Mumbai (Maharashtra) [India], Aug 10 (ANI/Mediawire): COVID 19 has caused unprecedented havoc in the world and disrupted lives, livelihood, business, enterprise, and economy. Supply chain disruption and inadequate response from the industry have been the causes of concern across the globe.
On this background, National Institute of Industrial Engineering organized a webinar on "Supply Chain Resilience and Need for Stress-Tests" by Professor David Simchi-Levi, a globally acclaimed scientist on Supply Chain Management and Logistics. Professor Simchi-Levi, Professor of Engineering Systems at MIT and Head of the MIT Data Science Lab, is also Fellow of INFORMS and Editor-in-Chief of Management Science and Journal of Operations Research.
Professor Simchi-Levi discussed the need for the stress-test in the supply chain to measure its resiliency in his hour-long speech. He also explained the risk exposure model and strategies for balancing efficiency and resiliency in supply chains.
On the backdrop of the pandemic, Professor Simchi-Levi had accurately predicted the forthcoming disruption in global supply chains as early as February 2020, using his newly developed risk exposure model. In the past decade, supply chain risks have increased significantly due to strategies like consolidation, outsourcing, offshoring, and lean implementation, and these strategies need rethinking due to pandemic disruption.
Professor Simchi-Levi presented four concepts to measure resiliency in the supply chain - (i) time to recover (TTR), (ii) performance impact, (iii) risk exposure, and (iv) time to survive (TTS). Based on modeling and analysis of supply chains of North American companies, Professor Simchi-Levi shared several insights such as - (i) the risky companies are not the strategic suppliers in most of the cases, (ii) risky suppliers are not necessarily in Asia, (iii) managers need to understand the relationship between TTR and TTS for their suppliers, (iv) the importance of focusing on hidden risk to increase resiliency.
Balancing efficiency and resiliency requires managing trade-offs. Professor Simchi-Levi explained how the trade-off curve could be shifted favorably by restructuring the supply chain and changing supply contracts to include the stress-test. He also noted the relevance of the Prime Minister's slogan "vocal about local" and stressed that an outright reshoring to the US could not be a solution to all supply chain issues.
Finally, Professor Simchi-Levi expressed the need for the Government to prioritize critical supply chains like food, healthcare, life sciences and urged industry and policymakers to work closely with academia to apply stress-tests to improve resiliency.
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