The last five years proved we are more vulnerable to global events than we ever imagined. Even if you never felt the direct impact, chances are you experienced second and the third degree effects. This should remind us we all live in an "Ecosystem." This is because supply chains are built by engineers, not psychologists or political science professionals. Their aim is to maximize the benefits accrued by a highly organized network of partners. The rewards of such a self-organized system are high, but so are the risks. Highly complex self-organized systems get into a state of what we call "Armageddon," a point which exponentially increases the impact.
Success is owed to the joint/multiplicative factor of probability of all supply chain partners. But it is staggering to see that one partner may recover while the overall supply chain success is only 64%. This includes a different type of thinking and maturity in the supply chain and hence a need for a comprehensive framework to assess risks.
Executives are always focused on tackling organizational challenges but rarely tend to look at cross boundary problems—partly because they're difficult to pinpoint. It is also time consuming to define roles, responsibilities and accountability for a string of businesses you don't manage directly.
Three Disaster Levels in Ecosystems
Internal (within an organization) - A failure in one node or even a secondary node can threaten to cascade across the system and undermine strategic capacity.
External (how your partners and counterparts behave) - Resiliency not only depends on how effectively a partner(s) responds but how well others manage to navigate the system.
Interconnectedness (how it all comes together as a whole) - The world we live in is far more interrelated. Even if you are directly linked, you could experience what we call second and third degree influence.
Cue from the White House
To understand these vulnerabilities and create a transparent collaborative framework, both private sector and public sector organizations came together in the mid-Atlantic region under an initiative sponsored by the Federal Emergency Management Agency (FEMA). The goal was to:
- Create a framework that clearly defines all roles, responsibilities and accountabilities;
- Devise a robust plan that could easily adapt to varying degrees of vulnerabilities; and
- Implement a platform that is standardized both internally and externally across the ecosystem.
Working through the Regional Catastrophic Preparedness Grant Program (RCPGP) Mid-Atlantic Supply Chain Resilience Project, the Shared Intellectual, Inventory, Infrastructure, Information and Integrated Ecosystem Systems (SI5ES) developed by the authors was adopted for exploration.
SI5ES facilitates communication, collaboration and exercises among key partners and with the public sector. Its methodology frames supply chain risk problems and is especially suited for an unknown context, such as an emerging market or a catastrophic event.