In his new book, “The Power of Resilience: How the Best Companies Manage the Unexpected” (MIT Press), MIT professor Yossi Sheffi explains why modern vulnerabilities call for innovative processes and tools for creating and embedding corporate resilience and risk management. Sheffi spoke with Longitudes editor Samantha Slappey. Samantha: Your book is titled “The Power of Resilience.” Why did you choose that name? Yossi: The term resilience is technically taken from material science—it is the ability of a metal to return to its former shape after deformation.
After being caught off guard by a phenomenal increase in sales in 2013, a company in the auto battery replacement market wanted to improve the accuracy of its sales forecasts. The problem was exacerbated by a relatively long ramp up to new production. Consumers go shopping for new car batteries when their existing units fail, so helping the company to anticipate failures helps the organization to improve the accuracy of its sales forecasting.
By Yossi Sheffi. An important challenge facing companies today is how to engender trust in the products they sell, and having gained buyers’ trust, how to keep it through thick and thin. There are four categories of attributes that consumers care about. The first and simplest is search attributes such as a product’s weight, color, or price. “Search” attributes are obvious tangible properties that consumers can search for and personally evaluate without ever buying or using the product.
By Alexis H. Bateman. The ability to track and trace products is fundamental to sound supply chain management. Traceability affects supply chain efficiency, product safety and security, managing deep tier risks, on-time delivery performance, troubleshooting customer issues, controlling costs, and regulatory compliance. Now, another set of demands can be added to this list: government and consumer pressure to meet sustainability goals.
In 2005, Dr. Yossi Sheffi of MIT helped change the industry's thinking on supply chain risk management with his book titled The Resilient Enterprise. Now he is back again a decade later with fresh look at supply chain risk management strategies, based on three years of additional research on the subject. Sheffi discusses this latest work, The Power of Resilience, in a video interview with SCDigest editor Dan Gilmore. The book is not just an extension of The Resilient Enterprise, but a whole new work that stands on its own.
When safeguarding their supply chains against disruptions, companies commonly assign the highest priority to events that happen relatively often and hit hard. Focusing on those with the highest likelihood and the greatest potential impact certainly seems like a logical approach to risk management. Except that these are not the worst perils that companies face. In fact, events that rarely happen but wreak havoc pose the most dangerous threat to corporate health.
Companies often group inventory items into classes in order to manage them more efficiently. Managers routinely use these clusters or segmentations in their inventory replenishment planning decisions. However, as companies grow and their operations expand, these classifications can become outdated. If this problem is not addressed, products can become misclassified. Inaccurate SKU classifications add cost to supply chains and hurt service levels as inventory managers misallocate resources to meet demand.
Yossi Sheffi, professor and director of the MIT Center for Transportation & Logistics, discusses his newest book, "The Power of Resilience: How the Best Companies Manage the Unexpected." [Run Time (Min.): 6:44]
In new book, MIT professor explains how companies can lessen the shocks of a volatile world. Companies large and small globalize their enterprises in search of advantages, such as lower costs, flexibility, and closer proximity to key markets. But globalizing comes with an Achilles’ heel: The vaster a company’s operations, the more vulnerable it becomes to jarring events around the world, including natural disasters, political upheaval, industrial actions, mistreatment of workers in suppliers’ factories, and damaging effects of climate change.
Yossi Sheffi has been writing about transportation, logistics, and supply chain management since as far back as 1985, when he published Urban Transportation Networks. Since then, he has tackled a variety of topics important to supply chain managers, including logistics clusters and supply chain resiliency. A professor at the Massachusetts Institute of Technology, where he serves as Director of the MIT Center for Transportation & Logistics (MIT CTL), he is an expert in systems optimization, risk analysis, and supply chain management.
By Laura Krantz GLOBE STAFF OCTOBER 07, 2015. A pilot program at the Massachusetts Institute of Technology allows learners to earn a master’s degree by completing the first semester online and the second on the Cambridge campus, president L. Rafael Reif revealed Wednesday. The new arrangement is initially limited to MIT’s one-year program in supply chain management, which is designed for midcareer professionals. Reif said the rising cost of higher education plus the capabilities of Internet learning motivated the school to try the idea.
MIT announced today a pilot program allowing learners worldwide to take a semester’s worth of courses in its top-ranked, one-year Supply Chain Management (SCM) master’s program completely online, then complete an MIT master’s degree by spending a single semester on campus.
The United Nations now estimates that 90 percent of the world’s population has access to improved drinking water. But the story of access to safe drinking water is more complex, especially when it comes to the 2.7 billion people who live on less than $2 a day: In developing countries around the world, tens of millions of people rely on water filtration and purification products each year to improve their drinking water in the absence of proper infrastructure providing clean water.
Logistics are the core of any business, large or small. You won’t be in business long if your supply chain doesn’t function well. But logistics, in turn, can depend on forces outside a company: things like transportation infrastructure and public support for it, as well as new technologies. To learn more about the trends in logistics, Wall Street Journal Deputy Managing Editor Gabriella Stern talked to Chris Caplice, executive director of the Center for Transportation and Logistics at the Massachusetts Institute of Technology, and Matthew Rose, executive chairman of BNSF Railway Co.
By Bruce Arntzen. Many companies have made great strides in recent years to prepare for supply-chain disruptions from a range of events, from natural disasters to man-made crises. Yet they don't prepare for recessions. A look at the calendar says they should. Major financial quakes have occurred once every seven years, on average, over the last 50 years. The last one struck in October 2008, and caused the worst economic downturn in several generations.
By Yossi Sheffi. Unexpected events — ranging from extreme weather to product contamination — can easily disrupt businesses in today’s complex, interconnected global economy. The good news? A company can substantially increase its resilience by improving its ability to detect — and respond to — disruptions quickly. In 2008, the Black Thunder mine in Wyoming’s Powder River Basin — the largest coal mining complex in the United States, owned by St. Louis, Missouri-based Arch Coal Inc. — planned to install a massive new conveyer tube to move coal to a silo for loading trains.
September 21, 2015 (Cambridge, MA). The second installment of the MIT Center for Transportation & Logistics’ (MIT CTL) ground-breaking online supply chain course, Supply Chain and Logistics Fundamentals, will start on September 30th, 2015. Called Supply Chain Design, the SC2x course is part of the three-part SCx series and will run for 12 consecutive weeks. A year ago MIT CTL opened a new chapter in supply chain education with the launch of its SCx online program.
By Zyad El Jebbari. The handicraft industry in Morocco represents more than 9% of the country’s GDP and employs over 2 million people. Yet artisans struggle to expand the global market for their products, with total exports accounting for a mere 8% of the industry’s revenue. The primary overseas market for these products is the United States, which generated about $10 million of revenue in 2013.
How can companies prepare for disruptions? What are the best ways to analyze risks and increase an organization's overall resilience? “We start by thinking about what can go wrong,” says Yossi Sheffi. In an August 2015 webinar, Sheffi, director of the MIT Center for Transportation and Logistics and a renowned expert on supply chains, risk management, and resilience, shared insights and examples from his latest research. His new book, The Power of Resilience: How the Best Companies Manage the Unexpected, is out this month from MIT Press.
By Yossi Sheffi
By James B. Rice, Jr.
Market and industry dynamics are constantly changing. The emergence of omni-channel retailing, wide fluctuations in energy prices that require supply chain designs to be revisited, and the impact of mega-size container ships on global operations are just a few examples of these changes.
"Arcturus" sustains 60mph using the same energy as a hairdryer. Photo: Chris Penticoff.
Sarah J. Smith, Communications Specialist
MIT Center for Transportation & Logistics
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By Alexis H. Bateman
The U.S. House of Representatives recently passed legislation that would remove state-level authority to require companies to show when a food product contains genetically-modified organisms, or GMOs.
Officially called the Safe and Accurate Food Labeling Act, the bill is the result of a growing push by consumers for more information about the contents of the products they buy. Some companies have objected to the potential new requirements, arguing that it is not possible to capture the complexity and volatility of their supply chains on labels.
By Dr. Yossi Sheffi, LinkedIn Influencer
A shortage of truck drivers has bedeviled the logistics industry for so long, that it’s difficult to imagine a time when filling driver vacancies was not a problem. What is also difficult to fathom is why simply paying these workers more is not a solution.
The lessons learned at this stage can help to avoid missteps before the network has to handle higher product volumes.