In this blog, Professor Mike Lewis explores researching resilient and secure supply chains and the 4 foundations of work package 4.
The major disruptions of recent years – from Brexit and COVID-19 to volcanos and earthquakes, terrorism, cyberattacks and armed conflict – have reminded everyone of the importance of resilient and secure supply chains. Work Package 4 (WP4) of the AHRC SALIENT project aims to support research that addresses related issues, in at least initially, four foundational areas. In this short blog I will introduce each area but also want to stress from the outset, the importance attached to interdisciplinary collaboration, addressing not just technical and analytical but also human and ethical dimensions and the significant value of incorporating cultural and historical perspectives into any proposed work.
Visibility: Spotting Risks Early
The cliché says, ‘you can’t manage what you can’t measure’. However reductive this perspective, one of the most widely discussed lessons from recent disruptions, such as the 2021 UK panic buying over tanker driver shortages, is the benefit of real-time visibility of supply systems.
Without a clear view of fuel stock levels and logistics movements, retailers struggled to respond, worsening the situation. Today, although many supply chains are investing in technology solutions, improved visibility also requires a more fundamental rethink. Signals and data streams exist across all nodes and modes of every supply chain, but organizations still struggle to use them. They also need to plan for the new digital vulnerabilities that such integrating technologies bring with them.
The Maersk cyberattack in 2018 (a spill over from the Russia-Ukraine conflict) for example, showed that over-reliance on real-time data and integrated systems can lead to paralysis when those systems fail, in this case halting operations worldwide The 2023 MOVEit cyberattack, exploiting vulnerabilities in widely used file transfer software, also exposed major gaps in supply chain cybersecurity.
It revealed a lack of visibility into third-party risks but also the dangers of centralized software dependencies. As always, the challenges lie not just in technology but in the organizational implications; actors not communicating, siloed data structures that increase latency in decision-making.
We also know that visibility isn’t everything. Excessive data can lead to information overload, slowing decision-making as leaders struggle to sift through vast amounts of information. It can create a false sense of security, where leaders believe they have control over every aspect of the supply chain and, of course, visibility does not prevent disruptions. The whole world watched in 2021 as the Ever Given blocked the Suez Canal but that didn’t prevent global shipping delays. Thus, while visibility is vital, it must be properly understood and complemented by flexibility, resilience, adaptive strategies – including the oft-overlooked role of insurance – to create a holistic view of supply.
Response and Restoration: Fast, Flexible and Future Oriented Reaction
Disruptions demand rapid response to allow systems to survive. During the 2021 driver shortage, the UK government called in the Armed Forces to help with deliveries and then issued emergency visas for foreign drivers and relaxed testing requirements to ensure movement of goods.
Similarly, in responding to global semiconductor shortages, Jaguar Land Rover maintained short-term delivery by altering their production mix to focus on using their limited supply of semiconductors to finish high demand vehicles.
More strategically, in their response to the COVID-19 pandemic, Médecins Sans Frontières (MSF) used modularity to adapt its supply chain operations quickly and effectively. By breaking down its supply processes into smaller, flexible components that could be reconfigured as needed. Facing international bottlenecks and shortages, MSF prioritized local sourcing, bypassing the delays associated with global procurement.
In recent years, interest has shifted from viewing such disruptions as purely negative to seeing them as opportunities for supply chains to grow stronger after a disruption, focused on key capabilities like collaboration and modularity to allow rapid recombination of resources. Toyota, following the 2011 Tōhoku earthquake and tsunami for example, didn’t focus solely on restoring pre-disruption operations, but instead used the crisis as an opportunity to enhance its supply chain capabilities.
Speed in decision-making can create significant pitfalls of course, as seen during the UK’s response to the COVID-19 pandemic. In attempting to address personal protective equipment (PPE) shortages, the UK government activated rapid response and while this swift action alleviated shortages, it led to billions of pounds in waste.
Much of the stock was either unsuitable for use, did not meet the required safety standards, or simply exceeded demand. The hasty procurement processes also failed to ensure long-term usability or adaptability of the equipment, resulting in millions of items being left unused. To manage this surplus, large quantities of PPE had to be incinerated, creating environmental and financial burdens. This example underscores how speed, without careful consideration of long-term needs and adaptability, can lead to costly missteps, turning rapid decisions into long-term liabilities.
Adaptation: Mitigating geopolitical and environmental risks
According to McKinsey work on shifting supply chains, the adaptation strategies of companies are increasingly focusing on regional diversification and onshoring to enhance security and resilience.
However, despite efforts to shift away from distant suppliers, trade data raises questions about the actual impact and effectiveness of diversification and onshoring strategies. Recent data for example shows that despite concerted US efforts to develop local supply chains, China’s influence remains strong.
Interestingly, while Mexico overtook China as the largest trading partner of the US in 2023, a significant portion of Mexican exports to the US still rely on Chinese value-added inputs. For instance, Mexico’s motor vehicle exports to the US—a key part of its trade—are heavily supported by components imported from China. This underscores that while nearshoring to Mexico may offer some logistical advantages and could help mitigate certain geopolitical risks, it hasn’t fully decoupled the US from China’s supply chain dominance.
Adaptation in supply chains also increasingly involves embracing sustainable practices to address environmental concerns. An interesting example of this in the UK is IKEA’s Circular Hub initiative.
As part of its wider sustainability efforts, IKEA UK launched Circular Hubs across its stores, allowing customers to return their used IKEA furniture. This furniture is then either repaired, refurbished, or recycled based on its condition, and subsequently resold to customers at discounted prices. This initiative complicates the supply chain but aligns with IKEA’s goal of becoming a fully circular business by 2030, where all its products will be designed using only renewable or recycled materials.
Governance: Rules, Standards and Regulations
Governance plays a critical role in supply chains. The UK National Security and Investment Act (2022) allows the government to scrutinize foreign investments in critical sectors like technology and pharmaceuticals with the intent of ensuring strategic supply chains are protected.
Similarly, the UK’s Cyber Essentials framework, updated after the MOVEit cyberattack, enforces stricter cybersecurity protocols and the UK Modern Slavery Act (2015) requires large companies to report on the measures they take to prevent forced labour and human trafficking within their operations and supply chains.
Wider governance, in the form of international agreements, labour standards, and environmental regulations are equally crucial. For example, the United Nations Global Compact sets global standards for responsible business practices. Compliance with these international standards may help ensure supply chains are more socially and environmentally responsible, but they also introduce layers of governance that businesses must navigate. This interaction between governance and supply systems is a fascinating area where there is clearly scope for collaboration between public and private sectors and takes us back to our first theme, visibility, in the name of wider accountability.
Concluding thoughts – bring us your best ideas….
While these foundations hint at what we already know about the ingredients that help build resilient and secure supply, further research is needed to deepen our understanding. As well as studying how visibility, response and restoration, adaptation, and governance interact, we are actively looking for innovative ways to look at these questions.
For example, approaches to resilience like Red Teaming, simulating threats and vulnerabilities by adopting the perspective of an adversary, could be fascinating to explore in the context of supply chains. IBM uses Red Teams to test the robustness of its cybersecurity, while Huawei have long established Red Teams to simulate competitive pressures and disrupt conventional approaches.
Or maybe research needs to focus on innovative data or methodologies, allowing for a more dynamic understanding of how supply chains can not only survive disruptions but grow stronger from them.
Whatever your ideas, in whatever context, we would be delighted to hear about them, and then together we can work towards the goal of shaping future supply systems.
Professor Lewis is the academic lead for SALIENT work package 4: Resilient and Secure Supply Chains