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resilience

Recent global supply chain disruptions, primarily due to the COVID-19 pandemic and geopolitical tensions, have highlighted the need for enhanced supply chain resilience. Organizations must develop dynamic capabilities to adapt and recover from these disruptions, as the interconnected nature of supply chains amplifies risks across networks. A comprehensive resilience agenda is essential for long-term sustainable growth, requiring leaders to understand dependencies and mitigate vulnerabilities while maintaining global interconnections.

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6 views

resilience

Recent global supply chain disruptions, primarily due to the COVID-19 pandemic and geopolitical tensions, have highlighted the need for enhanced supply chain resilience. Organizations must develop dynamic capabilities to adapt and recover from these disruptions, as the interconnected nature of supply chains amplifies risks across networks. A comprehensive resilience agenda is essential for long-term sustainable growth, requiring leaders to understand dependencies and mitigate vulnerabilities while maintaining global interconnections.

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a.makhnova
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© © All Rights Reserved
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Introduction:

Supply Chain (SC) disruptions that businesses have recentlyencountered have no parallel in
the recent history of theworld economy (Bloomberg 2021). The Covid-19 pandemic,radical
changes in the global consumer market, and geopolit-ical shifts are among the primary
external causes of SC disrup-tions (Bahrami and Shokouhyar 2022; Spieske and Birkel2021).
Recent disruptions in national and global SCs have hitnumerous nerve centres of the global
economy, such asadvanced semiconductor chips, medical goods, and energysupply and
distribution (Bloomberg 2021). Experts believemost contemporary SCs have overfocused on
pushing prod-uctivity and efficiency and left resilience by the wayside(Tortorella et al. 2022;
Zouari, Ruel, and Viale 2021). Althoughthe concept of Supply Chain Resilience (SCR) is a
few decadesold, current SC disruption risks have motivated academia torethink the strategies
for rebalancing SC efficiency and resili-ence (Mubarik, Naghavi, et al. 2021; Naz et al.
2022).
The Covid-19 crisis andworldwide disruption of SCs across various business sectorsperfectly
showcased the importance of SC resilience capabil-ity building (Peng et al. 2021; Spieske
and Birkel 2021). As aresult, understanding the mechanism through which SCs canenhance
their resilience has recently gained significant atten-tion within the operations and supply
chain managementdisciplines.
Ghobakhloo, M., Iranmanesh, M., Foroughi, B., Tseng, M.L., Nikbin, D. and Khanfar, A.A., 2025.
Industry 4.0 digital transformation and opportunities for supply chain resilience: a comprehensive
review and a strategic roadmap. Production planning & control, 36(1), pp.61-91

Global supply chains (SCs) are still grappling with the effects of recent
disruptions, most notably the COVID-19 pandemic and the ongoing war
between Russia and Ukraine. These events have exacerbated challenges
by increasing commodity prices, disrupting transportation networks, and
introducing significant uncertainties into supply chain operations.

Al Aziz, R., Arman, M.H., Karmaker, C.L., Morshed, S.M., Bari, A.M. and Islam, A.R.M.T., 2025.
Exploring the challenges to cope with ripple effects in the perishable food supply chain considering
recent disruptions: Implications for urban supply chain resilience. Journal of Open Innovation:
Technology, Market, and Complexity, 11(1), p.100449

While such disruptive events can be considered major threats to human lives affecting all
areas of society, they also test supply chains by the long-term impacts and high uncertainty
risks (Sarkis et al. 2020). Due to the interconnection among supply chain members, the
magnitude and scope of such disruptive events tragically showed that the actions of
downstream and upstream actors of complex networks profoundly affected the other. It is
essential to mitigate the risks within individual organizations and across the entire supply
chain. Developing capabilities in supply chains is crucial for rapidly responding to and
recovering from disruptions, potentially returning to a pre-disruptive state or even a better
one (Ali et al. 2017; Chowdhury and Quaddus 2017; Ponomarov and Holcomb 2009).

Sarkis, Joseph (2020), “Supply Chain Sustainability: Learning from the COVID-19
Pandemic,” International Journal of Operations & Production Management, 41 (1), 63–73.
https://doi.org/10.1108/ijopm-08-2020-0568

Ali, Abubakar, Amr Mahfouz, and Amr Arisha (2017), “Analysing Supply Chain Resilience:
Integrating the Constructs in a Concept Mapping Framework via a Systematic Literature
Review,” Supply Chain Management, 22 (1), 16– 39. https://doi.org/10.1108/scm-06-2016-
0197

Chowdhury, Md Maruf H., and Mohammed Quaddus (2017), “Supply Chain Resilience:
Conceptualization and Scale Development Using Dynamic Capability Theory,” International
Journal of Production Economics, 188, 185–204. https://doi.org/10.1016/j.ijpe.2017.03.020

Ponomarov, Serhiy Y., and Mary C. Holcomb (2009), “Understanding the Concept of Supply
Chain Resilience,” The International Journal of Logistics Management, 20 (1), 124–43.
https://doi.org/10.1108/09574090910954873

Dynamic capabilities are essential for enhancing supply chain resilience, especially in
disruptions (Ponomarov and Holcomb 2009; Ivanov and Dolgui 2020). Pettit, Fiksel, and
Croxton (2010) also emphasized that these capabilities, including agility and adaptability,
allow firms to manage uncertainties in supply and demand effectively and recover more
quickly from supply chain disruptions. In more recent studies, DCV has been increasingly
recognized as a pivotal framework in understanding and enhancing supply chain resilience,
especially in the face of global disruptions such as the COVID-19 pandemic. Dubey et al.
(2023) and Kähkönen et al. (2023) both highlight the importance of digital adaptability and
agility in supply chains, demonstrating how government effectiveness and the ability to
reconfigure resources swiftly during disruptions can fortify supply chain resilience. This
reflects a growing understanding of the interplay between macro-environmental factors, such
as government policies, and micro-organizational capabilities.

We also discuss how organizations can build resilience


“muscle”—the enablers needed to endure crises and pivot
into growth.
In our previous paper, we estimated that the cost of failure
to build resilience is between 1 and 5 percent of annual
global gross domestic product (GDP).
Leading research presented in this paper shows that in the
coming decades, action or inaction on these resilience
areas will affect GDP growth by plus or minus percentages
that translate into trillions of dollars. When measured in
terms of the quality of human life—or its very preservation
—the values are much higher.
In the past year, leaders of public- and private-sector organizations have
been confronted with a lifetime’s worth of disruption and crises. Global
conflict, energy uncertainty, food shortages, accelerating inflation, and
severe climate events rocked a world still unsettled by the COVID-19
pandemic. Consequently, leaders now recognize that our societies and
institutions must function in an environment defined by continuous
natural and man-made disruptions.

These disruptions cannot be treated in isolation, one after another, as


they arise and reverberate through our fragile ecosystems and stressed
networks. There aren’t enough resources in the world to do that. Many
government, institutional, and company leaders now agree
that resilience is our key challenge: we must strengthen resilience beyond
a survival capacity to enable long-term, sustainable, and inclusive growth.
From this standpoint, resilience is understood as the ability to deal with
adversity, withstand shocks, and continuously adapt and accelerate as
disruptions and crises arise over time. The time has come to act on this
understanding. The cost of inaction is too high.

1. The resilience agenda is a complex, continuous effort that will


extend through years and decades. Given the level of disruption
and the interconnectedness of the issues, current times demand the
integrated resilience agenda that this paper is advancing for the
first time. The war in Ukraine has revealed links between supply
chain vulnerabilities, energy security, and an affordable energy
transition. Technology has to become a growth engine for business
as well as providing new answers for better healthcare and a
smoother energy transition. Intersectoral links can seemingly be
adduced ad infinitum.

Trade and supply chain resilience


Trade and supply chain resilience
Leaders and their organizations must better understand supply chain
dependencies and reduce geopolitical, technological, and single-sourcing
vulnerabilities in their operations. At the same time, resilience efforts
must not sacrifice long-held supply relationships and the global
interconnections that enable prosperity. To spot over-the-horizon risks,
companies and governments should intensify their use of “early sensing”
and scenario planning. Unlike attempts at prediction, this approach seeks
to assess a range of potential outcomes given active forces and trends,
and then connects the outcomes to trigger-based escalation and action
protocols.

Shifting demand is one familiar cause of supply disruptions. Geopolitical


factors may drive a deglobalizing trend in trade, and supplier relationships
could become increasingly politicized. Yet such pressures will also come
up against the established realities of the interdependent world, creating
regulatory challenges and increased costs. No region in the world is close
to being self-sufficient; all import at least 25 percent of one or more
important resources or manufactured goods.6

Geopolitical uncertainty is forcing global


companies to take a hard look at the
decades-long strategy of geographic
expansion.
Unsurprisingly, business leaders view geopolitics as the top
risk to global growth and view political transitions as the
leading emergent risk, according to our latest global
economic survey (Exhibit 2). Business leaders tell us
diverging regulatory requirements, increased in-market risk
in multiple geographies, and the need to establish local
bona fide units without generating undue risk to the parent
are the reasons that now, as one executive we spoke to put
it, “Geopolitics trumps capital markets.”
The world is deeply interconnected. Recent McKinsey
Global Institute (MGI) research found that every major
region relies on imports for more than 25 percent of its
consumption of at least one type of critical resource,
manufactured good, or service

MGI has also found that 10 percent of the value of today’s


global goods trade is globally concentrated: three or fewer
economies provide at least 90 percent of global exports. 12

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