NAME- ISHITA TIWARI

CLASS- TY BCOM.H B

ROLL NO. – B014

SUBMITTED TO – Dr. ARSHIA KAUL

ABOUT THE AUTHOR

Yossi Sheffi has served as the Director of the MIT Center for Transportation and Logistics since 1992. From 2007 to
2012 he was the Director of the MIT Engineering Systems Division. He is the founding Director of MIT's Master of
Supply Chain Management degree, established in 1998. In 2003 he launched the Zaragoza Logistics Center, situated
in PLAZA, the largest logistics park in Europe. In 2008 he launched the Center for Latin-American Logistics Innovation
in Bogota, Colombia. In 2011 he launched the Malaysia Logistics Innovation Institute in Kuala Lumpur. "The Resilient
Enterprise..." was selected by the Financial Times as one of the best Business Books of 2005. “...Sheffi shows
managers how to build flexibility into all areas of their businesses,” the review said. The book received “Book of the
Year” award in the category of Business and Economics from Forward magazine. In the Resilient Enterprise:
Overcoming Vulnerability for Competitive Advantage, Sheffi explores high-impact/ low-probability disruptions,
focusing not only on security but on corporate resilience—the ability to bounce back from such disruptions—and
how resilience investments can be turned into competitive advantage.
I. WHEN THING GO WRONG: DISRUPTIONS AND VULNERABILITY

 CHAPTER 1- BIG LESSONS FROM SMALL DISRUPTIONS

On Friday night, March 17, 2000, when lightning lit up the desert sky, one jolt struck a industrial structure that housed a far off
station of Philips NV, the Dutch electronics conglomerate. The fire damaged the furnace, eight trays of wafers were ruined,
millions of cell phones worth of chips were destroyed. The principal request of business was to speak with the plant's most
significant clients-the Scandinavian cell phone giants Nokia and LM Ericsson AB-which represented 40 percent of the affected
orders at the Albuquerque plant. Both the companies had a different approach to the situation. Nokia on one hand tried to solve
the issue and contacted various other suppliers and helped Philips with the situation Ericsson was relaxed and inactive. Nokia's
way of life energized scattering of awful news; prompt activity to screen the stockpile of basic parts constantly helped it identify
the issue early; profound associations with its centre providers helped rally them to quick activity; information on supply
markets permitted it to obtain somewhere else; and secluded building configuration empowered the utilization of chips made by
different makers in a portion of its items. The very intricacy of worldwide supply systems implies that, much of the time, it is
hard to evaluate from the earlier vulnerabilities. Another factor that builds the vulnerability of numerous organizations is the
harder serious condition they are in. Intense rivalry implies not just that buyers have better options, and that organizations must
work harder, yet in addition that when an undertaking fizzles in any capacity whatsoever, others are holding on to have its spot.
Accordingly, firms must be stronger than their rivals. They need to put resources into the capacity to recoup rapidly from any
interruption and ensure that their clients are just negligibly affected. In reaction to the need to give significant levels of
administration at low costs, numerous organizations have assaulted their inactive stock furiously. Manufacturing can be
disrupted legitimately in light of an issue in a plant, a disturbance at a provider's plant, a glitch in the transportation framework,
an interruption to the communication and information system, or a snag with a customer. Several high-technology equipment
makers were shut out of chips supply during the time that Philips directed all its manufacturing to Nokia and other suppliers
were trying to help Nokia as well. When considering reducing an organization's vulnerability to disruption, administrators need
to take a gander at expanding both security and resilience. Expanding security depends on the formation of layered barriers,
following and reacting to "near misses," expanding the interest of all representatives in security endeavours, and working
together with government organizations, exchanging accomplices, and even contenders. When considering resilience, it may not
be beneficial to consider the hidden purpose behind the disruption-the sort of arbitrary, incidental, or malevolent act that may
cause a disruption. Rather, the attention ought to be on the harm to the system and how the system can bounce back rapidly.
One can take a gander at existing production network structures in enterprises that are disturbed as often as possible.

 CHAPTER 2- UNDERSTANDING VULNERABILITY

Large-scale disruptions like earthquakes illustrate companies' dependencies on a web of infrastructure connections. Phone lines,
power lines, water lines, gas lines, rail lines, highways, and ports connect companies to critical services, suppliers, and
customers. A firm's "vulnerability" to a disruptive event can be viewed as a combination of the likelihood of a disruption and its
potential severity. Companies assess their vulnerabilities by answering three basic questions: 1. What can go wrong? 2. What is
the likelihood of that happening? 3. What are the consequences if it does happen?

The figure provides a way of thinking about the confluence of probability and consequences
of events such as a fire outbreak or an earthquake. Vulnerability is highest when both the
likelihood and the impact are high. Correspondingly, rare low- consequences occasions
speak to the most minimal degrees of vulnerability. In any case, what may give off an
impression of being a lot of modest vulnerabilities may share little for all intents and
purpose for business arranging purposes. These include disruptions that consolidate low
likelihood and enormous outcomes, from one perspective, and those described by high
likelihood however low effect, on the other. High-likelihood/low-sway occasions are a part of the extent of daily management
operations, watching out for the generally little irregular varieties popular, surprising low profitability, quality issues, truancy, or
other such moderately normal occasions that are a piece of the "cost of working together." Low-likelihood/high-sway occasions,
then again, call for arranging and a reaction that is outside the domain of day by day activity.

The two-axis framework explains how different organisations have different exposure
to vulnerability in case of terrorist attacks through an example of American airlines and
McDonald’s. The effects of a terrorist attack on a single McDonald’s assets might be
negligible as compared to its effect on American Airlines due to McDonald’s sprawling
chains highly distributed structure. In spite of the fact that it is hard to imagine that
terrorists would invest wholeheartedly in disturbing the progression of ladies' clothing (subsequently the low likelihood), an
attack on Limited Brand's focal dissemination community would have disrupted the organization's activities and, therefore,
could have caused noteworthy losses. On account of the structure and nature of its business, Ace Hardware faces both a low
probability of terrorism and negligible results from an attack. Various organisations will be involved in various quadrants of the
vulnerability map, contingent upon the kind of disruption. At the point when an organisation thinks about the low-
likelihood/high-sway occasions to which it is uncovered, there are a few different ways to group the hazard so as to begin
organising what administrators should concentrate on. To help distinguish these disruptions, GM constructed a four-quadrant
map of vulnerabilities. These categories include financial (macro-economic, currency change fluctuations), strategic (new foreign
competitors etc), operations (supplier business disruption, theft by employees) and hazard (severe weather, earthquake etc)
vulnerabilities. The diagram arranges these vulnerabilities on a radial, internal to external dimension. The vulnerabilities towards
the centre tend to come within the organization while those on the periphery arise from outside of the organization. While the
probability for any one occasion that would affect any one facility or provider is little, the aggregate possibility that some piece
of the supply chain will confront some kind of disturbance is high. Disruptions can happen at any segment of the inbound chain
and outbound chain of organizations and procedures that interface crude materials sources to a definitive end-client of the
completed item. On the supply side organizations should endure the consequences of disruptions not only to its suppliers but
also supplier’s suppliers. Internal disruptions on the other hand might involve company personnel. In addition to the human
cost, such disaster includes the loss of the associations with representatives, clients, and providers that can be vital to
recuperation efforts. The expanding utilisation of information technology makes vulnerability to PC infections, programming
issues, and other innovation blackouts. Demand disruptions include unexpected decline in the demand of the products or
services offered by the company. Technological changes, new competitors, loss of customer confidence are some reasons for
this decline. Normally, demand imbalances can include unusual spikes for demand, prompting lost deals, bad service, and even
lost clients. Such disruptions, notwithstanding, are once in a while calamitous for an organization. Comparative, yet diversely
engaged, enterprise vulnerability maps can be utilized to arrange and organize various potential disruptions for a given
organization. In spite of the fact that it might be very hard for any enterprise to appraise precisely the probability and results of
every disruption, such maps serve to feature the relative vulnerability along these two measurements, driving organizations to
concentrate on the disruptions to which they might be generally vulnerable. There are two different ways to take a look at what
supervisors should concentrate on. The first is to list and organize events, (for example, quake, typhoon, strike, and harm) that
can prompt disruptions. The second is to list disruptions (for instance, diminished creation limit, deficiency of a basic part, or a
cut off transportation interface) and break down their causes (and outcomes). The primary is progressively helpful when
contemplating decreasing the likelihood of a disruption, since the applicable activities include treating the wellspring of the
issue. The second is progressively helpful while thinking about how to recoup from a disruption, since the reason might be less
important than the results and their seriousness by then.

 CHAPTER 3- ANTICIPATING DISRUPTIONS AND ASSESING THEIR LIKELIHOOD

One of the bedrock attributes of disruptions is that are never the outcome of a single failure but are a confluence of multiple
factors. There are normally many signals that the disruptions are going to take place which are normally ignored by the
managers. It is typical to have an escalating series of disappointments that lead to a possible catastrophe. To diminish the
probability of future high effect disturbances, numerous enterprises have built up an administration revealing and investigation
framework dependent on "near miss analysis". This analysis is widely used by aviation industry, U.S. military and by almost every
air force in the world.

The figure illustrates the notion that a number of unsafe conditions and processes can
result in a large number of minor accidents or close calls. When these are not addressed,
the outcome is probably going to be many incidents including some property harm,
prompting a few significant episodes including enormous property harm and minor
wounds. Furthermore, if nothing is done to address these undeniably genuine
misfortunes, almost certainly, a significant occurrence including genuine wounds and
death toll will follow sooner or later in time. Researchers at the University of Pennsylvanian' have illustrated a seven-step near
miss management process that utilizes information from near misses to forestall huge disruptions. The steps incorporate 1)
identification of disruption 2) disclosure 3) distribution of data 4) root cause analysis 5) solution and improvement
recommendations 6) dissemination 7) follow up. Considering mishaps and near misses gives managers a thought of the
probability of significant disruptions to their own activities and conditions the association to perceive perilous circumstances as
they create. Disruptions can be partitioned into three classifications to facilitate evaluating their probability: natural disasters,
accidents, and attacks. These classifications contrast in the relative roles that individuals and irregular elements play in their
cause. Subsequently, the techniques for evaluating their probability likewise contrast. Statistical methods (rank size law, 80/20
rule, probabilities) can be used to determine the likelihood of occurrence of a natural disaster and their magnitude. Assessing
the likelihood of an accident can be based on variations of near misses’ framework. Companies has incorporated process safety
management systems that verify compliance with safety procedures and helps in reducing the no. of accidents. Purposeful
 disruptions comprise versatile dangers in which the culprits look for both to guarantee the accomplishment of the assault and to
augment the harm. Therefore, "solidifying" one potential objective against a given method of assault may improve the
probability that another objective will be assaulted or there will be an alternate kind of assault. It additionally implies that such
assaults are probably going to happen even under the least favourable conditions time and in the most noticeably terrible spot
when the association is generally ill-equipped and defenceless. Managers have to remember that intentional attacks will strike
at the least defended place and at the most unusual time. To help understand the type of attack many companies use “red
team” exercises where a group of experts is tasked to think like an enemy, explore vulnerability of the organization and simulate
various attacks.

 CHAPTER 4-EFFECTS OF DISRUPTIONS

Most organization by observing the experiences of others can estimate the consequences of high probability disruptions while
on the other hand for low frequency disruptions the estimation of their likelihood and the consequences are dealt with low level
of experience leading to magnified outcomes. Companies should assume that governments might take strong actions in case of
high-profile disruptions however it may still not give a proper picture of the high impact disruption that might take place. On the
other hand, demand patterns might get affected as a reaction of public to rare and unfamiliar disruptions. Whereas
manufacturers and retailers could arrange for early shipment of required products, farmers have less authority over when their
rural products are prepared for shipment, which makes them especially susceptible to disruptions. For service businesses the
loss is even bigger as their business might be gone forever. Disruptions go through various attribute stages. 1) preparation stage-
sometimes an organisation can foresee and prepare for the disruption in order to minimize its effects. 2) disruptive stage- this is
the stage where the disruption takes place. 3) first response stage- in case of physical disruption the first respondents who have
to look out for the initial damage is the first period. In other cases, first period may involve shutting down processes. 4) delayed
impact stage-some disruptions might take time to show their affects to the company depending upon various factors like the
magnitude and duration of the disruption. 5)full impact stage- in this stage the performance of the companies drops
precipitously. 6) recovery stage- the preparations for the recovery start in parallel with the first response or shortly after it. They
normally involve contacting other suppliers and redirecting them.7) restarting production stage – repairing infrastructure,
reconnecting IT systems etc. 8) long term impact stage-if the customer relations are highly impacted then the impact of the
disruption can be long-lasting and recovery can be difficult.

Many organizations can quickly recover if they are prepared. The following two effects should be considered while assessing the
possible effects of disruptions 1) cascading effects as a result of government actions.2) competitive position of the company. The
time that a company takes to recover is the company’s resilience, whereas the grace period is the attribute of its market
position. The recovery time for commodity market situation is very less due to switching of customers and suppliers.

II. Supply Chain Management-A Primer

 CHAPTER 5- BASIC SUPPLY CHAIN MANAGEMENT

Maximizing customer service and minimizing cost are the two supply chain management challenges faced by retailers,
distributors etc. supply chain disruptions effect an organization at their core impacting their ability to satisfy customer demand.
In order to meet customer demand and to produce the set target production planners use the BOM process to identify the raw
materials needed, how much of each is required and at what time they should be ordered. The material requirement planning
system identifies situations where the raw materials or finished goods rely on the same supplier or on the same manufacturing
process and also to identify vulnerabilities of suppliers, plants and processes. The disadvantages of total integration were
realised by many manufacturers after seeing the example of Ford and Lucent, thus organizations started to focus on their core
competencies. In 1980s and 1990s the practice of outsourcing became widespread, this also led to the birth of modern supply
chain management which is basically the flow of products through the global network of suppliers. Supply chain is a
simplification of the supply web of suppliers, retailers, distributors etc. The two flows that describe the relation between
customer and supplier are downstream (flow of parts and products) upstream (Flow of money). One of the main attributes of
modern supply chain management is the concentration on controlling inventory levels. Some kinds of inventory are unavoidable
(WIP) others are useful for balancing cost. The role of inventory is to decouple (operation of different processes independently)
processes and disconnect the processes.

The bullwhip effect is the phenomenon that denotes the increased amplitude of orders and increase in fluctuations of inventory
levels. Lack of coordination between the buyers and suppliers is one of the factors leading to this effect. Promotions and
discounts are also one of these factors. Overcoming this effect requires focused coordination and communication between
companies and departments. Lean manufacturing system, VMI programs, just in time delivery system, cross-docking process and
Kanban cards are some of the methods used by the companies to improve coordination.

 CHAPTER 6- DEMAND RESPONSIVE SUPPLY CHAINS

 One of the main problems of supply chain operations is the need to produce or order goods before demand with certainty.
Too much stock means that it must be stored for a long time, incur cost of holding inventory and likely to be sold at a discount or
loss; too little inventory means loss of revenue and loss of clients. Companies usually use mathematical model-based forecasting
techniques to anticipate demand, and use the resulting prediction to produce or order the amount their customers plan to
require. Yet predictions are unreliable even with the most advanced statistical models. And methods of forecasting are even less
effective when predicting events with small probabilities. Predictions have always been a business obstacle. However,
forecasting becomes important due to the competition faced by the companies around the globe. Forecasting has become
important due to trends like globalization, product variety and life cycle and demand homogeneity. Regardless of the complexity
of the underlying methodology, the features all supply chain forecasts share include 1) inaccuracy 2) improvement 3) time
horizon 4) reliance on history 5) reliance on trading partners 6) risk sharing.

Rather than projecting a single demand statistic, progressive businesses have switched to forecast a variety of possible
outcomes. The range is used as a guide to terms of supply contracts and contingency plans: what to do when demand is at the
high or low end of the scale. Companies can and do use range forecasting to more than simply predict future amount of
demand. Flexible contracting, procurement strategies, and financial planning employ range forecasts. The goal is to increase the
versatility of the company, as the forecasts of the range prepare the company for changing market conditions.

Many businesses make use of their range forecast as an integral part of their suppliers ' flexible contracts. Such contracts outline
a set of output requirements, providing the client with flexible flexibility to scale up or down production as demand materialises.

The forecast range can usually be divided into an unpredictable portion, and a more reliable portion. Companies should be
assured that they can sell the high end of the range at least at the low end of the projected range while being less assured in, but
willing to sell at.

Generally speaking, the importance of range forecasting is that it can condition all organizations involved in a particular supply
chain to the possibility that demand and therefore orders, staffing rates, capacity utilization and other factors that defer from
the expected number of forecasts. As discussed in the forecasting characteristics, aggregate forecasts are more reliable than
individual forecasts, since random forecast errors appear to cancel each other out.

One of the strategies for the pooling of risks is to reduce the number of components used to produce products. The company
can aggregate the forecasts for the products to create a more accurate forecast for the common components when multiple
products share common components. The use of a portion or part of a great number of finished goods pools the risk of demand.
The demand for each component is the cumulative demand for all the finished goods using it. Since there are several goods,
each facing its own separate demand trend, it is possible that an increase in demand for one product would be offset by a
different rise in demand for another. This aggregation makes forecasting more efficient, allowing companies to have all parts
that they need in stock without high inventory rates. Risk pooling under one technique aggregates a wide number of potential
customers ' preferences into a limited number of product variants. The problem with this approach is to ensure that a more
restricted set of products will accommodate the overwhelming majority of customers.

Reducing the lead time from product design to market launch decreases the time gap that the organization requires to predict
consumer requirements. The main steps involved are- product development- ramp up – production and logistics. Every phase
involves multiple processes. Quick response manufacturing processes include rapid prototyping to speed up product growth,
rapid tooling to speed up the ramp-up process and rapid manufacturing to speed up the production cycle to shorten the lead
time involved. These approaches are based on simultaneous engineering and conduct many of the production tasks in parallel,
to reduce the total lead time by more efficient coordination between the various related departments.

Collaborative projects focused on lean supply chain concepts such as vendor-managed inventory (VMI) and the Kanban program
are mainly aimed at reducing the impact of bullwhip. These all require the exchange of knowledge.

Nevertheless, solving the forecasting problems requires more than data sharing; it needs a mutual mechanism of finding
anomalies and correcting the predictions of trading partners so that their activities can be synchronized. Over the years
numerous such processes have been developed. One of the most detailed of these approaches is the joint preparation,
forecasting, and replenishment process.

III. Reducing vulnerability

 CHAPTER 7- Reducing the Likelihood of Intentional Disruptions

Disruptions may be spontaneous, unintended or accidental. Reducing the possibility of intentional disruption will improve
security. Efforts to reduce the risk of deliberate high-impact disturbances include many concepts that, at their heart, are as
relevant to reducing the probability of a malicious burglary, or a computer virus, as they are to reduce the likelihood of a
successful terror attack. Companies can develop a “threat scoring model” which classifies into 3 risk categories where the
highest category gets the most attention. The fundamental concept behind all security initiatives is that they must work and
make money in accordance with the company's key goal. Throughout the short term, the risk profile of an organization is
determined by its facilities location and business existence. An organization should define potential disturbances based on its
risk profile and plan a collection of processes to reduce the likelihood of each. Any company's immediate supply chain
components include its own sites— plants, warehouses, and offices. Strategic choices such as where facilities are situated decide
a significant part of the company's risk profile for disruptions. Choosing a site that is less likely to be a terrorist target involves
strategic factors in country and area selection. Choosing a location where unions are not dominant will increase the probability
of harmonious labour-management relationships and reduce the likelihood of labour disruption, particularly in industries with a
history of acrimonious labour-management interactions. Labour can be the company's most important asset; it can play a vital
role in education and prevention. At the other hand, it is also a crucial vulnerability-representing "the enemy from inside."

When a business resides within its supply chain, considerations of protection and durability are relevant in the selection process
of trading partners, manufacturers, transportation carriers and other providers. The layered security theory is based on a series
of steps, each of which can, say, only work 75 percent of the time. However, the probability of failure of four such separate
layers is less than half of 1 per cent. A defensive scheme must tackle all possibilities of disruption at a degree commensurate
with the company's susceptibility to these disturbances, including any possible natural, unintentional and deliberate attacks.

The vast majority of incidents that businesses face is harmless. Companies need to establish ways to distinguish between risky
and common behaviours and find out which few pose a threat.

Many security experts at the organization cannot deal with malicious attacks across the globe on their own. Since the supply
chains their companies rely on span dozens of countries under a variety of regimes, companies need to work with their local
suppliers, consumers, logistics providers and other trading partners to be successful. Learning from the experience of other
businesses, and from the experience gained in different regulatory and law enforcement agencies, is also important in
minimizing the risk of injuries. Operating in the supply chain with the trading partners provides a stable and secure chain of
shipment custody. Operating with other companies within the same industry, including rivals, leads to benchmarking and
learning from the experiences of others. Government agencies not only provide tools for fighting terrorism, corruption,
vandalism, and other crimes, but also a wealth of information about established processes.

Better cooperation and trust between management and labour is especially essential for flexibility and resilience as it
encourages rapid response. Trust helps any party to contact the right person for support, without the need to establish trust, set
up a chain of command or check authenticity. However, it is not always easy to establish trustworthy relationships between
labour and management. Joint work to build protection and resilience is one method for building trusted relationships that can
spread to other business areas and support them.

 CHAPTER 8- COLLABORATION FOR SECURITY

Enterprise collaboration plays two main roles in raising the risk of disruption. Next, it helps them to learn from others so they
can use each one of the best experiences available for safe activity. Second, since many problems occur outside of a company's
"four walls" or spread to and from those in the supply chain, cooperation facilitates co-ordinated mitigation efforts amongst
trading partners. Collaboration is also, of course, essential for resilience, providing early notice when anything goes wrong
anywhere in the process and allowing concerted mitigation efforts if the supply chain is disrupted. The sharing of risks between
trading partners will reduce the bullwhip effect, prevent costly misalignment and increase all participants ' expected profits. This
may include exchanging information on incidents, building a structured network with law enforcement authorities, exchanging
best practices in security and implementing industry-wide safety standards.

Many companies formalized cooperation to prevent disruptions to the supply chain. An employee-based "community watch"
program enlists all company workers to search for and monitor incidents related to health. In the same way, bringing together
several companies in an organization to exchange data leverages every member company's expertise and resources.

Collaboration is a crucial element in the effort to protect the custody of shipments through supply chains that cover several
companies across the world. Suppliers, airlines, consumers, port owners and the government are all interested in preventing
damage. Cooperation guarantees a complex security by instituting numerous shipment checks while being in the possession of
the shipper, the logistics firm, the port operator, or the consignee, using different government entities in the process to
implement safe practices and secure commercial lanes.

 CHAPTER 9 – DETECTING DISRUPTIONS

 Detecting a disturbance means separating a true problem from the often-major differences in normal day-to-day activity.
Detection speed can be crucial to catastrophe avoidance. Companies face many difficulties in identifying issues related to their
items. The first underlying challenge is knowing there's a disturbance. Any product failure rate can be predicted simply as a
consequence of random causes, and it can be hard to determine whether there is a structural issue. The second challenge is to
figure out the cause. Products can fail for many reasons, many involving exogenous factors or improper use. Such problems both
hinder problem identification and create further uncertainty during the disturbance.

The challenge facing companies in effort detection is the difficulty in identifying a trend which would suggest an aberration in
the regular variations of that random events. The method that many organizations use to differentiate between normal highs
and lows of any method (such as industrial boiler temperature, number of chips yielded per wafer, or "chatter" terrorist) and
"outsider" incidents that require special scrutiny is called statistical process control (SPC). With SPC, an organization measures
upper and lower control limits-recording, for example, the usual range of fluctuations in the number of daily and weekly deaths
when considering the method under control. Due to the many ambiguities involved, identifying problems will take time: Is there
a problem? Where's it? And so forth. Searching for a source thus forms part of the process of detection.

Organizations are faced with yet another degree of challenge: bridging the gap between getting disruption data and
"internalizing" the data. Internalizing the data involves processing them and sharing them internally, so that the involved
stakeholders are aware of the situation with adequate clarification to take future actions.

The most difficult to identify and internalize the unknown is that it always requires challenging long-held beliefs about what is
possible and transferring knowledge beyond the usual channels. The cycle of increasing information, including decisions about
what to tell superiors about and when to do so, is one of the keys to identification and rapid response. Many business
environments do it differently than others. The manner in which most organisations are organized, knowledge percolates the
authority chain, and orders percolate down to the people who execute it. This method takes time and is incomplete but it
operates in cases of no emergency. Individuals need to be encouraged to circumvent the usual knowledge system in an
emergency.

Disruptions are unavoidable in many situations, and warnings should be issued forthwith. The proverbial writing is on the wall in
many situations and the task is to internalize the imminent chaos and to take steps to minimize the consequences. Different
surveillance systems have been set up by susceptible organizations to enhance early detection and, in some cases, add
additional capabilities. Monitoring systems may also include data from the past to help spot near misses and establish disruptive
patterns.

A network of early detection set up to prevent low-probability disturbances will regularly alert managers to smaller issues and
negative patterns on a regular basis. Monitoring near-misses will point to issues with structural processes that are likely to
manifest as potential disturbances. Early detection will give companies and government time to conduct containment and
recovery operations and prepare consumers and the general public for the disruption.

 CHAPTER 10- RESILIENCE THROUGH REDUNDANCY

Profit oriented organizations can hardly keep large amounts of capacity idle but some forms of redundancy are used by almost
all organizations. The basic stock of redundancy used by all businesses is safety stock. But keeping this extra supply of parts and
products can be expensive and managing the inventory can be tedious. Usually extra inventory hides the problems which can be
avoided with little or no inventory where immediate action can be taken for any issue. As Toyota Motor Corporation has proved,
reducing inventory (and using just-in-time discipline) leads to improved quality. The SOSO inventory makes sure that the stock
kept is fresh and the requirement of high-level approval ensures that stock is as per company’s quality standards. Normally
when the organizations have a little bit of hint about the disruptions then they can store the inventory to set off the effects.
Instead for using inventory for redundancy some organizations use capacity for mission critical business units. Any type of
redundancy helps the organization to serve the customers after a disruption. While creating for inventories companies should
keep in mind that they do not reverse the gains of such operations. Yet inventory is a part of most resilience and business plans.
Even a relatively small amount of inventory can provide a disrupted company with time to prepare its response. On the other
hand, a high level of inventory might be expensive. However, with some benefits of redundancy comes high costs which leads to
reduction in efficiency. Even after this redundancy can be termed as insurance against risk.

IV. Building in flexibility

  CHAPTER 11- FLEXIBILITY THROUGH INTERCHANGEABILITY
Having viable alternatives in any situation means having ultimate flexibility. In case of a shortfall the interchangeability of parts
and processes creates a lot of options and in the event of any disruption organizations can substitute the alternative parts. In a
strategy called copy exact companies builds products and processes so that they can be used interchangeably, this strategy
provides flexibility and avoids bottlenecks. One of the ways to create flexibility through interchangeability is standardization of
manufacturing processes. Companies can increase corporate resilience by simplifying their requirements. Using standard
designs, processes etc broadens the base of suppliers, retailers and distributors. Widespread standardization also underpins
performance improvement processes. Demand flow technology is a strategy designed to increase the manufacturing flexibility in
a lean manufacturing environment. This strategy helps in asset utilization and also accelerates the material flow. Risk pooling is
one of the factors that leads to the benefits of interchangeability, which in turn leads to flexibility to respond to disruptions.

 CHAPTER 12 – POSTPONEMENT OF FLEXIBILITY

The postponement strategy allows the providers to satisfy many of its customer segments taking advantages of economies of
scale. It is based on redesigning and restructuring of products and processes so that an important component common to a
group of products in manufactured first. Such strategies are used to provide high service levels at lower costs.

The retailers at a particular time every year have to estimate what the customers want and then order the merchandise
accordingly, however forecasting total demand is not sufficient. This problem is not restricted to retailers, many suppliers are
also subject to the same market forces. To avoid disappointing the customers, suppliers and retailers can order in bulk to meet
the increasing demand at the cost of keeping excess inventory. Many companies use variable pricing, after the fact pricing to
satisfy customers. Products that can be benefitted through this strategy are the products that have uncertain demand, short
customer lead times, high inventory carrying costs, and modular product design.

This strategy when applied keeping vulnerability in mind can also increase supply chain resilience. This strategy also adds
flexibility and resilience not only downstream but also upstream. As a benefit of this strategy companies can manufacture their
base products in large quantities regardless the no. of variants. Supply chains designed for this can be helpful in anticipating
potential disruptions.

 CHAPTER 13- STRATEGIES FOR FLEXIBLE SUPPLY

Supply chains have evolved from the realm of a single business to a network of suppliers and their suppliers over the last half
century. Outsourcing full product production is just the next logical step in this transition, a phase that has contributed to the
growth of contract manufacturing firms in many industries. This results in companies becoming increasingly dependent on their
suppliers. Outsourcing provides economies of scale and manufacturer experience, while offshore production provides low
labour costs and flexible labour. Focusing on core competences helps businesses to increase their competitive edge in places
where they are high. The combination of outsourcing with supply base restructuring-which most corporations in Europe and the
United States have introduced to different degrees-has, in many ways, changed the essence of competition. Rather of competing
based on their own resources, businesses are now competing based on their capacities in the supply chain. Good relationships in
trade provide resilience when a catastrophe hit. Many businesses also rely on multi-sourcing to mitigate the impact of supply
disruptions.

This figure's upper-right quadrant portrays the condition of close relations with several
suppliers. That's too costly and it's hard to find examples of businesses that employ these
strategies. The top left quadrant depicts the deep single sourcing. The following two sections
provide examples and discuss the supplier relationships which fit in the figure's two lower
quadrants.

Considering that businesses are increasingly dependent on their suppliers, it is important to

analyse the versatility of the entire supply chain. The study of the MIT Supply Chain Response to Disruption showed that sole
sourcing provides increased interaction with suppliers on the subject of resilience. Suppliers are active in the business continuity
planning of the client and many businesses need suppliers to create and manage their own robust business continuity plans.

Therefore, aligning the procurement plan with the supplier relationships will ensure stability, either reducing the risk of an
unforeseen interruption to a single supplier, or providing the stability that comes with multiple supplier relationships.

 CHAPTER 14-CUSTOMER RELATIONS MANAGEMENT

 The key goal when recovering from a disruption is to isolate the clients of the company from the impact of the disruption or to
help them recover as quickly as possible. To this end, the customer-facing functions of the firm— especially sales, marketing,
delivery, and public relations — can play a key role in maintaining consumer relationships, engaging with customers, and
prioritizing service throughout disruption. In fact, a successful response provides the company with a chance to capture the
hearts of consumers with outstanding remediation and solid efforts.

Caterpillar Inc. is the world's largest construction and mining equipment manufacturer. In order to improve its durability, it has
provided a unique versatility in its relationships with its suppliers: To adapt to a customer's emergency order, Caterpillar can buy
back and resell parts that have already been sold to suppliers and are in the warehouses of those dealers. Caterpillar will store
copious amounts of spare parts available at a moment's notice to mitigate inconvenience to its customers.

Bringing them as much information as possible is one of the most critical factors of helping clients recover from a disturbance.
Clear and constructive interactions with trading partners and, in particular, consumers will reduce the inevitable ambiguity and
uncertainty that is part of most large-scale disruptions. These communications allow trading partners to concentrate their own
recovery efforts based on up-to-date, reliable data. The first stage of engaging with consumers and trading partners is the
collection of reliable information to fuel the campaign. Timely updates ensure that when news of a disturbance reaches them,
consumers do not expect the worst.

Good long-standing customer and community relationships may help a business recover from a disruption by having customers
able to support the business directly or be flexible in meeting the needs of the business during recovery.

However, if an organization has good and stable consumer and delivery partnerships, after a disruption it will not be able to
please all customers. Setting customer care goals for post disruption operations requires a decision-making process similar to
the triage emergency response procedure. Managers face a triage-like decision in the immediate aftermath of a disruption over
which customers to serve first. These decisions may be based on insecurity of the consumer or on more internal factors such as
how lucrative the consumer is, how costly it will be to service him or how relevant the customer is in the long term. Deciding
which customer is vulnerable, and to what degree, needs a qualitative evaluation of which situation is more critical to customers
than others.

 CHAPTER 15 – BUILDING A CULTURE OF FLEXIBILITY

Some organizations adapt better than others to disruption not because their supply chain structures are radically different, but
because there is something "in their DNA" conducive to speedy response. An organization's culture can be characterized as the
pattern of beliefs and expectations shared by the members of the organization; these beliefs and expectations create norms that
form the actions of individuals and groups. Enterprise culture can play a defining role in the competitive advantage of the
enterprise. Resilience is the result of preventing disturbance and recovering from it. Culture leads to sustainability by providing
workers with a collection of values on the correct approach when the unexpected happens and when the protocol of the formal
company does not address the actual situation or is too late to respond. It indicates what steps will be taken.

The flexibility-oriented community is based on four principles: (I) result commitment, (ii) coordination and collaboration, (iii)
personal relationship importance, and (iv) leadership at all stages. The key cultural characteristics that lead organizations to
respond rapidly and flexibly can be defined by (I) constant contact between educated workers, (ii) centralized control, (iii)
organizational excitement, and (iv) destructive conditioning.

Company culture can be the true key to the success of the firms mentioned in this book. The foregoing cultural characteristics
also provide these businesses with versatility that gives resistance to high-impact disruptions.

V. Resilience for competitive advantage

 CHAPTER 16 – MOVING AHEAD

The MIT business response analysis to the threat of large-scale shocks showed that the majority of businesses often do not
regularly care about handling supply chain risks and vulnerabilities. The book is an appeal for action. However, it is not a call to
start investing vast amounts of money on converting each factory into a fortress and stockpiling material mountains. Rather, it
calls for comprehensive risk research, to learn from the experience of other individuals, to improve stability in the supply chain,
to concentrate on resilience as much as on protection, and to make good use of tools available to support business from
investments in protection and resilience.

Organizations should find the following for reducing vulnerability

• Organizing for change • identifying risks • reducing the risk of instability • partnering together for protection • building
redundancies • designing robust supply chains and• investing in training and culture.
The traditional sustainability strategy is to provide an "economic continuity plan." Continued attempts to create resilience may
involve redesigning business procedures, changing corporate culture, improvements in product design, systemic improvements
within the company, and different partnerships with clients, vendors, and other stakeholders.

To determine the weakness of the company entity, the following three critical questions are: 1. What might go wrong? 2. How is
the likelihood of that happening? 3. How serious are the possible impacts? Using risk maps helps administrators to put future
disturbances within a matrix of probability / repercussions that focuses on disturbances of the greatest possibility and the most
serious likely consequences. These vulnerability maps should be regularly updated as each major client activity will add or
remove vulnerabilities and change their total probability or potential severity.

Many businesses have been working for a long time to improve protection, thereby raising the risk of incidents and the effects of
unexpected occurrences. Intentional disturbances, which at many companies receive a growing amount of focus, allow for an
expanded collection of resources and solutions. The first task is to easily spot a disturbance and identify it for what it is.

Collaboration makes it easier for businesses to reduce their risk until they emerge from a threat that "brings home the
message," as they benefit about the experience of others. Companies should collaborate with their own workers, making sure
they are empowered and qualified to track and investigate changes in the workplace.

Some of the best ways to construct stability is to invest in redundancy. Clearly, numerous vendors, excess inventory, surplus
room, new staff and low demand will help a company rebound from a disturbance quickly.

Rather than focusing entirely on continuity in the supply chain and its resulting costs, a well-managed company can create
stability by creating versatility that can be used to "bounce back" from shocks, often with minimal redundancies.

Many corporations ' many valuable properties are its workers. Cross training and changing tasks help staff understand vast
organisations ' activities. It also ensures that other workers are able to do their job-a capacity that can be used both during
delays and peak hours.

Critical review
For me, Yossi Sheffi's book was an eye-opener, not so much because of its intellectual importance, but because of its
"entertainment" importance, "entertainment" as in "stop-you-in-your-tracks-and-make-you-think "-value. The Robust
Enterprise: Resolving Economic Disadvantage doesn't automatically have practical remedies for your own company but it
demonstrates how many businesses handled various disaster circumstances, whether effectively or not. Discussion by Sheffi on
how and when things go bad or right is dead on and to the point. This book does not suggest any new technical concepts, initial
algorithms or modern procedures. Rather, the main argument is a two-sided coin: building versatility is the only way to create
supply chain resilience; agile firms are top performers on a regular basis on the market.