.

Leverage digital technology

According to respondents in the Gartner Supply Chain Planning Business Case Study Survey, the top three goals for supply chain planning technology implementations or improvement initiatives are: Plan accuracy improvement, asset utilization improvement and better coping with uncertainty and variability.

The third objective is reflective of a resiliency mindset — the ability to recover quickly from plans going awry. Building off this goal, CSCOs should ponder if digital technologies applied to planning can move them beyond resiliency to antifragility.

As is often the case, many will conclude that this answer depends on multiple factors and varies by organization and scenario. When asked to rate the significance of the challenges digital initiatives currently place, or will place, on the supply chain, 63% of respondents to the Digital Business Impact on Supply Chain Survey rated both “integrating and coordinating with supply chain” and “managing supply chain planning” as top areas digital initiatives are causing, or will cause, challenges. The hope is that the challenges posed in the short- to medium-term are overcome and lead to digital supply chain planning being a key pillar to antifragile strategies.

Evaluate process post-disruption

To emerge from a stressful event with the greater capabilities proposed by antifragile suggests not only overcoming, but also learning from the process of overcoming the stressor. Evaluating the process immediately following the disruption enables supply chains to be more prepared next time, or even detect the likelihood of a stressor occurring, allowing the company to sidestep an event or cut it short right from the outset.

This is possible to a degree without technology. New product launch pre-mortems and product generational transition pre-mortems are two planning process examples that encourage immediate learning from prior failures, enables earlier detection of risks, and sets the stage for cutting NPI or discontinuation stressors off early or avoiding them altogether. Technology can assist here though, such as probability- and scenario-based planning solutions that can scale more manual processes to enterprise-level planning strengths.

Prepare your supply chain organization

Antifragile planning needs to leave room for people to make mistakes, learn from them and then come back stronger. In a bimodal planning environment, Mode 1 conditions and solutions are predicated on experience, prior knowledge and a pre-agreed approach, and Mode 2 solutions are more explorative or experimental in nature.

Organizations with more advanced levels of planning maturity are more likely to encounter challenges related to the lack of, or inadequacy of, suitable skill sets among planning staff. If your company is considering an antifragile strategy for high value or highly strategic product lines, what are your plans to upskill your planners’ capabilities? How might you need to adjust your process, metrics and technologies to enable planners to operate in Mode 2 antifragile environments? Now may be the best time to begin building the framework to move past resiliency in planning and into the next frontier.

Has the time come for supply chains to embrace antifragility? Supply chains across industries should begin to evaluate antifragile concepts and how they could help improve operations in uncertain environments. Similar to advanced levels of planning and other supply chain functional disciplines, in the near-term, it will be most applicable to high-value or highly strategic product categories such as vaccines and other forms of breakthrough technologies.

Janet Suleski, Director Analyst, Gartner Supply Chain

Janet Suleski is a director, analyst in Gartner’s Supply Chain Strategy and Planning Technology team. Janet’s research focus covers supply chain planning technologies for multiple industries. She also covers retail forecasting, allocation and replenishment technologies. She is responsible for guiding supply chain leaders through SCP technology roadmap development and provider selection. She can be reached at: [email protected]

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