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Learn the key ideas of the book by Yossi Sheffi

The Power of Resilience

Learning to manage unforeseen events

Over the last few decades, globalisation has enabled companies to perfect their production and distribution chains, involving many suppliers all over the world. If on the one hand, this practice has facilitated the improvement of many processes, on the other, it has made the entire system more fragile. In The Power of Resilience, Yossi Sheffi shows us how companies can, and must, prepare themselves to deal with the effects of a short term crisis, so that they do not fall victim to events which they are simply unable to predict.

The Power of Resilience
Read in 10 min.
Listen in 12 min.

Many useful tips to:

  • Guide those in charge of risk management.
  • Learn to manage complex distribution chains.
  • Think about the importance of prior planning in response to extraordinary and unpredictable events.

The author of the book:

Yossi Sheffi is a professor of Engineering Systems at the Massachusetts Institute of Technology, where he is also the Director of the Center for Transportation and Logistics. He has written several bestsellers, among which are The Resilient Enterprise (2005), and Urban Transportation Networks (1985). He is an expert at optimising systems, managing distribution chains and risk management.

IDEA CHIAVE 1/11

A distribution chain that is more efficient but also more exposed to risks

The global market is an extremely complex system and companies that operate in it are using increasingly more detailed distribution chains, with an increasing number of suppliers, who in turn rely on other suppliers, and so on. The transport of goods has seen exponential growth over the last 30 years, and increasingly intricate management systems mean that less and less goods are kept in warehouses as inventory.

By analysing a distribution chain, we can identify five aspects to consider:

  • Raw materials and product components.
  • The suppliers that produce these components.
  • The geographical location of these suppliers.
  • The flow of goods, information and money.
  • Inventories and stocks of goods that are present in the chain at any given time.

If, on the one hand, this complexity allows us to reduce cost and management times, on the other, it creates extremely delicate balances that are not always easy to maintain. However, a company rarely knows its own distribution chain inside out, and therefore is at risk of having to deal with serious consequences; a snag at any point in the chain risks creating a domino effect, with global repercussions.

The possible problems are numerous, from unexpected breakdowns of machinery to natural disasters, to acts of sabotage or even terrorism. It is not enough to adopt strict risk prevention protocols, because the origin of the glitch is often external, and so obscure, that it is literally impossible to predict.

  

The key ideas of "The Power of Resilience "

01.
A distribution chain that is more efficient but also more exposed to risks
02.
The earthquake in Japan brought the American car industry to its knees
03.
It is also important to be prepared for the unforeseen
04.
Every catastrophe is different
05.
Focus on the effects, not on the cause
06.
Not all problems are immediately detectable
07.
The importance of the flow of information
08.
Be resilient and flexible at the same time
09.
The cost of risk mitigation
10.
Quotes
11.
Take-home message
 
 
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