DEPARTMENT OF TECHNOLOGY MANAGEMENT AND ECONOMICS DIVISION OF SERVICE MANAGEMENT AND LOGISTICS CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2023 www.chalmers.se Report No. E2023:064 Supply chain resilience: A study of strategies and metrics Master’s thesis in Supply Chain Management Alexander Andersson Hanna Klinga REPORT NO. E2023:064 Supply chain resilience: A study of strategies and metrics Alexander Andersson Hanna Klinga Department of Technology Management and Economics Division of Service Management and Logistics CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2023 Supply chain resilience: A study of strategies and metrics ALEXANDER ANDERSSON HANNA KLINGA © ALEXANDER ANDERSSON, 2023. © HANNA KLINGA, 2023. Report no. E2023:064 Department of Technology Management and Economics Chalmers University of Technology SE-412 96 Gothenburg Sweden Telephone + 46 (0)31-772 1000 Gothenburg, Sweden 2023 Supply chain resilience: A study of strategies and metrics ALEXANDER ANDERSSON HANNA KLINGA Department of Technology Management and Economics Chalmers University of Technology SUMMARY In this thesis, we investigate supply chain resilience strategies and metrics. According to our knowledge, simulation-free research on the assessment of supply chain resilience is scarce. There are a few resilience strategies that are frequently mentioned, such as multiple sourcing and localization, but there are also a large number of other strategies available. This report compiles a broad framework of available supply chain resilience strategies developed based on both the literature and interviews with eleven Assa Abloy Entrance Systems respondents. It can be difficult to measure and comprehend the effects of supply chain resilience, to enable this understanding, a list of 34 metrics indicative of resilient supply chains is presented. Additionally, effects of recent disruptions on Assa Abloy Entrance Systems supply chain have been investigated and summarized into a list of symptoms. We believe that the most valuable implications of this research are the comprehensive lists of metrics and strategies that supply chain managers can use to broaden their understanding of available alternatives. Keywords: Supply Chain Resilience, Robustness, Flexibility, Adaptability, Agility, Collaboration, Visibility, Structure, Strategies, Assessment, Measurement, KPI. Table of Contents Acknowledgement ..................................................................................................................... i List of figures .............................................................................................................................. ii List of tables ............................................................................................................................... iii List of Abbreviations............................................................................................................... iv 1 Introduction ............................................................................................................................ 1 1.1 Background .............................................................................................................................................................. 1 1.2 Purpose and research questions .................................................................................................................... 2 1.3 Scope .................................................................................................................................................................. 3 2 Method 5 2.1 Literature review .................................................................................................................................................. 5 2.2 Data collection ........................................................................................................................................................ 9 2.2.1 Sampling ................................................................................................................................................................ 9 2.2.2 Interview structure ........................................................................................................................................ 10 2.2.3 Documentation ................................................................................................................................................. 11 2.2.4 Ethics ................................................................................................................................................................ 11 3. Theoretical framework ................................................................................................... 12 3.1 Supply chain resilience ..................................................................................................................................... 12 3.1.1 Supply chain resilience determinants .................................................................................................... 12 3.2 Supply chain disruptions ................................................................................................................................. 14 3.2.1 Macro-level disruption: COVID-19 .......................................................................................................... 15 3.2.2 Micro-level disruption: US-China Tariffs .............................................................................................. 16 3.2.3 Man-made disruptions: Russia-Ukraine conflict ............................................................................... 16 3.2.4 The discovery of black swans .................................................................................................................... 17 3.3 Supply chain resilience strategies ............................................................................................................... 18 3.3.1 Inventory management ................................................................................................................................ 19 3.3.2 Sourcing ............................................................................................................................................................... 20 3.3.3 Supply chain design........................................................................................................................................ 22 3.3.4 Product design .................................................................................................................................................. 24 3.3.5 Enhance supply chain collaboration ....................................................................................................... 25 3.3.6 Increasing supply chain visibility ............................................................................................................ 26 3.3.7 Risk management & Corporate culture ................................................................................................. 26 3.4 Measuring supply chain resilience .............................................................................................................. 27 3.4.1 Robustness ......................................................................................................................................................... 28 3.4.2 Flexibility ............................................................................................................................................................ 28 3.4.3 Adaptability ....................................................................................................................................................... 29 3.4.4 Agility ................................................................................................................................................................ 29 3.4.5 Collaboration ..................................................................................................................................................... 29 3.4.6 Visibility............................................................................................................................................................... 29 3.4.7 Supply chain structure .................................................................................................................................. 30 3.4.8 Common characteristics of supply chain resilience metrics ........................................................ 30 3.4.9 “SMART” framework for Key Performance Indicators ................................................................... 31 3.5 Trade-offs when creating a resilient supply chain ............................................................................... 32 4. Empirical data and analysis .......................................................................................... 34 4.1 Assa Abloy .............................................................................................................................................................. 34 4.1.1 Assa Abloy Entrance Systems .................................................................................................................... 34 4.1.2 Assa Abloy Entrance Systems supply chain ........................................................................................ 35 4.1.3 Assa Abloy Entrance Systems Industrial Ostrov Factory .............................................................. 37 4.2 Symptoms of disruptions on Assa Abloy Entrance Systems supply chain ................................ 38 4.2.1 COVID-19 ............................................................................................................................................................ 39 4.2.2 Russia-Ukraine War ....................................................................................................................................... 43 4.2.3 US-China tariffs ................................................................................................................................................ 44 4.3 Case projects ......................................................................................................................................................... 45 4.3.1 Project A - Inventory placement and sizing ........................................................................................ 45 4.3.2 Project B - Supplier involvement initiative .......................................................................................... 47 4.4 Mitigating strategies and future initiatives at Assa Abloy Entrance systems .......................... 48 4.5 Gap analysis of absent supply chain resilience strategies at Assa Abloy Entrance Systems ............................................................................................................................................... 51 5. Discussion ............................................................................................................................ 52 5.1 Improving supply chain resilience .............................................................................................................. 52 5.1.1 Supply chain resilience strategies ........................................................................................................... 52 5.1.2 Measuring supply chain resilience .......................................................................................................... 55 5.2 Disruption impacts on Assa Abloy Entrance Systems supply chain ............................................ 58 5.2.1 Consolidated symptoms ............................................................................................................................... 58 5.3 Improving Assa Abloy Entrance Systems supply chain ..................................................................... 59 5.3.1 Appropriate supply chain resilience strategies for Assa Abloy Entrance Systems ............................................................................................................................................... 59 5.3.2 Exemplifying resilience strategies at Ostrov factory....................................................................... 61 5.3.3 Introducing resilience metrics .................................................................................................................. 63 5.3.4 Exemplifying resilience metrics at Ostrov factory ........................................................................... 64 6. Conclusion ............................................................................................................................ 67 6.1 Managerial implications .................................................................................................................................. 67 6.2 Further research ................................................................................................................................................. 67 References ............................................................................................................................... 69 Appendix 1 ................................................................................................................................ 77 Appendix 2 ................................................................................................................................ 79 Acknowledgement This master's thesis was conducted in the spring of 2023 as a final assignment for the M.Sc. in Supply Chain Management at the Chalmers University of Technology. The report was produced in collaboration with Assa Abloy's Entrance Systems division. We would like to convey our gratitude to Fredrik Helgesson, our supervisor at Assa Abloy Entrance Systems, who has provided excellent guidance throughout this project. We appreciate your assistance in connecting us with the appropriate supply chain professionals at Assa Abloy Entrance Systems and your insightful commentary on the subject of supply chain resilience. In addition, we would like to express our gratitude to all of the interviewees who helped us comprehend how Assa Abloy Entrance Systems responded to the disruptive events of recent years. Finally, we are grateful to docent Gunnar Stefansson, our supervisor and examiner at Chalmers, for assisting us in presenting our content in a structured manner and ensuring that we stay on track. List of figures Figure 1 ..................................................................................................................... 3 Figure 2 ..................................................................................................................... 4 Figure 3 ..................................................................................................................... 5 Figure 4 ................................................................................................................... 15 Figure 5 ................................................................................................................... 17 Figure 6 ................................................................................................................... 33 Figure 7 ................................................................................................................... 34 Figure 8 ................................................................................................................... 35 Figure 9 ................................................................................................................... 36 Figure 10 ................................................................................................................. 41 Figure 11 ................................................................................................................. 42 Figure 12 ................................................................................................................. 44 Figure 13 ................................................................................................................. 45 Figure 14 ................................................................................................................. 47 Figure 15 ................................................................................................................. 52 Figure 16 ................................................................................................................. 54 Figure 17 ................................................................................................................. 56 Figure 18 ................................................................................................................. 57 Figure 19 ................................................................................................................. 60 List of tables Table 1 ...................................................................................................................... 6 Table 2 ...................................................................................................................... 7 Table 3 ...................................................................................................................... 8 Table 4 .................................................................................................................... 10 Table 5 .................................................................................................................... 14 Table 6 .................................................................................................................... 16 Table 7 .................................................................................................................... 19 Table 8 .................................................................................................................... 32 Table 9 .................................................................................................................... 37 Table 10 .................................................................................................................. 38 Table 11 .................................................................................................................. 39 Table 12 .................................................................................................................. 46 Table 13 .................................................................................................................. 48 Table 14 .................................................................................................................. 49 Table 15 .................................................................................................................. 50 Table 16 .................................................................................................................. 51 Table 17 .................................................................................................................. 58 Table 18 .................................................................................................................. 63 Table 19 .................................................................................................................. 66 List of Abbreviations KPI Key Performance Indicator SCRES Supply Chain Resilience SKU Stock Keeping Unit 1 Introduction The aim of this section is to introduce the purpose of the thesis and provide the reader with a brief understanding of the subject resilience and how it is relevant to Assa Abloy Entrance Systems. Three research questions will be presented which will reflect what the thesis will be focusing on, along with the scope of the project. 1.1 Background Normally, supply chains operate behind the scenes, unseen by end consumers. However, in times of disruption, such as the most recent and well-known COVID-19 pandemic, supply chains are brought to light because of breakdowns in efficiency. When the flow of materials and people is severely disrupted, unanticipated vulnerabilities are revealed, leaving organizations impacted for years afterwards. As a result of the enormous effects that various disruptions have on supply chains, interest in the subject of resilience massively increases, as is demonstrated by the number of academic articles released around the time of a disruption. (Sombultawee et al., 2022). As a result of globalization, global supply chains have grown longer and more complex (Andersson, 2009). To achieve success with economies of scale, companies must inevitably expand internationally. It opens up a number of opportunities, including access to resources and the opportunity to reduce a company's expenses by selecting suppliers in regions with, for instance, lower labor costs. The trade-off, however, is an increased risk of greater impact from disruptions due to longer geographical distances and a higher level of complexity in supply chain network connections. Consequently, attention to supply chain resilience and methods for enhancing it have increased significantly. There are enormous opportunities for businesses to gain market share if they are able to maintain the last viable supply chain and be the most dependable company during a disruption (Andersson, 2009). The optimization of return on investment (ROI) and finding a balance between a cost- effective, sustainable, and reliable supply chain while maintaining a high customer service level is one of the greatest challenges supply chains face today. Assa Abloy Entrance Systems is one of Assa Abloy's seven divisions and a global manufacturer with facilities and suppliers in every continent. They offer a variety of doors for use in commercial and industrial settings. As part of their business strategy, they put emphasis on their customer service level, and their goal is to have spare parts available within 24 hours (Assa Abloy, 2022). Recent disruptions, the COVID- 19 pandemic, and the Russian-Ukrainian conflict have had significant effects on Assa Abloy Entrance Systems supply chain. As a result of the COVID-19 pandemic, there have been shortages of certain components from suppliers. This has prompted the company to examine redundancy in the supply chain and consider alternative methods of placing strategic inventory along the supply chain in order to be better prepared for future material disruptions. In the aftermath of COVID-19, there are also positive insights to be gained from analyzing processes that worked well, which are essential to consider and preserve in the organization. Assa Abloy Entrance Systems was fortunate to have implemented a "supplier involvement" initiative prior to the COVID-19 pandemic, which increased transparency and information sharing between one of its factories and suppliers. Afterward, they realized the importance of timely and accurate information from the suppliers for the factory's ability to plan and respond to potential material shortages or transport delays. 2 An effect of the Russia-Ukraine conflict is that prior to the conflict, they utilized railways along the Silk Road to transport goods from Chinese suppliers to European factories. Due to geopolitical constraints, it was no longer feasible to use these railway solutions. As a consequence, Assa Abloy Entrance Systems had to switch from rail to sea transport, resulting in a lead time increase of five weeks. For top and middle management at Assa Abloy Entrance Systems alike, supply chain resilience is now one of the items on top of the agenda. Prior to the recent major events, they had undergone efforts to move their supply base to China. According to present supply chain trends, many companies are looking at increasing inventories, dual sourcing, and moving their whole supply base closer to their factories. This is a costly and lengthy process, which raises the question for Assa Abloy Entrance Systems about whether it is possible to improve their supply chain resilience without continuously changing their supply base or not. 1.2 Purpose and research questions Traditional supply chain management did not consider supply chain resilience, instead focusing on the influence of supply chain decisions on cost and service level (Ivanov et al., 2019). In light of the current state of the world, which is characterized by a growing number of major disruptions, the purpose of this thesis is to highlight the effects that disruptions have caused and what organizations can do to improve the supply chain resilience, the ability to deal with disruptions in the future. Further on, it will serve as an inspiration for Assa Abloy Entrance Systems and suggest how they can improve their upstream supply chain resilience. The thesis will achieve its objective by addressing the three research questions listed below. The aim of the first research question is to present a framework of available supply chain resilience-improving strategies for organizations. The framework will include strategies found both in the literature, and from empirical data when investigating two previous case projects that have been implemented by Assa Abloy Entrance Systems. In addition, there is no magic formula for calculating the resilience of a company's supply chain; however, relevant Key Performance Indicators (KPIs) that can serve to illustrate resilience will be presented in order to better understand how to assess supply chain resilience. The combination of a literature study and two real case studies will contribute to a broad overview of possible strategies as well as a deeper understanding of what effects that implementations of supply chain resilience strategies can result in. RQ1: How can organizations improve the resilience of their upstream supply chains? The second research question is related to recent disruptions and their impacts. COVID-19, the Russia-Ukraine conflict, and other events have harmed the supply chain of Assa Abloy Entrance Systems. It is unclear, however, precisely what effects it had. Therefore, the effects that various disruptions have had on Assa Abloy Entrance Systems supply chain, from the first-tier supplier to the factory assembly, will be summarized in a symptomlist. RQ2: What impacts have previous disruptions had on Assa Abloy Entrance Systems supply chain? The third research question will incorporate the resilience strategy and measurement theory, the effects of disruptions, as well as the context of three of Assa Abloy 3 Entrance Systems segments. The objective is to present recommendations of actions that Assa Abloy Entrance Systems may take to improve their supply chain resilience. RQ3: What are the main areas and actions Assa Abloy Entrance Systems may focus on to prepare for future supply chain disruptions? 1.3 Scope Micro-level strategies are divided into six subcategories by Rahman et al. (2022): supply, demand, manufacturing, information, transportation, and financial management. These areas served as inspiration for the thesis, which was then modified and restricted to include only literature from the fields of information, logistics, and supply. The areas were selected based on what appeared to be most relevant for an external stakeholder to analyze. The scope encompasses Assa Abloy Entrance Systems upstream supply chain from their first-tier supplier to their factories and delimits their downstream supply chain from their factories to their customers. Figure 1 illustrates the project's scope. Figure 1 Project scope The work is constrained to the Assa Abloy Entrance System division and not the entire Assa Abloy organization. In order to increase the sample size, data collection for supply chain resilience initiatives is conducted across segments within the Assa Abloy Entrance Systems division. In contrast, the empirical scope for the third research question is limited to the industrial, pedestrian and residential segments within the Entrance Systems division. Within the industrial segment, an operator factory in Ostrov, Czech Republic, that operates the controllers for the industrial segment will be analyzed in further detail. The Ostrov factory was chosen as it was the site where we had access to most information. The limitations within Assa Abloy Entrance Systems are depicted in Figure 2. 4 Figure 2 Empirical scope Through interviews, the impacts of recent disruptions on Assa Abloy Entrance Systems’ supply chain will be analyzed. However, because the scope ends at Assa Abloy Entrance Systems’ facilities, customer-side effects will not be considered. In addition, the work will be restricted to events and disruptions that have occurred within the last four years, limiting the range from 2019 to 2023. 5 2 Method This thesis is divided into three sections, mandating the use of distinct data collection techniques to address the three research questions. To answer research question one, the information has been gathered from literature regarding strategies and metrics, and empirical data including data from case projects and mitigating strategies performed by Assa Abloy Entrance Systems that show positive effects on supply chain resilience. For the purpose of addressing research question two, theoretical data was first gathered to be able to guide the interviews. Secondly, empirical data regarding how Assa Abloy have been affected by previous disruptions have been collected to get an overview of the situation and whether there are areas especially critical to look at in the future. Finally, the third research question analyzes the strategies covered in literature and empirical data to derive suggestions of future supply chain resilience improvements for Assa Abloy Entrance Systems. Figure 3 A summary of the parts that belong to each research question 2.1 Literature review The procedure was organized as follows: As search criteria, particular keywords were selected. The terms supply chain, supply chain resilience, and management were used to locate books covering the fundamentals of supply chain resilience. At the outset of the literature evaluation, selection criteria for the literature were established. The complete list of selection criteria is presented in Table 1. The books helped us expand the list of keywords used for supply chain resilience strategies and discover additional definitions for the same topic, such as proactive, 'Readiness', 'Concurrent', 'Reactive', and 'Growth'. Following this, literature reviews, such as those by Rahman et al. (2022) and Han et al. (2020), were used to gain an overview of the available publications on the topic. Multiple sources were discovered through a cascading effect initiated by the literature evaluations. The literature reviews and snowballing process generated keywords for supply chain resilience strategies, such as 'Preparedness,' 'Response,' and 'Recovery,' and keywords for relevant resilience capabilities, such as 'Flexibility,' 'Robustness,' 'Adaptability,' 'Density,' and 'Visibility'. These were used for a more structured process to increase our comprehension of 6 the literature and fill in the gaps that the snowballing method did not address. The complete list of keywords is presented in Table 2, and the search structure is summarized in Table 3. Various academic databases, such as Chalmers Library and Google Scholar, were used to locate relevant articles, and the material was published by a number of different publishers, such as Emerald, Elsevier, Springer, IEEE, and Harvard Business Review. Finally, several news forums were searched for up-to-date information on the topic of resilience. Table 1 Selection criteria Selection criterion Motivation Literature written in English English is the main language when discussing supply chains. As an example, Swedish literature could lead to confusion of terms and misunderstanding. Literature that discusses components included in the concept of supply chain resilience. The thesis aims to answer what supply chain resilience is Literature that discusses how supply chain resilience can be measured. The thesis aims to answer what supply chain resilience is and arguably measurements is a good method to make supply chain resilience tangible. Literature that discusses resilience strategies for supply chain resilience as a whole or a single capability. The thesis aims to discuss strategies and their tradeoffs in the context of Assa Abloy Entrance Systems. Literature that discusses resilience on the upstream side of the supply chain including the areas of supply, information, and logistics. The thesis is limited to these three areas and the downstream side of the supply chain is filtered out. 7 Table 2 Keywords used in literature review Review stage Keywords used Find Books ‘Supply chain’, ‘Resilience’’, ‘management’ Find literature reviews ‘Supply chain’, ‘Resilience’, ‘strategies’, ‘Review’ Rest of the literature ‘Supply chain’, ‘Resilience’, ‘Strategies’, ‘information’, ‘logistics’, ‘supply’, ‘Flexibility’, ‘Redundancy’, ‘Agility’, ‘Robustness’, ‘Adaptability’,‘Collaboration’, ‘Visibility’, ‘Control’, ‘Design’, ‘Density’, ‘Complexity’, ‘Node criticality’, ‘Assessment’, ‘Measure’, ‘Metrics’ ‘Index, ‘Disruption’, ‘Risk’, ‘COVID- 19’, ‘Russia-Ukraine’ 8 Table 3 Structured literature search for supply chain resilience strategies and measures Keyword Delimitation Hits Used Snowballed Supply chain resilience Chalmers lib Print books 5 3 Supply chain management Chalmers lib Print books 20 2 “Supply chain resilience strategies” AND “Literature review” Chalmers lib 20 (13) 1 7 “Supply chain resilience strategies” AND (information OR logistics OR supply), including snowballing from these articles. Chalmers lib 94(17) 4 6 "Supply chain resilience" AND (KPI OR "Key performance indicator" OR ASSESSMENT OR MEASURE OR INDEX OR Metrics) AND (Flexibility OR Redundancy OR Agility OR Robustness OR Adaptability OR Collaboration OR Visibility OR Control OR "Supply chain design" OR "Supply chain density" OR "Supply chain complexity" OR "Node criticality") Chalmers lib abstracts 305 (38) 5 25 Note: () = Browsed through The review of relevant literature focuses primarily on the supply chain characteristics associated with resilience, as well as the three dimensions of supply chain resilience strategies: preparedness, response, and recovery, and similar definitions. On the 9 upstream side of a supply chain, the strategies will concentrate on how to approach resilience in three distinct areas: information, logistics, and supply. Measuring the effects of supply chain resilience can be challenging, but creating a measurement of an abstract area may be an effective way to concretize it. Consequently, literature on measuring and evaluating supply chain resilience has been included. In addition, the literature on recent disruptions is reviewed in order to explain the global effects and to understand the problems confronting supply chains. This provided support for the semi-structured interviews regarding the disruptions and effects at Assa Abloy Entrance Systems. 2.2 Data collection The different methods and structures used to obtain relevant data for the thesis are explained further in this section. 2.2.1 Sampling Early on in the research process, interviews were conducted to understand the events that disrupted Assa Abloy Entrance Systems operations and the problems they caused. Multiple sampling techniques were utilized to compile the list of events that disrupted Assa Abloy Entrance Systems supply chain. A snowball approach, as described by Bell et al. (2019), was used to generate the initial list of Assa Abloy Entrance Systems interviewees, which included two top-level managers. We added the additional criterion that the employee must have worked on supply chain issues at Assa Abloy Entrance Systems for at least four years to ensure that the interviewee has primary knowledge of recent events. According to Bell et al. (2019), the primary determinant for the number of interviews conducted is data saturation; thus, the sampling was conducted sequentially, with new interviews added as new events and problems arose. Compared to the median sample size in business research, the symptom list sample size is relatively small (Bell et al., 2019). As a result, when data saturation became apparent because no new problems were discussed, we conducted an interview with our supervisor at Assa Abloy Entrance Systems, who has a comprehensive understanding of supply chain issues, to confirm that the data had been exhausted. There is a summary of the interviews in Table 4. In order to collect data for the case projects, snowball sampling was also employed. First, the Material Management Director and the Vice President of Operations were consulted regarding which projects were appropriate, followed by interviews with the resilience project managers. 10 Table 4 List of interviewed employees to create a symptomlist and to understand previous case projects initiated by Assa Abloy Entrance Systems Nr Interview Role Subject Business Unit 1 Category Manager AAES Electronics Symptomlist ESD Göteborg 2 Sourcing director Symptomlist ESD Landskrona 3 Plant Manager Symptomlist IDS Ostrov 4 Senior Sourcing Specialist Symptomlist IDS Ostrov 5 Material Management Director Symptomlist ESD Landskrona 6 Supply Chain Controller Symptomlist PDS Landskrona 7 Logistics manager Symptomlist Landskrona 8 Logistic Manager Project B ESD Production Romania 9 Master Planner Manager Silkroad Pilot Project Project A & symptomlist PDS Landskrona 10 Sourcing Director Symptomlist IDS 11 Global Sourcing Manager PDS Project A & symptomlist PDS 2.2.2 Interview structure As it is a flexible interview structure, all sessions of interviews were conducted in a semi-structured manner (Bryman & Bell, 2011). A flexible structure may be appropriate for answering our research questions, given that management may not be aware of all problems that have arisen as a result of disruptions. To allow the interviewee to relate the story from their perspective and to ensure that no issues were overlooked, a primarily inductive approach was used. Although the scope was limited, the interviewee was requested in advance to discuss information, logistics, and supply; thus, there are hints that a deductive method was used to structure the interview and the answers and prevent scope creep. The categories of information, logistics, and supply were selected because the topics related to previous pilot 11 projects at Assa Abloy Entrance Systems and were covered in the literature on supply chain resilience. Before conducting interviews, research was done on the general supply chain effects of COVID-19 and the Russia-Ukraine conflict. This allowed us to inquire about the general effects of the events if the interviewee did not address the specific topic in their narrative. As a result, none of the interviewees were discouraged from discussing a topic that did not precisely align with the interview guide, as doing so could yield new insights. An interview guide was also provided to interviewees prior to the scheduled meeting in order to increase the credibility of the interviews. The interviews were documented and summarized before being sent to the interviewee for validation and any additions that the interviewee deemed significant but that had not been addressed. The qualitative data from the interviews were coded into the categories of supply, information, and logistics; however, the summaries are not included in this report. This resulted in a consolidated summary of issues that occurred due to recent disruptions. The results of the second round of interviews are project descriptions and the effects of the projects on various KPIs. 2.2.3 Documentation Internal documents, e.g., company and division presentations, supply chain overviews, KPI performance reviews, were used to establish the company description and provide quantitative data as a complement to the interviews. Access to the firm's business intelligence tool was also granted to complement data regarding the supply chain. 2.2.4 Ethics Assa Abloy AB is a Stockholm stock exchange-listed corporation. Press releases ought to be used to disseminate new information to the public. This thesis shall not contain any confidential supplier or operational information. Assa Abloy Entrance Systems will exhaustively review the thesis to ensure that this is the case. Bryman and Bell (2011) discuss the significance of not exploiting a position, as a student might do by extracting information from competitors that Assa Abloy Entrance Systems could use to its advantage. All interviewees for this report were internal, therefore, this is not a concern. 12 3. Theoretical framework This section seeks to provide an academic literature-based definition of supply chain resilience. It will also include examples of recent supply chain disruptions discussed in the literature and the general effects they have had on supply chains. In addition, common supply chain strategies for enhancing supply chain resilience in the information, logistics, and supply domains will be presented, as will several KPIs that can be used to measure supply chain resilience. The section concludes with a discussion of the trade-offs that arise when developing a resilient supply chain. 3.1 Supply chain resilience There are numerous definitions of supply chain resilience, but what they all have in common is the ability of supply chains to withstand foreseeable and unforeseeable disruptions to their normal operations (Kummer et al., 2022). There is also a distinct relationship between the definitions of resilient supply chains and time. Resilient supply chains recover to normal or enhanced operations on schedule or as quickly as feasible. According to Andersson (2009), resilient supply chains can both withstand and recover quickly from unanticipated disruptions. Falasca et al. (2008) define supply chain resilience as the ability to reduce the likelihood of disruptions, reduce the impact of disruptions, and increase the pace of recovery. Based on the three pillars of preparedness, response, and recovery, Rahman et al. (2022) compile a definition of supply chain resilience strategies. Ali et al. (2017) define similar dimensions as proactive, concurrent, and reactive. In addition, Kummer et al. (2022) observe that the literature distinguishes a fourth dimension from recovery, which they refer to as growth, or the capacity to emerge from disruption as a more effective organization. The authors of Vugrin et al. (2011) describe three system capacities that a resilient supply chain must possess: absorptive capacity, adaptive capacity, and restorative capacity. Absorptive capacity is defined as the extent to which a system can absorb the effects of disturbances with minimal consequences and effort. According to Vugrin et al. (2011), the difference between adaptive capacity and restorative capacity is that adaptive capacity is more concerned with temporary changes in a situation, while restorative capacity is more concerned with enduring changes in a system's capability. 3.1.1 Supply chain resilience determinants Supply chain resilience increases as characteristics of resilience are enhanced and vulnerabilities are reduced (Pettit et al., 2019). However, it is difficult to comprehend the disruptions and the consequences of disruptions that firms are able to avoid due to their resilience capabilities, making it difficult to calculate the return on investment of decisions intended to make the supply chain more resilient. In his research, Andersson (2009) argues that for a supply chain to be resilient, it must possess a combination of robustness, flexibility, and adaptability. The ability of a supply chain to withstand and avoid the effects of unanticipated disruptions serves as a gauge of its robustness. Creating inventory along the supply chain that can be utilized in the event of a production delay could exemplify robustness. Flexibility refers to the supply chain's responsiveness to disruptions and its willingness to alter its original course to accommodate the new circumstances. It could entail replacing a product's component with a comparable one so that supply chain operations can continue as normal despite a severe disruption to the supply chain. The authors of the article by Herold et al. (2021) provide examples of how air transport providers 13 responded to the COVID-19 pandemic with operational flexibility. They note that DB Schenker modified their passenger aircraft by eliminating seats so that they could transport regular cargo from Asia to the United States and Europe. In addition, Virgin Atlantic redirected one of their passenger planes to transport health supplies between London and Shanghai for the UK Department of Health and Social Care. Consequently, with flexibility, logistics service providers can increase their resilience by developing new capacities for the present circumstances. Adaptability is the capacity to alter operations or strategies in the appropriate direction in response to a disruption (Andersson, 2009). For instance, if a significant portion of the company's structure must be reconstructed, the supply chain can adapt to the prevailing circumstances. Adaptable supply chains have flexible supply chain designs that can alter the supply base, facility location, or even outsource a previously in-house process in response to environmental changes such as market, product, and strategy (Lee, 2004). Agility is a capability discussed in the literature (Han et al., 2020) and is similar to flexibility, with the distinction that it refers to the speed with which flexible actions are performed in response to, for instance, changes in supply or demand (Lee, 2004). Christopher and Peck (2004) claim that agility is composed of visibility and speed. Visibility is defined as the capacity to have a distinct view of the entire supply chain, including knowledge of the environment and assets throughout the entire supply chain (Christopher and Peck, 2004). The ability to see through the supply chain can aid in identifying vulnerabilities and impending issues (Kummer et al., 2022). According to a McKinsey survey of manufacturers, 48% of businesses are familiar with their tier 1 suppliers, 21% with their tier 2 suppliers, and just 2% with their tier 3 suppliers (Sultan, 2022). Occasionally, supply chain visibility may also encompass the visibility of markets or competitors. Control in terms of monitoring potential disruptions and having the information to act on it is an additional aspect of supply chain resilience (Al-Talib et al., 2020), which is sometimes defined as a subset of visibility (McIntire, 2014). The Internet of Things (IoT) is extensively discussed in relation to this topic, and the benefits of supply chain resilience can be illustrated by using IoT to track shipments and control inventory. Kummer et al. (2022) include supply chain collaboration among the characteristics of resilient supply chains. Due to the interdependence of businesses, achieving resilience individually is difficult (Cao & Zhang, 2013). Collaboration is characterized by the formation of cooperative, typically long-term relationships. Actors in a relationship can share tangible and intangible resources that complement one another, as well as coordinate activities in an efficient and synchronized manner. Visibility could enable collaborations related to, for example, aligning inventory levels or sharing forecast information. Although collaboration with suppliers is generally viewed as a good thing, there is also the issue of dependability: if the supply chain is too dependent on a single partner, flexibility is compromised (Ralston & Blackthurst, 2020). The structure of the supply chain plays an essential role in ensuring resilience. Craighead et al. (2007) identify three structural determinants of supply chain resilience: density, complexity, and the number of critical nodes in the network. If a supply chain is dense and has a large portion of its supply base in a single location, it tends to be more vulnerable. As supply chain complexity increases beyond a certain threshold—that is, as the number of flows and actors in the system increases—the likelihood that disruptions will have a significant effect tends to rise. Similarly, the supply chain tends to be more vulnerable the more actors it depends on for its functionality. 14 The supply chain resilience deterministics discussed in this report are interrelated (Mandal et al., 2016). Visibility in the supply chain facilitates collaboration, as it is difficult to collaborate and improve the supply chain if the relevant actors and information are unknown. Moreover, supply chain collaboration is frequently a requirement for both flexibility and adaptability, as it would be impossible to reconfigure the supply chain or have alternative options if the supply chain partners did not permit it. Similarly, supply chain flexibility is essential for supply chain agility, as agility is defined as the rate at which flexible actions are executed. Table 5 Supply chain resilience determinants derived from literature review SCRES determinants Description Robustness Coping with disruptions Flexibility Changing operations Adaptability Changing structure and strategy Agility The speed of flexible actions Collaboration Degree of resource sharing and coordination Visibility Access to information from suppliers and about supplier, about goods and the environment Structure Supply chain design 3.2 Supply chain disruptions There are two categories of disruptions: macro- and micro-level disruptions. According to Rahman et al. (2022), macro-level disruptions have extensive effects on supply chains over an extended period of time and occur infrequently. Micro-level disruptions, on the other hand, occur frequently on a daily basis but affect the supply chain for a shorter period of time. Micro-disruptions are more predictable and easier to recover from. Although Rahman et al. (2022) label all as disruptions it could also be mentioned that some literature makes a distinction between operational disruptions and disasters, where disasters are similar to the macro-level disruptions (Wide, 2021). In Figure 4, examples of disruptions in the two categories are provided. Extreme weather, factory and trucker strikes, trade restrictions, and cyber disruptions were the leading causes of supply chain disruptions in 2022, according to the global value chain barometer for 2022 (Hong & Betti, 2023). According to Hong & Betti (2023), the most important actions towards more resilient supply chains in 2023 are diversifying the supplier base and conducting financial stress tests to comprehend the effects of a recessionary environment. 15 Figure 4 Examples of macro- and micro-level disruptions (Rahman et al., 2022) 3.2.1 Macro-level disruption: COVID-19 The COVID-19 pandemic, which started at the beginning of 2020, was a challenging time for supply chains globally. The supply side experienced major disruptions, and capacity at supplier sites was drastically reduced due to health-related reasons (Kummer et al., 2022). In addition, there were shortages of raw materials, such as construction materials, and components, such as computer chips. Initially, there was a decline in demand for metals among other commodities, but it soon recovered alongside the price increase (Yu et al., 2021). Numerous commodities, including lumber and concrete, experienced a price increase (Alsharef et al., 2021). Drastically and rapidly changing consumption patterns as well as hoarding tendencies made it even harder to deal with supply shortages for some industries (Kummer et al., 2022). This led to bullwhip effects, which emphasize the importance of supply chain collaboration and information sharing. Since frequent passenger transport became unprofitable for airlines, the available midsection cargo capacity has been reduced to 25% of the 2019 capacity (Kummer et al., 2020). Approximately half of available air transport capacity is typically devoted to belly cargo. At the beginning of the COVID-19 outbreak, China's ports were closed for approximately two months. The shipping companies also anticipated a significant decrease in demand, so they slowed down, bypassed ports that are typically a part of routes, and decommissioned ships to reduce capacity (Kummer et al., 2022; Zhang & Adrian, 2023). As the demand for maritime transport recovered rapidly, the supply was inadequate, resulting in price increases up to ten times those of 2019 (Kummer et al., 2022). See Table 6 below for a breakdown of route-specific price increases 16 (Zhang & Adrian, 2021). The rapid recovery of demand led not only to price increases but also to congestion at ports, which lengthened transit periods for ocean transport (Kummer et al., 2022). Simultaneously with COVID-19, the Suez Canal obstruction occurred on March 23, 2021, which had a significant impact on ocean transport congestion and lead times. Table 6 Changes in spot freight shipping rates. Adjusted from (Zhang & Adrian, 2021) Route Change between Nov 2020 and Nov 2021 Shanghai - Rotterdam 522% Rotterdam - Shanghai 44% Shanghai - Genoa 373% Shanghai - Los Angeles 138% Los Angeles - Shanghai 149% Rotterdam - New York 204% New York - Rotterdam 115% Composite Index 252% 3.2.2 Micro-level disruption: US-China Tariffs In July 2018, the Trump administration imposed 25 percent tariffs on Chinese-origin commodities imported into the United States (Office of the United States Trade Representative, 2018). Although some tariffs were eliminated by the Biden administration in 2021, there are still tariffs on more than 300 product categories (Lawder, 2022). Various rules determine the country of origin, but ultimately, U.S. Customs and Border Protection determines the country of origin (Yuanyou, 2019). For instance, the country of origin could be determined based on where the majority of the product's value originates, where the most significant transformation occurred, or where the product's harmonized system code was retrieved (Andersson & Olsson, 2021). 3.2.3 Man-made disruptions: Russia-Ukraine conflict Russia provides 40% of Europe's natural gas and 25% of Europe's oil, which account for 40% and 25% of European consumption, respectively (Ngoc et al., 2022). Consequently, the conflict led to higher energy prices and, as a result, higher transportation and production costs. From the beginning of the conflict in February 2022 to September of the same year, gas and electricity prices in Europe more than doubled (Ferriani & Gazzani, 2022). This has had a significant impact on the financial performance of businesses, according to Ferriani and Gazzani (2022). High gas prices caused a domino effect on other energy sources, such as biomass, resulting in price increases of over 60 percent in Latvia (Prohorovs, 2022). After the conflict, prices of metals, steel, and aluminum, among others, soared; for example, steel 17 prices increased by approximately 15% per month (Sathe, 2022). Ukraine is a major steel producer. Russia and Ukraine account for 15% of the global seafarer labor force, which, combined with the rising cost of energy, increases transportation costs and port congestion (Seckute, 2022). The increase in energy prices has affected all transportation costs (Kiss, 2022). Ports and sea routes in the Black Sea and Sea of Azov have been closed due to military activity (Ngoc et al., 2022; Sathe, 2022). However, freight trains are permitted to proceed through Russia without stopping (Kiss, 2022). The majority of businesses continue to avoid Russia for security considerations. Instead, the central corridor is frequently followed. Additionally, the Russia-Ukraine conflict has resulted in longer transportation routes, which, along with the increase in energy costs, contribute to the price increase. Figure 5 Part of the middle corridor route which starts at Lianyungang port in east coast China 3.2.4 The discovery of black swans Long ago, all swans observed in the western hemisphere were white, leading zoologists to believe that all swans were white. Australia was discovered in the 17th century, along with the black swans that inhabited the continent. Taleb (2008) employs the metaphor of the black swan to illustrate how unreliable prior observations can be. This concept can be applicable to supply chain disruptions. Although the COVID-19 pandemic may not have been completely unpredictable and could have been classified as a "gray swan," it was exceedingly difficult to foresee the global supply chain effects of such an event. A search for the terms "supply chain resilience" AND "pandemic" returned over 4000 results, but only 95 were published prior to 2019. The pandemic could be considered a low-probability, high-impact event. However, it is essential to keep in mind that the set of low-probability, high- impact events may be much larger than imagined, and the probability may be much higher collectively (Taleb, 2007). This is illustrated by a quotation from the supply chain manager at Flextronics: "I have 14,000 suppliers. I guarantee that at least one of the 14000 suppliers is not performing well today." (Sheffi, 2015). If the emphasis 18 on "I" is disregarded, this quote provides supply chain managers with an important lesson. According to Taleb (2008), humans are extremely poor at both considering and estimating the effects of black swans; this is consistent with Tang (2006), who suggests that the difficulty of estimating probability and effects is the primary reason resilience efforts are typically ineffective. Table 11 of symptoms of disruptions in Section 4.2 demonstrates that there are a lot of effects to consider, and those are just the known ones. It is simpler to answer the question of what effects any event would have on financials if it disrupts supply, as estimating probabilities is no longer a factor (Simchi-Levi et al., 2014). In addition, humans have a tendency to construct narratives about past events, which can lead us to incorrectly associate causal relationships between events and their effects. This is called the "narrative fallacy" by Taleb (2008). The approach regarding black swans (Taleb, 2008) suggests preparedness in general. The problem can also be simplified by using extremely conservative estimates, and if the investment in a particular supply chain resilience strategy still provides a strong business case, it should be pursued. As the famous Benjamin Franklin quote "An ounce of prevention is worth a pound of cure" implies, it is generally far more effective to prevent a problem than to respond to it and recover from it. Having a variety of contingency plans in place in advance of disruptions can significantly reduce recovery time and prevent long-term harm to brand image and customer relations (Sheffi, 2015). 3.3 Supply chain resilience strategies This section introduces supply chain resilience strategies derived from the resilience determinants in section 3.1.1. The following sections aim to exhibit strategies that are related to these determinants. 19 Table 7 Summarizing table of all resilience strategies Strategy category Strategies suggested by literature Inventory management Strategic inventory sizing & positioning, time buffers, reserve stock programme, collaborative inventory, vendor-managed inventory, 3PL as inventory manager Sourcing Localization, glocalization, flexible supplier base, economic supply incentives, multiple sourcing, dual sourcing, backup suppliers, build outs, supplier backup capacity, supplier diversification, supplier selection on performance, supplier risk awareness Supply chain design Several structural supply chains, breaking down supply chains into smaller parts, efficient vs responsive supply chains, identical facilities, additional warehouses, backup routes, backup transportation, choice of 3PL provider Product Design Standardization, design for multiple Bill of Materials & alternatives, assortment of diversified items that require different raw materials Supply chain collaboration Horizontal and vertical cooperation, create unbreakable relations with key suppliers, integrate systems, distributing power Supply chain visibility Information sharing, mapping of a firm's supply chain, mapping of transportation network, IoT, blockchain, big data Risk management & Culture Risk management: Scenario analysis & simulations, contingency plans, simplify risk estimations. Culture: Communication, information sharing, rewards and incentives, empowerment & involvement, conditioning, continuous risk management work. 3.3.1 Inventory management Inventory management is a common strategy for bolstering supply chain resilience. The measurement and placement of inventory throughout the supply chain must be considered (Sengupta, 2022). Peleg-Gillai et al. (2006) and Hopp (2008) state that in 20 order to achieve flexibility, features such as enhanced safety stock and time buffers can be implemented in order to be able to respond more effectively to large variations in demand or sudden disruptions. Utilizing inventories to achieve resilience can be a costly undertaking; large inventories should be reserved for particularly strategic components or for limiting bottlenecks (Khojasteh, 2018). Inventories can be very effective, but they have a short-term nature, as no matter how large the inventory is, it will not last forever. As the cost of capital that is tied up increases over time, inventories are most effective as a resilience strategy for imminent and predictable disruptions. Sengupta's (2022) proposal of a strategic reserve stock program, which can be initiated if signs of disruption are detected, is an illustration of such reasoning. Under this program, the company, with the approval of the CEO, purchases a large quantity of reserve stock for relevant components that, under normal circumstances, would be well above inventory guidelines. This concept can be further developed by collaborating with actors within the same supply chain or even outside of it. For instance, Sears and Toyota, which operate in separate industries, were able to share an inventory for a substantial number of items (Tang, 2006). By implementing this methodology with a suitable partner, it is possible to hold a larger stock at a lower holding cost. A vendor- managed inventory methodology could also be used to improve the efficacy and resilience of the supply chain (Khojasteh, 2018). Multiple suppliers are provided with inventory data and a collaborative platform by Walmart in order to prevent stock depletion during disruptive periods. Walmart has had tremendous success with this concept. Although few sources covering the relationship between vendor-managed inventory and resilience have been identified, it is important to note that some sources cannot establish a correlation between methods such as vendor-managed inventories and enhanced supply chain resilience (Brusset & Teller, 2017). In addition, Herold et al. (2021) recommend collaborating with logistics service providers that develop and oversee inventory management for critical supplies in the supply chain to enhance resilience. 3.3.2 Sourcing Localized supply chains tends to be more resilient and sustainable than globalization, which was the primary focus of the past. Rahman et al. (2022) emphasize the significance of selecting suppliers located close to production sites in order to be more resistant to transport delays. Locally established supply chain networks are advantageous for flexibility in the event of global or local disruptions, according to Sarkar et al. (2022), due to reduced lead times and the possibility of having buffers close to manufacturing. However, even if the manufacturing is located in close proximity to the supplier base, the supplier may be sourcing from a distant region, which would merely shift the bottleneck (Pickett, 2003). In their article, Spieske et al. (2022) state that it is promising to consider near-shoring and localization in preparation for pandemic challenges. However, "glocalization" as the new buzzword is also mentioned, which is a combination of localization and globalization, indicating that organizations are not prepared to go completely localized in the future and will instead use a combination of these strategies (Spieske et al., 2022). Longer lead times increase the supply chain's susceptibility to disruptions and fluctuations, highlighting the significance of reducing lead times to enhance resilience (Tang, 2006). This is possible by reorganizing supply chain networks. The article by Tang (2006) describes a case in which all phases of a textile supply chain were relocated to a single geographic region, resulting in a reduction of the lead time from concept to sale from ten to fifty weeks to less than sixty days. 21 Utilizing a flexible supplier base is an effective method for mitigating unforeseen disruptions (Tang, 2006). The 1997 devaluation of the Indonesian Rupiah was mitigated by the contribution of the supply chain management corporation Li and Fung. Due to their inability to afford the increased cost of imported components, it was difficult for Indonesian suppliers to complete their productions during this period. At this time, The Limited and Warner Bros outsourced their sourcing to Li and Fung. They in turn had a vast supplier contact network, which allowed them to transfer suppliers and utilize some that were operating in other Asian nations. At the same time, Li and Fung could assist their Indonesian vendors with, for instance, loans so that they could eventually resume delivery as planned (Tang, 2006). In many instances, the number of suppliers on the market is limited, and it is not possible to have a flexible supplier base (Tang, 2006). In order to increase flexibility in these situations, economic incentives can be used to encourage the entry of new suppliers into the market. Intercon Japan responded to a key supplier's "monopoly attitude" by assisting a new supplier, Nagoya Steel, to enter the market through the use of economic incentives. The objective was for Nagoya Steel to develop a process technology that differed from that of the previous key supplier in order to generate competition and maintain affordable prices for both suppliers. Dual or multiple sourcing are frequently employed methods for constructing resilient supply chains. Multiple sourcing, according to Namdar et al. (2018), can help an organization manage both macro and micro risks, such as natural disasters, component shortages, strikes, and technological uncertainty. The production volume can then be increased at a different supplier and shifted back when feasible, resulting in an improved service level. Sengupta (2022) asserts that single sourcing is a thing of the past, and that it should only be used when a second source is either unaffordable or unavailable. If single sourcing is chosen, which sometimes makes economic sense, Picket (2003) suggests that it must be monitored, with supplier data and relationships evaluated frequently and contingency plans based on the critical suppliers. There are numerous examples of businesses choosing single-sourcing despite being aware of the hazards (Sheffi, 2007). For instance, Unilever ran out of Q-tips because a hurricane destroyed the only facility that produced them. Despite this, Unilever decided to restore the plant and continue using a single supplier following the hurricane. Instead of transitioning to a strategy of multiple sourcing, they decided to increase their inventory levels by 10% and establish barge-based backup transportation routes. Multiple sourcing can also reduce the possibility of price hikes (Zillner, 2022). It is recommended to pursue a multiple procurement strategy in conjunction with price comparison and cherry-picking the lowest price as opposed to pursuing volume discounts through fewer commodity supplier relationships. In transactions with commodity suppliers, supply contracts can be made more robust by establishing the price for a predetermined period of time in the future. Similarly, it can be fixed to a certain range based on an agreement between the parties or the current open market price. Zillner (2022) refers to these contract configurations as "forward contracts," "escalator clauses," and "window clauses." Partnering with and collaborating with backup suppliers are additional methods to create flexibility (Rahman et al., 2022). According to Hosseini and Barker (2016), it is advantageous for a supplier and manufacturer to contract with backup suppliers prior to disruptions in order to be able to fulfill consumer orders in the event of a strike. Namdar et al. (2018) note in their study that it is common practice for the consumer to reserve a predetermined quantity of capacity from the backup supplier in exchange for a reservation fee. If the reserved capacity is not utilized, the purchaser 22 will incur a penalty fee. This strategy is effective when combined with other strategies, such as procurement from the spot market and a long-term supplier, where the trade-offs between increased resilience and higher cost can be mitigated (Namdar et al., 2018). A comparable alternative to backup supply is to construct recovery sites that can be utilized in the event that the primary site is interrupted (Sengupta, 2022). This could be accomplished through a joint investment by the company and its supplier. Coordination and planning of backup capacity at the supplier's manufacturing facilities is another approach (Rahman et al., 2022). Firms should routinely assess their capacity levels to identify potential constraints and excess capacity in the supply chain (Hoppe & Podkowiak, 2021). According to Earring (2010), supplier diversification and ensuring that a business has suppliers from multiple geographical regions is one strategy for enhancing resilience. Consequently, risks associated with disruptions that strike particular regions, such as natural disasters and geopolitical tension, can be mitigated. (Hong & Betti, 2023; Sengupta, 2022; Earing, 2010). This is supported by Kazemian et al. (2022), who note that diversification strategies may be applied to supplier bases, distribution sites, and manufacturing facilities. There are also suggestions to select suppliers based on their performance rather than their cost-effectiveness to reduce supply-side risk (Rahman et al., 2021). Regarding selecting suppliers based on performance, "suppliers' risk awareness" is an important factor to consider when selecting suppliers. If a key supplier fails, the entire production can be jeopardized, making this a crucial aspect of the supply chain (Kazemian et al., 2022). In terms of supplier criticality, it is common practice to concentrate risk management efforts on suppliers whose financial impact or component supply is particularly crucial. However, it is crucial to keep in mind that suppliers of low-cost commodities, for example, can cause significant disruptions if their supply is interrupted (Simchi-Levi et al., 2014). After a comprehensive investigation of Ford Motor's supplier risk, it was discovered that some suppliers of low-cost commodities with lower volumes were overlooked due to standard practice, despite the fact that these suppliers posed the greatest risk in the event of a supply disruption. 3.3.3 Supply chain design Ivanov (2022) discusses the prospect of having multiple structural supply chain designs to deal with various situations. The idea is to have a single structure for periods of economic expansion and low disruptions. The supply chain should then be designed to attain a high level of product variation in order to accommodate customization and satisfy the needs of customers. In addition, a second supply chain design should be available for use in scenarios such as natural disasters. This design is intended to be adaptable so as to be able to respond to such local events; it includes the storage of excess inventory, plans for fallback suppliers, and the possibility of adjusting production capacity. In the event of larger disruptions, such as the COVID-19 pandemic, a third form of structure is suggested as a design option. Then, the supply chain should have the ability to adapt production to a new demand type. During the COVID-19 pandemic, for instance, logistic providers altered their operations to transport medical supplies rather than passengers. It could also refer to reducing the variety of products to ensure customer delivery. Malik et al. (2011) discuss the fragmentation of vast supply chains into more manageable chunks. The article uses a case study in the US as an illustration. The 23 company decided to divide their supply chain into four sections because they had reached a point where forecasting and customer service were difficult to get right due to the increased variation in customer demand. Each component was uniquely structured based on the degree of demand volatility relative to weekly sales volume. High-volume products with stable demand continued to be manufactured in China, whereas high-volume and low-volume products with volatile demand were designated to be manufactured in North American facilities. The argument for increasing production in a high-cost nation such as the United States was that inventory and delayed sales could be reduced and the products could reach the market more quickly, which would be economically beneficial. Strategic priorities should be considered when designing a product's supply chain (Sáenz & Revilla, 2014). Two Cisco routers had significantly different supply chains. For one router, the client prioritized service levels; consequently, a flexible and resilient supply chain was developed. For a more fundamental router, the consumer placed a premium on price, so the supply chain had fewer flexible options. This method of thinking is comparable to Fisher's (1997) supply chain framework, which suggests that stable-demand commodity products should have efficient supply chains with a focus on cost. Conversely, more innovative products necessitate a flexible, agile, and resilient supply chain, which Fisher (1997) refers to as "responsive supply chains." Cohen et al. (2022) introduce the "Triple-P" framework, which extends Fisher's (1997) framework. It suggests that not only the product but also the firm's product portfolio as a whole should be considered; if a company has a portfolio with thousands of products, it is difficult to have the requisite power, visibility, and collaboration to implement resilience strategies. Suppliers should also be considered; the number of available suppliers and the number of suppliers a company works with can limit the scope of potential supply chain resilience strategies. Having identical designs, processes, and facilities for multiple plants is another method to increase the flexibility of supply chain components (Kazemian et al., 2022). It indicates that, in the event of a disruption, partners in the supply chain are able to work together and transfer products between each other to accommodate disruptions and fluctuating demand. Intel ensures that the layout, required machinery, and process for enabling flexible capacity switches are identical (Khojasteh, 2018). Smith & Wesson utilizes excess factory space and capacity for injection molding, forging, and heat treatment, which they sell as a service to other companies (Smith & Wesson, 2022). A strategy can be derived from the Smith & Wesson case: for supply chains that are designed with excess capacity in the form of additional or larger factories for reasons of resilience and flexibility, the excess capacity can be used to offer manufacturing services to reduce the trade-off between cost and flexibility. Furthermore, flexibility and adaptability must be considered during the design phase of warehouses (Schuhmayer, 2022). This could take the form of a potential expansion area that can be utilized if another facility is disrupted, or simply contemplating the possibility of natural disasters and adding warehouses to the network accordingly. The robustness of the warehouses can be greatly impacted by exercising due diligence when selecting locations. The selection of distribution centers should also be made with reliability in mind (Rahman et al., 2022). Fattahi et al. (2017) emphasize the significance of locating them near to customers to reduce the likelihood of significant transport disruptions upstream in the supply chain. In designing warehouse structures, there is a trade-off between scale economies and resilience (Schuhmayer, 2022). Ericsson has decided to operate three warehouses despite the fact that a single warehouse would suffice in the current situation. In addition, contractual employees can provide additional flexibility to respond to 24 downturns and upturns. As it is simpler to terminate a warehouse contract than to sell a fully owned warehouse, outsourcing warehouse operations can also increase flexibility. Rahman et al. (2022) propose having alternative routes to protect against transportation disruptions. According to Kumar et al. (2014), the choice of transport mode is significant, and the article argues that multicarrier and multimodal transportation are preferable, as well as the use of multiple routes to prevent transport delays. One company had prepared an ocean transport route in the event of road transport disruptions; when they did occur, the ocean transport route was faster (Azevedo et al., 2013). Establishing close relationships with airlines and airline brokers in advance, despite the fact that air travel is not the primary mode of conveyance, is an additional method for enhancing the resilience of logistics (Hoppe & Podkowiak, 2022). According to Zhen et al. (2016), secondary transportation is a resiliency-enhancing strategy. When a distribution center has backup transportation, it can allow other distribution centers to transport its products or components within the company or to its consumers in the event of a disruption. However, because these parties are frequently subsidiaries or competitors, enabling these transports incurs a higher cost due to charges for overtime, alterations in delivery schedules, and overall additional fees. Other authors, such as Liu and Lee (2018), discuss the benefits of utilizing a well- established third-party logistics provider. According to the third-party logistics industry, internal integration is more essential than external integration when it comes to enhancing the resilience of supply chains. Internal integration could be accomplished through the use of "integrated logistics operation systems", which would enable the third-party logistics provider to be more agile in their processes and better able to react to disruptions. To accomplish supply chain resilience, organizations must improve not only their internal integration, but also their collaboration with other logistic actors and their customer integration. 3.3.4 Product design A large body of research demonstrates that communication between supply chain operations and research and development departments can yield a plethora of robust strategies (Simchi-Levi et al., 2015; Hoppe & Podkowy, 2022; Lee, 2004). Changing the design of a product is sometimes preferable to investing in inventory redundancy (Simchi-Levi et al., 2015). The more customized a product is, the more difficult it is to reconfigure it for other sources of supply. If components, particularly critical components, can be standardized through design changes, it is easier to locate multiple sources of supply, thereby reducing the likelihood of component shortages (Hoppe & Podkowiak, 2022). A factory that supplied Nokia and Ericsson was destroyed by fire in March of 2000. In five days, Nokia received supplies from Japan and the United States after standardizing the design of the chips (Lee, 2004). Ericsson, on the other hand, had eliminated all of their backup suppliers in an effort to reduce costs, and they were unable to modify the design, resulting in months of factory downtime and delays in the release of a new product. In the food industry, it is common for there to be multiple listed recipes that satisfy the same product specifications and yield extremely similar products (Sengupta, 2022). If a manufacturing company could apply a similar concept to their Bill of 25 Materials, components, or raw materials, it would be extremely advantageous during shortages. Sengupta (2022) provides examples of heavy plastics replacing light metals and piatex replacing leather. The majority of the time, it is crucial that a change in the product's material does not result in any visual differences. Similarly, design can be used to reduce price risk; if a product can be designed so that the base material can be switched, for example, from aluminum to steel, it can add flexibility to the supply chain and drastically reduce the risk of commodity price increases because the cheapest of the two can be chosen (Pellegrino et al., 2019). A diversified assortment of articles that consist of different raw materials can also create a hedge against commodity price fluctuations (Zillner, 2022). Another method to hedge against commodity prices is to use options or futures contracts. For example, if a manufacturer is highly dependent on steel prices, it might purchase options or future contracts that benefit from increases in steel prices. Even though commodities are in fact commodities that tend to be easy to get hold of, some manufacturers whose profitability depends on commodity prices hold strategic stocks of commodity products that they purchase when prices are good enough (Zillner, 2022). 3.3.5 Enhance supply chain collaboration In their work, Kazemian et al. (2022) emphasize the significance of power distribution among supply chain partners. Due to the fact that each party can make their own decisions and does not need to wait for other key partners to give instructions, this can result in much faster reaction times. Consequently, the effect of disruptions can be mitigated. Liu et al. (2021) examine empowerment through the lens of Chinese logistical platforms like JD Logistics and Cainiao. Through technology and the vast amounts of data at their disposal, these participants can empower supply chain partners to make independent decisions. Empowerment is a highly effective tool for achieving a high degree of interorganizational collaboration in a supply chain (Liu et al., 2021). In order to improve the resilience of the supply chain, there are also strong recommendations for enhancing supplier relationships and expanding collaborations with suppliers (Rahman et al., 2022). According to Christopher and Peck (2004), supply chain collaboration and investment in stronger partnerships are very advantageous for mitigating risks and minimizing the impact of disruptions. The authors (Christopher and Peck, 2004) use the term "supply chain intelligence" to describe the objective of fostering a higher level of collaboration, greater transparency, and information sharing among supply chain partners. Kazemian et al. (2022) argue that collaborative relationships across supply chains are one of the most influential factors that can increase the resilience of an entire supply chain. Schumayer (2022) identifies horizontal and vertical cooperation as the two types of collaboration. Although it requires a great deal of trust, some businesses engage in horizontal collaboration, in which two firms that are normally considered competitors assist each other when stock runs out at one business. The actors in the supply chain engage in vertical cooperation; discussing capacities and inventories along the supply chain can make it significantly more resilient. In addition to production processes, the concept of bottlenecks also exists in supply chains. If bottlenecks can be identified, the supply chain can collaborate by, for instance, sharing investment costs for additional capacity or inventory. Kazemian et al. (2022) note that a close relationship with key suppliers in the supply chain can be advantageous because business continuity is frequently reliant on these suppliers. By establishing unbreakable relationships, the entire supply chain can be made more resilient, and disruptions can be dealt with more effectively. The 26 primary activities and factors that foster collaboration and strong relationships are incentive and goal alignment, mutual dependence, resource and information sharing, communication, collaborative learning, and finally collaborative decision-making (Scholten & Schilder, 2015). 3.3.6 Increasing supply chain visibility Integrating systems to gain visibility into transactions throughout the supply chain was one of the top initiatives to improve supply chain visibility (Heaney, 2013). Sengupta (2022) suggests that software that displays a map of the company's supply chain as well as ongoing geopolitical risks is an additional means of enhancing visibility. Mapping transportation networks can increase resilience in the same way that mapping supplier networks can increase the visibility of their networks. Hoppe & Podkowik (2022) recommend identifying nearby airports, road and rail transport carriers that operate in the local region, analyzing customs' capabilities, etc. According to Chopra (2013), effective information sharing can improve the utilization of supply chain assets and make this process significantly more efficient. In addition, it can improve the supply chain's coordination of flows, resulting in lower costs and greater flexibility. Sharing information throughout the supply chain can also help identify weak links, prevent overreactions, and provide information about component shortages, thereby reducing unproductive decision making in a high-risk environment (Namdar et al., 2021). In addition, the supply chain benefits from reduced uncertainty and whiplash effects (Christopher and Peck, 2004; Namdar et al., 2021). The Internet of Things (IoT), blockchains, and big data can help make the supply chain more transparent and facilitate the sharing of high-quality information both upstream and downstream. Consequently, concerned actors can obtain more accurate and up-to-date information, which will assist them in making the right decisions and acting more proactively, allowing them to recover from disruptions more quickly (Rahman et al., 2022). 3.3.7 Risk management & Corporate culture Important to supply chain resilience is a strategy that includes assessing and managing risks in a company's supply chain to mitigate the effects of disruptions (Kumar et al., 2014). Depending on the type of product, whether the probability of disruption is high or low, and whether the consequences of a disruption would be mild or severe, different strategies that strike a balance between these parameters are suitable. Another approach is to examine and improve the adaptability of organizational change management systems (Kumar et al., 2014). One way to improve the processes is to conduct disruption simulations as a form of scenario analysis to determine whether the organization can effectively implement its crisis management plans. In this way, many new lessons can be learned without actually experiencing a crisis, and they can contribute to the improvement of the infrastructure associated with supply chain flexibility. Supporting this notion, there appears to be a clear relationship between resilient companies that handle high-impact events well and companies that deal with almost daily small disruptions (Sheffi, 2007). Kazemian et al. (2022) emphasize that the entire supply chain should have a business continuity management system as a safeguard against disruptions. Christopher and Peck (2004) argue that, when addressing business continuity management, risk mitigation should go beyond the organizational level and encompass the entire supply chain. After recovering from a disruption, a company and its supply chain should review and 27 update their contingency plans in order to handle future disruptions effectively (Hoppe & Podkowiak, 2022). The estimation of probabilities and the economic impact of disruptive events present a challenge for risk management, making it difficult to calculate the expected return on investment (Tang, 2006). To simplify the issue, Simchi-Levi et al. (2014) created a model that did not take probabilities into account but instead focused on answering the question of what the impact would be and how long it would take to recover if the supply of a particular component or material ceased. Literature acknowledges that culture plays a significant role in the efficacy of risk management and the majority of resilience dimensions (Christopher & Peck, 2004; Kumar & Anbanandam, 2020; Pickett, 2003; Sheffi, 2007). Even Pickett (2003) acknowledges that culture is the most effective resilience strategy. Sheffi (2007) identifies four characteristics that comprise the organizational culture of resilient organizations: 1. Frequent internal communication and information sharing - Information about the state of the company in form of KPIs and reports of the current situation. A culture where information sharing is emphasized and employees feel safe to share signs of risk and bad news increases supply chain resilience as it enhances the dimensions of supply chain resilience (Kumar & Anbanandam, 2020). 2. Empowerment by distributing power - It is probably not management who encounters a disruption first and therefore it is important that the employees who do can act on it (Sheffi, 2007). It is important to connect rewards and align employees with the strategy. 3. Care for the success of the organization 4. Experience and conditioning from previous disruptive events: industries whose daily operations are frequently disrupted are typically better equipped to handle low-probability, high-impact events. Christopher & Peck (2004) suggest two measures for enhancing the culture of risk management: involving supply chain management in crucial cross-functional decisions and establishing a team with a focus on supply chain risk that reports to the board. Pickett (2003) adds that, over time, a resilient mindset and culture can be cultivated by remaining vigilant for potential disruptions. 3.4 Measuring supply chain resilience Measuring supply chain resilience should also be regarded as part of a strategy towards resilience. Cisco monitored its resiliency by compiling an index that evaluated its capabilities in four dimensions: product design, supply chain design, manufacturing, and testing (Sáenz & Revilla, 2014). To fully comprehend if a supply chain is improved, performance metrics must improve; most organizations fail to consider resilience because, due to its dynamic nature, they fail to develop performance metrics for it (Singh et al., 2019). Resilience key performance indicators should support a chosen strategy and assist with its implementation (Han et al., 2020). Thus, one KPI may be appropriate for measuring one strategy but not another. 28 Few studies have been conducted on resilience metrics (Han et al., 2020). This is likely due to the difficulty of measuring supply chain resilience, and the fact that an organization's true supply chain resilience is only revealed after a disruption amplifies the difficulty of measuring it (Guoping & Xinqui, 2010). Second, Hosseini et al. (2020) note that ripple effects make it more difficult to predict how a disruption may impact the supply chain. This section introduces and summarizes a variety of performance metrics that could be used to measure supply chain resilience. The performance metrics are related to the supply chain resilience determinants presented in Table 5 of Section 3.1.1. Although there are other methods to structure the evaluation of supply chain resilience, such as evaluating on a system level such as logistics, procurement, and production (Guoping & Xinqui, 2010), these are the most common. In addition, there is a plethora of literature on simulations and quantitative modeling that aims to quantify the supply chain resilience of firms (Agarwal et al., 2022; Ribeiro & Barbosa- Povoa, 2018). Nonetheless, it is essential that measurements be both easy to understand and resistant to manipulation (Singh et al., 2019). 3.4.1 Robustness From a preparedness perspective, robustness can be measured as inventory levels throughout the supply chain or as excess capacity available, which can also be expressed as a utilization rate (Werner et al., 2021). Ivanov (2019) suggests order fill rate for measuring inventory levels, while Rajesh (2016) adds inventory accuracy rate to prevent being misled by inventory data in the system. Werner et al. (2021) add that the inventory could be advantageously divided into critical and low-risk component inventories. Simchi-Levi et al. (2015) introduce two resilience-related concepts: time to sustain (TTS) and time to recover (TTR). The time to endure is defined as the amount of time a node, such as a supplier, can meet demand during a disruption, whereas the time to recover is the amount of time it would take to resume normal operations following the disruption. Therefore, if the TTS is longer than the TTR, the node is robust and disruption would have no effect on performance if it is longer than the TTR. Using a combination of these metrics and the cost of disruption during a specific time period, the most vital suppliers in the supply chain were subsequently identified. Suppliers need a budget to be able to recover, so the financial health of a supplier can be seen as a metric of robustness (Hosseini & Barker, 2016). Supplier reliability (Ivanov et al., 2019) and supplier rejection rate (Karl et al., 2018) can be used to evaluate robustness at supply sites and the focal factory. By continuously measuring suppliers' dependability and other performance metrics, it is possible for a business to determine which suppliers to continue working with and which to end relations with (Huang & Keskar, 2007). By collaborating with higher- performing suppliers, it is likely that the supply chain will also perform better during disruptions. Simatupang and Sridharan (2005) suggest using a supplier scorecard approach for this benchmarking procedure. 3.4.2 Flexibility To measure flexibility, the number of incidents handled through flexible actions in the process or product is suggested by Rajesh (2016), although it is not explained how such a metric would be constructed in practice or how the data would be collected. Hosseini & Barker (2016) introduce rerouting options for transportation and resilience metrics when selecting suppliers. Having the ability to alter delivery dates can also 29 indicate flexibility that can be measured (Vargas & González, 2016). There is also an opportunity to be creative and adapt company-specific metrics not only for flexibility but for supply chain resilience in general. As an illustration, Hosseini et al. (2020) emphasize a variety of resilience metrics for an inland port, such as space utilization and additional handling equipment, that would be irrelevant at other companies. 3.4.3 Adaptability A measurement of adaptability found in literature is planning cycle time, which is derived from the frequency of S&OP meetings in the organization (Chae, 2009). Adaptable supply chains have the option of reconfiguring, so measuring available alternatives per supply category is relevant (Carvalho et al., 2012). 3.4.4 Agility To evaluate agility, Lin et al. (2006) create an agility index based on a multitude of attributes, such as the time of decision-making and the rate at which information about demand and supply is captured. Supply chain agility is abstract in nature and highly uncertain to measure, and the authors highlight this using terminology like "fuzzy". Other agility metrics found in the literature are upside and downside flexibility, which aim to answer the question of how much of a demand increase or decrease the supply chain can sustain in 30 days (Bauer & Göbl, 2017). As an illustration, a supply chain that currently meets a monthly demand of 1,000 units but could produce 1,500 units if the demand increased has 50% upside flexibility. This measurement could also be inv