National Academies Press: OpenBook

Freight Transportation Resilience in Response to Supply Chain Disruptions (2019)

Chapter: Supply Chains and Resilience: Definitions

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Page 126
Suggested Citation:"Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 126
Page 127
Suggested Citation:"Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 127
Page 128
Suggested Citation:"Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
×
Page 128

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126 This guidance results from the National Cooperative Freight Research Program (NCFRP) Project 50, Improving Freight Transportation Resilience in Response to Supply Chain Disruptions. A final report for the project is also available that outlines the research approach and provides references for many of the actions recommended in this guidance. The guidance is organized into five sections. The first section presents a representation of a supply chain that is used as a framework for subsequent recommendations on where different participants can make the freight transportation system more resilient. The next section examines the key characteristics of disruptions that help define the magnitude of impact and often dictate the type of response that will occur from the different participants. The third section presents guidance in the form of a series of steps that then lead to specific strategies for making a supply chain more resilient. The final section presents this guidance in a more hierarchical manner that allows users to determine what types of strategies for enhancing supply chain resilience are appropriate for different circumstances. SUPPLY CHAINS AND RESILIENCE: DEFINITIONS Supply chains are critical in today's world economy and ultimately to how society functions. There are many general definitions of a supply chain, and many more that are specific to particular commodities and goods. In general, a supply chain consists of the physical means of moving commodities and goods from one location to another, the organizational and information systems that support this movement, and the institutional environment within which the movement occurs such as the relationships with customers and with regulatory agencies. Put in simple terms, as noted by the Federal Emergency Management Agency (FEMA), "it is the process of deciding what, when, and how much should move to where".2 As noted earlier a supply chain will vary by commodities and goods as well as by market. Figures 2 to 4 illustrate this with representations of supply chains examined as part of this research. Even though there are differences among the supply chains shown, there are some common components to each. For example, each supply chain has specific locations that consist of origins, destinations and transshipment points (often referred to as nodes). Much of the delay that occurs normally in the supply chain occurs at such locations, primarily due to congested facilities. Every supply chain also includes network flows (often referred to as links). Examples include maritime shipping routes, rail lines, highways, inland water routes, and aviation corridors. Most definitions of supply chains also include the transactional and information systems that support such movements. For purposes of this guidance, the following supply chain components lead to the types of strategies that can be used to make the supply chain more resilient.  Physical infrastructure – divided into network link flows and node transfers: Road, rail, inland water, airport, and port infrastructure.  Network logistic support systems – Command and control systems that allow scheduling, network rerouting, capacity flexibility, risk pooling, and human resource managing.  Transactional/financial systems – Interactive supplier/customer financial systems, information systems that support capital investment, and overall firm financial systems. 2 FEMA. 2018. " Supply Chain Resilience Guide," draft. December. Those who work in supply chains often say their goal is a lean, smart and connected supply chain….the intent of this guidebook is a lean, smart, connected and resilient supply chain.

127  Market/institutional – divided into internal to an organization and external relationships – Regulatory/oversight relationships (prior to, during and after an incident), corporate policies, social and political systems, and social capital (reflects the interpersonal relationships and institutional structures that establish boundaries for interpersonal interactions)…or for private firms diversifying suppliers or carriers. Figure 2: Petroleum via Pipeline Supply Chain Figure 3: Electronic Imports Supply Chain

128 Figure 4: Supply Chain in Support of Military Deployment Supply chain resilience can be defined as "the adaptive capability of the supply chain to prepare for unexpected events, respond to disruptions, and recover from them, by maintaining continuity of operations at the desired level of connectedness and control over structure and function."3 An important extension to this definition of supply chain resilience is offered by Sheffi who states that it is "not just managing risk but also offering an opportunity to be in a better position than the competition to recognize and respond to an event, and even to gain advantage from a disruption.”4 In other words, supply chain resilience should not only be concerned with how to provide the most effective and efficient response to a disruption, but also how to anticipate likely disruptions and put in place the capability to minimize potential impacts, or hopefully avoid them altogether. Another important concept is social capital, which can be defined as the ability of groups or communities to cope with external stresses and disturbances as a result of social, political, and environmental change.5 In the context of 3 Falasca, M., Zobel, C., & Cook, D. 2008. "A Decision Support Framework to Assess Supply Chain Resilience." The 5th International ISCRAM Conference, (pp. 596-605). Washington, D.C. http://www.iscram.org/legacy/dmdocuments/ISCRAM2008/papers/ISCRAM2008_Falasca_etal.pdf 4 Sheffi, Y. 2005. "Building a Resilient Supply Chain." Harvard Business Review - Supply Chain Strategy, 1(8), pp. 1-4. October, https://hbr.org/2007/08/building-a-resilient-supply-ch 5 Adger, N. 2000. "Social and Ecological Resilience: Are They Related?" Progress in Human Geography, 24(3), 347-364. https://groups.nceas.ucsb.edu/sustainability-science/2010%20weekly-sessions/session-102013-11.01.2010-emergent- properties-of-coupled-human-environment-systems/supplemental-readings-from-cambridge- students/Adger_2000_Social_ecological_resilience.pdf

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TRB’s National Cooperative Freight Research Program (NCFRP) has released a pre-publication version of Research Report 39: Freight Transportation Resilience in Response to Supply Chain Disruptions. The report provides guidance to public and private stakeholders on mitigating and adapting to logistical disruptions to supply chains resulting from regional, multi-regional, and national adverse events, both unanticipated and anticipated.

The report, which makes a significant contribution to the body of knowledge on freight transportation and system resiliency:

(1) assesses research, practices, and innovative approaches in the United States and other countries related to improving freight transportation resiliency;

(2) explores strategies to build relationships that result in effective communication, coordination, and cooperation among affected parties;

(3) identifies factors affecting resiliency;

(4) analyzes potential mitigation measures;

(5) characterizes spatial and temporal scale considerations such as emergency planning and response timeframes;

(6) prioritizes response activities by cargo types, recipients, and suppliers;

(7) identifies potential barriers and gaps such as political boundaries, authorities, ownership, modal competition and connectivity, and social and environmental constraints; and

(8) examines the dynamics of supply chain responses to system disruptions.

The report also includes a self-assessment tool that allows users to identify the current capability of their organization and institutional collaboration in preparing for and responding to supply chain disruptions.

Disruptions to the supply chain and their aftermath can have serious implications for both public agencies and companies. When significant cargo delays or diversions occur, the issues facing the public sector can be profound.

Agencies must gauge the potential impact of adverse events on their transportation system, economy, community, and the resources necessary for preventive and remedial actions, even though the emergency could be thousands of miles away.

Increasing temporary or short-term cargo-handling capacity may involve a combination of regulatory, informational, and physical infrastructure actions, as well as coordination across jurisdictional boundaries and between transportation providers and their customers.

For companies, concerns can include such issues as ensuring employee safety, supporting local community health, maintaining customer relationships when products and goods are delayed, and ultimately preserving the financial standing of the company.

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