October 1, 2005
What happens when fire strikes the manufacturing plant of the sole supplier for the brake pressure valves used in every Toyota? When an earthquake in Taiwan shuts down chip manufacturers for Dell and Apple? 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. 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 that 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-miss,” fast detection, and close collaboration with government agencies, trading partners, and even competitors. The focus of the book is on resilience – the ability to bounce back from disruptions – 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.
Yossi Sheffi, an international expert in supply chain management, is Professor of Engineering Systems at MIT and Director of the MIT Center for Transportation and Logistics. He has worked with leading manufacturers around the world on logistics issues and is an active entrepreneur, having founded or cofounded five successful companies since 1987.