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From Engineering to Ecology: How Amazing Is the Transformation of Supply Chain Resilience?
Since around the turn of the millennium, the concept of supply chain resilience has gradually entered people's horizons. Supply chain resilience is defined as “the ability of a supply chain to sustain, survive, adapt, or transform in the face of change.” The emergence of this concept, along with the gradual transfer of traditional risk management methods to the supply chain system, has made people begin to re-examine the vulnerability and response capabilities of the supply chain.
The complexity of the supply chain challenges the effectiveness of traditional risk management methods, especially in the process of troubleshooting numerous potential risks.
In the early stages of supply chain management, engineering resilience dominated: this view assumed that supply chains were closed systems that could be effectively controlled through careful design and planning. Business managers are expected to respond quickly to any type of disruption and restore systems to their desired state. By measuring supply chain survival and recovery times, managers can identify weak links in the overall system.
Redesigning the supply chain with an engineer's mindset and adding redundancy, such as multi-source supply, can enhance the resilience of the supply chain.
However, this strategy faces significant challenges in the medium to long term. When dealing with emergencies, this strategy of simply reacting quickly and restoring to the original state is not enough. As a result, emerging perspectives have emerged that emphasize the implementation of proactive adaptation strategies. These strategies are not limited to reactive measures, but also include redundancy, flexibility and adaptability to ensure that the supply chain continues to operate and respond flexibly when encountering disruptions.
Socioecological Resilience: A New Perspective
The concept of socio-ecological resilience is developed from ecological resilience and incorporates the social interaction of human decision-makers. The supply chain is now viewed as a social-ecological system, capable of continuously adapting to external environmental conditions and undergoing fundamental transformation through human foresight. Tesla’s supply chain model, for example, is an example of how the transition from internal combustion engines to electric motors relies on humanity’s ability to incorporate the long-term impacts of climate change into business models.
Compared with engineering resilience, social ecological resilience treats the supply chain as a fluid system, emphasizing adaptation and transformation rather than stabilizing in a fixed state.
With the impact of the COVID-19 pandemic, shipping issues and geopolitical conflicts, data shows that EU countries’ supply chain response capabilities are being challenged. During these events, the fragility of supply chains was laid bare, particularly dependence on foreign imports. For example, 44% of EU companies experienced transportation and logistics challenges when importing goods from China in 2023, while only 22% of companies that only imported within the EU reported similar difficulties. In order to reduce risks, the supply chain export model has also changed. The proportion of EU exports to the United States will rise to 21% in 2023, a significant increase from 14% in 2010.
Future supply chain resilience: challenges and opportunities
In the future, supply chain resilience will face more challenges, including climate change, geopolitical instability and changing consumer demand. However, these challenges also provide companies with opportunities for transformation and innovation. How to maintain the flexibility and resilience of the supply chain in an ever-changing environment has become the key to future competition for enterprises.
The era of sticking to traditional management models may be over; facing a complex and uncertain future, companies must consider how to flexibly adapt and transform.
Faced with such huge changes, how should companies reshape their supply chain strategies in order to survive and develop in future challenges?
