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The Resilient Enterprise

The Resilient Enterprise


Overcoming Vulnerability for Competitive Advantage
Yossi Sheffi

Stories from Nokia, Dell, UPS, Toyota, and other companies show how firms can reduce their vulnerability to high-impact disruptions, from earthquakes to strikes, from SARS to terrorism, and use them for competitive advantage.

What happens when fire strikes the manufacturing plant of the sole supplier for the brake pressure valve used in every Toyota? When a hurricane shuts down production at a Unilever plant? When Dell and Apple chip manufacturers in Taiwan take weeks to recover from an earthquake? When the U.S. Pacific ports are shut down during the Christmas rush? When terrorists strike? In The Resilient Enterprise, Yossi Sheffi shows that companies' fortunes in the face of such business shocks depend more on choices made before the disruption than they do on actions taken in the midst of it—and that resilience benefits firms every day, disaster or no disaster. He shows how companies can build in flexibility throughout their supply chains, based on proven design principles and the right culture—balancing security, redundancy, and short-term profits. And he shows how investments in resilience and flexibility not only reduce risk but create a competitive advantage in the increasingly volatile marketplace.

Sheffi describes the way companies can increase security—reducing the likelihood of a disruption—with layered defenses, the tracking and analysis of “near-misses,” fast detection, and close collaboration with government agencies, trading partners, and even competitors. But the focus of the book is on resilience—the ability to bounce back from disruptions and disasters—by building in redundancy and flexibility. For example, standardization, modular design, and collaborative relationships with suppliers (and other stakeholders) can help create a robust supply chain. And a corporate culture of flexibility—with distributed decision making and communications at all levels—can create a resilient enterprise.

Sheffi provides tools for companies to reduce the vulnerability of the supply chain they live in. And along the way he tells the stories of dozens of enterprises, large and small, including Toyota, Nokia, General Motors, Zara, Land Rover, Chiquita, Aisin Seiki, Southwest Airlines, UPS, Johnson and Johnson, Intel, Amazon.com, the U.S. Navy, and others, from across the globe. Their successes, failures, preparations, and methods provide a rich set of lessons in preparing for and managing disruptions.
Additional material available at www.TheResilientEnterprise.com

"Insightful, shrewd, and creative. This book shows how enterprises properly made resilient against both terrorism and the disruptions inherent in globalization can also have the flexibility to respond more effectively to today's fast-changing markets."
R. James Woolsey, former Director of Central Intelligence, Vice President, Booz Allen Hamilton

"Yossi Sheffi's book makes it vividly clear that the winners on the competitive playing field will be those companies who effectively manage their supply chains, particularly in the face of adversity. This is a boardroom issue, and a must-read."
Michael L. Eskew, Chairman & CEO, UPS

Table of Contents:
Preface ix
Acknowledgments xi
I When Things Go Wrong: Disruptions and Vulnerability 1
1 Big Lessons from Small Disruptions 3
2 Understanding Vulnerability 17
3 Anticipating Disruptions and Assessing Their Likelihood 35
4 Effects of Disruptions 57
II Supply Chain Management--A Primer 75
5 Basic Supply Chain Management 77
6 Demand-Responsive Supply Chains 93
III Reducing Vulnerability 113
7 Reducing the Likelihood of Intentional Disruptions 115
8 Collaboration for Security 137
9 Detecting Disruptions 155
10 Resilience through Redundancy 171
IV Building in Flexibility 181
11 Flexibility through Interchangeability 183
12 Postponement for Flexibility 195
13 Strategies for Flexible Supply 209
14 Customer Relations Management 225
15 Building a Culture of Flexibility 243
V Resilience for Competitive Advantage 267
16 Moving Ahead 269
Notes 287
Index 317

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