Question

According to Chopra and Sodhi (2014), what are the dierences of supply chain effciency and supply chain resilience? Use one or two examples to critical discuss how a supply chain manager should improve supply chain resilience.

Answer 1

Chopra and Sodhi highlighted the problem caused due to supply chain disruption today supply chain disruption can be caused by natural calamities or man-made events which impacts the overall business of the firm. The differences in supply chain efficiency which is improving the company's financial performance are different from its resistance whose goals are to reduce risks, although they both require dealing with recurrent risks of demand fluctuation, to match its manager's needs to improve efficiency dealing demand and supply problem. Today building a resilient supply chain brings the extra cost to the company.

if one talks about the supply chain risks it has a disruptive factor that de establishes the whole manufacturing process as it causes supply chain cut in the middle, anything natural calamities or manmade events today can cause this type of disruption in the supply chain so one has to be sure about its supply chain. They should be resilient enough in the supply chain side as this disruption becomes extremely difficult for companies having a sole supply chain in their business. disruption risks on the supply chain network will cause the whole of the system to suffer as the company business will get affected, inventory supply will suffer so additional inventory has to be built which comes at a cost.

In order to counter this type of situation companies has to rely on multiple location supply chain inventory. e.g Zara Spain based retailer of accessories moved its supply chain to turkey and Asia they provided low-cost merchandise to Zara. This made Zara more profitable as Europe was costly to operate, also by this move if any disruption occurs in the supply chain process it will not get affected as only half of its merchandise is outsourced via supply chain network in Turkey and Asia. so choosing different geographical boundaries made Zara more reliant towards any disruption.

W.W Grainger inc. U.S based firms distribute industrial supply to business it has about 400 stores in the U.S for faster delivery it has kept faster-moving well at its stores and at various distribution centers and slower-moving items are warehoused at Chicago so the company becomes more resilient by segmenting its supply chains creating its backups.

So if managers improve planning and execution at the level of supply chain both efficiency and reliance can be achieved.