A question that I have fielded continuously over the last few weeks is the following: “When will the constant product shortages we are all experiencing end?” First, they came for our toilet paper and we said nothing. Then, they came for our cars and still, we said nothing.
Our supply chain is performing just as designed. Or not designed. ‘And then a miracle occurs’ is not planning, foresight, or strategy.
I recall an axiom from your class: Your operation strategy is aligned when your customer is willing to pay for the operational costs (or something like that). How do you think about that today in respect to resiliency?
Customers are, today, probably willing to pay extra for resilient supply chains that have inventory. But the minute that the market is unconstrained, the customers are no longer willing to pay and resilient supply chains are at a cost disadvantage. It takes time and energy (and $$$) to transform a supply chain from lean to resilient and back again.
What firms would be incentivized during happy days to proactively invest in resiliency and to what extent? What are the characteristics of those customers that make those firms unique? The only thing I could think of was organ donation supply chains but I'm not sure that's a good market-driven example.