When a person, system, or organization is subjected to external force or disturbance and manages to recover back to normal, Resilience is the term to define it. The same definition can be used to describe Supply Chains. It refers to a supply chain’s capacity to fulfill its objectives despite changes and disturbances. A fully resilient supply chain, in principle, will absorb the majority of the effect and recover to meet its objective. However, few businesses rely on a completely robust supply chain since these disruptions generally come at a cost (sometimes which even results in loss of business). Resilient supply chains go against the lean principles right out of the gate.
An agile supply chain, on the other hand, is described as one that can quickly react to external changes. An agile supply chain, rather than absorbing risk like a resilient supply network, rapidly steers around it. But it’s also true that all of this risk management comes at a cost to the supply chain. To be genuinely agile, a supply chain must forego the benefits of economies of scale in order to preserve its risk-avoidance agility. Depending on the product, market, criticality, and other business variables, most businesses now settle for a trade-off between supply chain resilience and agility. As a general rule, agile approaches tackle more external disturbances, whereas supply chain resilience focuses on internal disruptions.
Take a look at the figures below, diagram “A” depicts Agility dealing with opportunities and disruptions caused by threats, whereas diagram “B” depicts Resilience dealing with internal disruptions. This is what most supply networks want to be, as seen in figure “B.” In this situation, resilience is defined as the ability to withstand both external and internal disruptions while including agility.
