A new publication from researchers at York University’s Schulich School of Business urges organizations to build six complementary capabilities to better prepare for the next supply disruption.
Supply disruptions are inevitable, but organizations can build the capability to avoid, mitigate and respond effectively. This is the focus of “Get Ready for the Next Supply Disruption,” published in the Sloan Management Review. The article was co-authored by M. Johnny Rungtusanatham, Canada Research Chair in Supply Chain Management and professor of operations management and information systems at Schulich, and David A. Johnston, George Weston Limited Chair in Sustainable Supply Chains and centre director of Schulich’s George Weston Ltd Centre for Sustainable Supply Chains. The authors also acknowledge the contribution of Schulich alumnus Parthiban Dhakshnamurthy, a recent graduate of the School’s Master of Supply Chain Management Program, toward their research.
According to the researchers, it’s not enough for companies to ask the question of: "What can be done to avoid supply disruptions in their risk planning efforts?" Companies must also ask the complementary question of: "What can be done to manage “for” the eventuality of being disrupted?" Using the experience of Loblaws, Canada’s largest retailer and private employer, the authors discuss the strengths and weaknesses of managing for supply disruption revealed to many organizations during the COVID-19 pandemic.
Organizations, whether private or public, manufacturing or service, must build six so-called ADDAPT capabilities to be better prepared for the next crisis-triggered supply disruption, argue the researchers. The six capabilities – anticipate, diagnose, detect, activate resources for, protect against, and track threats – together constitute the ADDAPT framework, which is based on the co-authors’ research into how public agencies and private enterprises experience and respond to supply disruptions like the COVID-19 pandemic.
With these ADDAPT capabilities, organizations can anticipate supply disruptions triggered by known risks and, just as importantly, imagine supply disruptions triggered by unknown but knowable risk factors. Organizations can be warned in a timely manner as to when and where supply disruptions occur; diagnose supply disruptions and their root causes effectively, as well as efficiently and effectively identify recovery options; marshal resources to bring interrupted supply back to expected levels; implement interventions to block-and-tackle against supply disruptions and their associated risks; and track and monitor leading supply disruption warning indicators.
However, the co-authors also note that building ADDAPT capabilities requires an investment in people and digital technology, as well as tested operational “playbooks” to guide rapid response and collaboration with suppliers.
Organizations can benchmark their preparedness for future supply disruptions – whether from pandemics, climate change or global conflict – by assessing the presence and maturity of the six ADDAPT capabilities, say the co-authors.