Building resilience

From the March-April 2025 edition of Supply Chain Management Review.

March-April 2025

Inside this month's issue of Supply Chain Management Review, we look at the complicated process of managing parts for military aircraft and what private sector supply chain managers can learn. Plus, understanding…

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The new Trump administration has brought a heavy focus on tariffs. But for supply chain professionals, tariffs are just the latest in a long line of disruptions that must be managed. Geopolitics, natural disasters like the recent California wildfires, constant cybersecurity threats, and even the financial collapse of a supplier are just a few of the challenges chief supply chain officers face on a daily basis.

Sometimes, it is just too much. So, how do you go about building resiliency into your supply chain when faced with both known and unknown disruptions? It’s not easy, but a recent report from RR Donnelley indicates that companies are trying just that. As nearshoring and reshoring conversations continue to dominate global trade headlines, and President Donald Trump floats widespread tariffs, 97% of survey respondents said they plan to reengineer their supply chain in the next two years, with 30% planning a “total and complete reengineering.” As part of this, 69% of respondents are developing new relationships with alternative suppliers, 67% are increasing domestic sourcing, and 52% are seeking dual sourcing from geographically dispersed suppliers.

“Supply chain leaders are not just adapting, they are completely transforming their approaches to secure a more stable future,” said John Marrow, president, Supply Chain Solutions, RRD. “Our report shows that while challenges remain, the right mix of innovation, risk management and proactive re-engineering can turn these challenges into opportunities for growth and resilience.”

Inside the report

RRD’s Future-Ready Supply Chain report revealed that 93% of supply chain leaders are at least somewhat confident in their resilience against future disruptions, with 66% saying they are very confident. The report, which surveyed over 300 supply chain decision-makers, highlights key strategies businesses are using to build stronger, more adaptive supply chains.

While talent shortages remain a concern, the report found inflation and price fluctuations are greater concerns in the future. Nearly all respondents noted an interest in supply chain re-engineering. Digging into the data a little deeper, RRD found the reasons for this included customer demand for a wider range of products (43%), rising transportation costs (42%) and enhanced supply chain visibility and control (42%).

Core strategies for building resiliency

While many companies are seeking supplier or geographic diversification, that is just one approach to building a resilient supply chain. Technology investments, contingency planning, and collaboration are tried-and-true methods that assist, and remain so today.

“Organizations that leverage [artificial intelligence] to become more resilient will gain an enhanced ability to sense, recognize, and react to disruptions as businesses continue to navigate an increasingly complex supply chain landscape,” Darcy MacClaren, chief revenue officer, SAP Digital Supply Chain, said.

Writing in the January 2025 issue of Supply Chain Management Review, author Dr. Willow Yang, assistant professor of supply chain management at Sam Houston State University, and her co-authors noted the role supply chains now play as an important impetus to building resiliency.

“As supply chains are elevated to a critical component of national security and rise to the forefront of CEOs’ strategic priorities, a renewed emphasis is placed on transparency, resilience, diversification, and technological innovation,” they wrote. “Industry 4.0 technologies, including the Industrial Internet of Things (IIoT), blockchain, machine vision, robotics, artificial intelligence (AI), and machine learning, are at the heart of this shift. These transformative technologies are fundamentally reshaping how supply chains function, offering organizations unparalleled opportunities to bolster efficiency, transparency, and resilience through predictive analytics, automation, enhanced traceability, and real-time data integration.”

These technologies are helping supply chains prepare for and respond to disruption, which is important because disruption is now ever-present.

“What were considered global ‘black swan’ events just two years ago are now a constant consideration for supply chain planning and execution. Resiliency ‘actioned’ is moving from investments into people, processes and technology with AI playing a key role. Data normalization is going to be key, along with investing in Centers of Excellence,” explained Stephen Dyke, principal consultant manager, FourKites.

Courtney Rickert McCaffrey, EY’s Global Geostrategic Business Group Insights Leader, believes scenario planning plays a key role in preparing supply chains for unexpected disruptions. On a recent Talking Supply Chain podcast episode, Rickert McCaffrey noted the challenges supply chains are facing today given the world’s geopolitical climate.

“A lot of C-suite leaders really want predictability and certainty in the environment they face,” she said. “That’s actually more important … than maybe some of the specifics of what that environment is. Going forward, what we’ve seen is because of that uncertainty. A lot more C-suites and boards as well are turning to scenario analysis and tabletop exercises and other kinds of strategic foresight methodologies to try to … get their arms around [that uncertainty].”

Rickert McCaffrey noted that while companies can’t plan for every scenario, there are ways to leverage what they can plan for to benefit the organization when the unexpected occurs. Scenario planning plays a significant role so organizations can “preposition their resilience,” Rickert McCaffrey said, and identify “what they could change today, perhaps to create more resilience across a suite of potential scenarios related to that risk.”

It is about creating a playbook that can be quickly implemented, Rickert McCaffrey said. Part of that playbook is also about rethinking the supply chain, which gets back to the RRD survey.

“What we’re seeing is a lot of attention and desire to increase the resiliency of companies and global supply chains,” Rickert McCaffrey said. “So, governments and companies are doing that in different ways depending on their footprint and their sector. But what we’re seeing is some looking at localization in different ways, some looking at regionalization of supply chains.

“[It’s] thinking about, not necessarily moves that need to be made today, but how to plan for how the world could evolve in the future. It’s about identifying those actions or those strategies that you can take that would provide resilience across a variety of different potential scenarios.”

Building supply chain resiliency is not a one-off event. It requires ongoing investment in technology, investment in innovation, and investment in partnerships. And it comes down to the ability to build a playbook that has enough answers to navigate the unexpected.

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