Supply Chain Resilience - Agile and lean strategy

Supply chain resilience while integrating agile and lean strategy
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Introduction
Globalization and digitalization make the work nature more dynamic and complex that causing the risk in the
supply chain. Managers feel difficulties to manage risk because it disrupts production, and affect quality in
negative ways. Often due to internal disruption and technical issues, the machine suddenly breaks down and
delays the entire system. Moreover, due to difference in customer demands and companies' operational and
production nature the fierce and uncertain competitive ground occur among companies. Sodo et al., (2012)
stated that the performance of the supply chain in terms of efficiency and responsiveness reduce significantly
due to different uncertainties and associated risk. According to Fonseca and Azevedo, (2020) the COVID also
creates inflexibility and vulnerability in the supply chain that creates challenges in the supply chain. Moreover,
inefficient management and allocation of resources due to a weak supply chain significantly impact the business
performance. To overcome these issues and risks in the supply chain there are different strategic actions and
techniques integrated by managers (Tse et al., 2016).
Ivanov & Sokolov, (2013) disclosed that resilience is significant in the supply chain to manage uncertainties
and risks. Moreover, Wieland & Wallenburg, (2012) addressed about current disruption in the supply chain that
is currently faced by different companies. Ferguson and Mansbach, (2012), highlighted that globalization
promotes business on an international level and reduces risks and barriers related to trade, government policies,
and technological issues. In this way due to expansion on both domestic and international borders the
customers’ demands and preferences change. In this way, the competition becomes fiercer with diverse

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opportunities in the marketplace. So, to meet the customer expectation, reduce uncertainties, provide fast
delivery to the customer there is a need to realign the current supply chain while integrating lean and agile
techniques. Wieland & Wallenburg, (2012) lean and agile are best to facilitate the customer and to manage the
inventory through thigh scheduling. Both are effective to main sustainability in SC, provide cost-cutting
advantages, ensure flexibility, and are highly responsive toward customers to meet their expectations (Ivanov et
al., 2017).
This report will address the contemporary issues that arise due to some external and internal factors and the role
of lean and agile strategy to ensure resilience in the supply chain. Different secondary evidence from the
research will address that what are the factors that cause disruptions in the supply chain and how its
sustainability, product quality, and overall business performance can improve while integrating lean and agile
approaches.
Research Objectives
The aim to conduct this study is to address:
1. The in-depth study about national and global supply chain resilience
2. To determine the impact of external forces on the internal supply chain system
3. To analyze the driving forces that serve as a key motivation to integrate lean and agile approaches in
supply chain
4. Role of agile and lean technique to ensure the resilience of supply chain
5. How lean and agile ensure resilience and boost the overall organizational performance
Literature Review
Customers are a solid source of income and reputation for any business. So, creating value for them, providing
the best experience, and ensuring quality is the key responsibility of the management. According to PoHsing,
(2015) the organization must gain market knowledge, analyze the current trend and integrate the intelligence
solution to meet the market and customer expectations. Moreover, Feigenbaum (1951), stated that ensuring
quality and quantity is the main factor that adds value. Wang et al. (2004) highlighted that the organization must
enhance the supply chain through which they can improve the product quality and utilize the resources
efficiently.
Supply chain management
Different scholars in their research propose a different definition of supply chain management based on their
research. According to Brook and Scott, (1991) in their research define the SCM that it is the chain in an

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organization that links the supply process and manufacturing process to each other at the time of raw material
from the end of the process. Ellaram., (1991) stated in research about the deficiencies of the supply chain that
can improve through integrating the JIT approach to reduce the suppliers and raw waste. Billington and Lee,
(1992) highlight the conventional supply chain functions that raw material can easily transform into finished
goods if the business integrates the conventional functions in their operational activities. Cox et al., (1995)
define SCM that it is the main business function that enables value in the overall process of their business and
provides satisfaction to customers. According to Berry et al., (1994) SCM can analyze the business and
customers' needs, exchange information, build trust, and manage resources for the long term. Houlihan., (1999)
proposed the definition of SCM that it can integrate into different functional areas of organization and also
improve the products flow from suppliers to end-users.
National Supply Chain Resilience
The resilience of the supply chain is not the only issue that businesses are concerned about; it is also a national
issue. That's why it's critical to establish supply chain resilience at the national level in an organized way. The
gigantic cargo ship that got stuck in the Suez Canal in 2020 is a good illustration of this. One of America's
largest gas pipelines was also knocked down by a cyber assault on the East Coast. A shortage of semiconductors
in the past also resulted in curtailed production of automotive companies. Texas has also witnessed rare deep
freeze and power outages which created a shortage of key plastics for a range of industries along with disruption
in the petrochemical plants (Umar et al, 2021). Rather than being a continuation of poor luck, these occurrences
serve as a sobering example of the shakiness of global supply systems. Covid-19 has made it the top priority of
the CEO's and government's plan to ensure resilience in their supply chains. Industry value chains often cover
the companies in thousands which involves global access to the consumer market and economies of scale along
with long-standing relationships (Dolgui et al, 2018).
Recent events have transformed the supply chains from "just in time" delivery of products to "just in case"
eventualities (Baryannis et al, 2019). System disruptions that were once rare in the occurrences have shifted the
trends into more probable. Research conducted by MGI in this regard resulted that an average company faces
the loss of one year's profit due to the supply chain disruptions over a decade. That's the reason business
organizations are looking extensively to reduce such vulnerabilities, which involves holding more inventory,
moving production units closer to where goods are sold, along with building redundancy among the suppliers
(Brusset et al, 2017). This recent pandemic of Covid-19 has prompted the policymakers to consider a broad
range of goods and technologies that are considered critical for national economic security in a structured
manner. Global trade flow will shift significantly under these new settings. Research in this regard estimated
that around 15 to 25% of global trade could shift to different countries in the next five years (Black et al, 2020).

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Protectionist Measures in the wave of supply chain disruptions
Governments were surprised in the past few years due to the supply chain disruptions on a national and global
scale. Although the customs agencies collect the data of related imports, no systematic structure exists at the
government level to analyze this data to identify any potential vulnerability (Dubey et al, 2019). This lack of
scrutiny at the government itself creates vulnerability. China is the biggest exporter in the context of trade with
the USA. That's why when supply chain disruptions spread, its reliance on the critical goods produced in the
other countries became more apparent. Industry value chains are linked as highly specialized in the last 20 years
as the production of the crucial components concentrated in a few countries (Elleuch et al, 2016). One example
is the global antibiotic ingredients mainly produced by China and India with a 42% share. Streptomycin and
Penicillin are exported by China 75% and 52%, respectively. Consumer electronics are another highly
concentrated production sector in which Taiwanese companies enjoy a competitive advantage by exporting 43%
integrated circuits of the global value. South Korea is another major country that produces one of the most
advanced chips. China exports 2/3 global mobile phones along with personal computers. Major research in this
regard estimated that around 180 products were exported worth $134 billion by a single country in 2018
(Katsaliaki et al, 2021). So potential shocks in any of these countries lead to bottlenecks unless a quick
alternative can be found in a structured manner.
Global Trade Alert published a report in the financial year 2020. Total 2,031 policy interventions were imposed
by the different governments that have a major effect on international commerce. It is an increase of 74% as
compared to the statistics of 2019 and respectively an increase of 147% higher than the average of 2015 to 2017
(Bier et al, 2020). Every three of the four interventions in this regard restrict cross-border commerce. Some of
the major examples in this include equipment and medicines export and medical supplies. Many of these
limitations do not attach with any expiry date. Vaccine experts are the latest spate of restrictions in this regard.
Because they are just short-term fixes, they leave economies exposed to future shocks and undermine the
national supply chain's resilience (Centobelli et al, 2020).
Governments measures to support national supply chain resilience
A comprehensive and analytical approach is required by the governments to build national resilience in the
supply chain instead of blocking the trade. The first major step, which is supported by the research, is linked
with identifying the vulnerabilities (Gunasekaran et al, 2015). Recently a national review was ordered by
President Biden's administration in the US regarding the critical supply chains, which include many sectors.
Some prominent examples include semiconductors, pharmaceuticals, high-capacity batteries, and rare earth
minerals. Other governments at the global scale have taken the same measures in this regard. So when the

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governments can identify these potential vulnerabilities, policymakers weigh the benefits and related cost of
actions to mitigate the specific risks (Chowdhury et al, 2017). Diversification is the key element in achieving a
resilient supply chain at the national level, along with ensuring transparency. Some of the effective strategies in
this regard include build in redundancies as well as the capacity to flex the production in response to the shocks
in a meaningful manner.
A wide range of options is available at the disposal of policymakers to achieve supply resilience. National
stockpiles can be used to store the critical goods or inputs same as the business organization adopts in holding
them more inventories. Domestic production units can be incentivized to augment the supplies coming from
foreign entities (Brintrup et al, 2020). A national supply chain risk monitoring function can be established in
this regard to analyze the trade regarding data and scan any possible disruptions that can impact negatively on
the operations.
Australia, Japan, and India are some of the countries which come through the announcement of resilient supply
chain initiatives so that to manage the pressing needs for their respective economies. That's the reason many
global consumer electronics companies have announced plans to move their production facilities to their
respective countries. Some prominent examples include Apple, Samsung, and Foxconn (Oliveira et al, 2019).
European Union is another major block in the world that has announced the action plan implemented in the
future regarding critical raw materials. A major plan worth $500 billion is proposed in the US that aimed to
revitalize manufacturing, train the workforce, investing in the research & development and supply chain. A
legal breakthrough in this regard is the Endless Frontier Act that proposed the investment of $110 billion in the
key industries to achieve innovation (Bret et al, 2021).
Such countries which want to achieve more global value chain production need to integrate their supply chain
with productivity-enhancing technologies so that to become more globally competitive. Such innovative
advanced production techniques can help to compete at the global scale to protect the national supply chain
dynamics in a structured manner. So it is indeed important for the countries to ensure the resilience in the
supply chain at the national level to protect their interest in a structured manner. The recent disruption of Covid-
19 has made it more clear for the countries to protect their supply chains from achieving security regarding
aspects in a structured manner.
Global supply chain
Businesses have expanded their operations beyond their borders in pursuit of the margin improvements that
have added up to the growth and complexities of the value chains as well. A researched in this regard added up
that the trade of intermediate goods has increased threefold, reaching $10 trillion annually in value (Lund et al,