21 JULY, 2022: The Mizuho India Japan Study Centre (MIJSC) at IIM Bangalore hosted Dr. Özlem Ergun, Professor and Associate Chair for Graduate Affairs in Mechanical & Industrial Engineering, Northeastern University during the Centre’s flagship lecture series ‘Tatsujin-Speak’ aka ‘Expert-Speak’, today. Her webinar was titled “Building Supply Chain Resilience: Strategies for Developed & Developing Nations” and, in the hour-long virtual session, Dr. Özlem Ergun talked about recent disruptions in supply chains, which, she pointed out, had bought supply chain resilience into sharp focus.
Watch here: https://youtu.be/ZINHOkPk480
Dr. Ergun provided a review of the state of knowledge about supply chain resilience, leveraging several largescale studies that were conducted, recently. “The severity of the impact due to natural disasters and man-made crises has increased due to the myopic view of looking at the problem in one dimension,” she explained, adding that responses must be tailored to suit individual supply chains, markets and risk profiles; and these responses must consider two dimensions simultaneously - product importance and shortage risk.
“Globalisation of supply chains is a reality due to obvious advantages such as lower costs. However, there are challenges such as supply chain vulnerabilities which are difficult to assess. The knee-jerk reaction is to onshore the production; however, this approach may cause cost-effectiveness issues,” she said, proposing that building supply chain resilience must be looked at through the lens of a new framework.
The four key elements of this framework as proposed by her included building awareness through communication, analytics and transparency; mitigation through hardening and diversification; preparedness through inventory stockpiling, capacity buffering and contingency planning; and effective response through prevention, demand reduction and supply increase.
During the discussion with Saideep Rathnam, Chief Operation Officer, MIJSC, Dr. Ergun gave an example of how a relatively simply product like saline water developed into a major shortage across USA and some parts of the developed world due to a poor understanding of potential risks in the supply chain. The proposed model of looking at shortage risk as well as product importance, if implemented, would have avoided this crisis, she explained.
On a query about role of quality and reliability in the mitigation strategy, Dr. Ergun emphasised that traditional procurement is unidimensional and focusses only on price. However, if quality and reliability are also considered, then the risks would get mitigated.
On a different note, regarding her learning from being a member of several National Academies Committees, she said her biggest learning was with regard to understanding issues from perspectives that are very different from her own academic perspective.