Driving Operational Resilience: Perspectives from Emerging and Developing Economies

Abstract

Some organisations have supply chain ecosystems domiciled in Africa and have yet to fully recover from current global disruptions’ impacts. A critical aspect of any supply value stream is the ability to recover from internal and external shocks or vagaries that may affect its ability to provide value incrementally to its customers. Another term for this attribute is operational resilience or supply chain resilience. The chapter discourse will include the concept of supply chain resilience, incidents of supply chain disruptions, global best practices for eliciting operational resilience, and key recommendations for key stakeholders.

1. Introduction

Globally, most organisations have had to contend with myriad of issues bothering on the sustenance of their operations after recent or immediate disruptions. Some organisations have been able to recover from this level of disruption, some are yet to do, and some have had difficulty in attaining this feat, as it were. Resilience, from the perspective of operations or supply chain, refers to the ability or propensity of an organisation’s supply chain or operation’s architecture to proactively elicit value-add in alignment with customer requirements due to the vagaries of dynamic environment. Thus, organisations harness the capability to continuously innovate and retool their preparedness and response towards an unstable and changing business world [1, 2]. This situation requires a continuous re-jigging and re-tooling of business processes and supply flows geared towards the need to suit and engage the disruptive and unstable external forces in tandem with the capability to rebound to normalcy.

2. Concept of resilience

Concept of resilience is somewhat amorphous and ambiguous because it draws its meaning from diverse backgrounds such as ecology, engineering, psychology, operations, and supply chain management. However, the concept of resilience could be captured within the domain of supply chain in tandem with its original definition. Thus, according to Rodin [3], resilience could be defined as the capacity of an entity—an individual, a community, an organisation, or a natural system to prepare for disruptions, to recover from shocks and stresses, and to adapt and grow from a disruptive experience. The definition of resilience as a concept can be adapted from the dimensions of physical, psychological, economic, engineering, disaster management, organisational, ecological, and socio-ecological [4, 5, 6, 7, 8]. This school of thought defines resilience as the ability of a system to return to its original state or move to a desirable state after an incident of disturbance and affected by an external event or action. In other words, it is the capacity of an entity or enterprise to survive, adapt, and grow amidst turbulence; it also, the inherent and latent ability of a system to endure despite exposure to some measure of adversity, recover, and maintain its existing structure after a shoch as a function of its flexibility, and stability. This perspective embodies the notion that organisations seek stability and equilibrium towards attaining efficiency amidst disruption; this perspective takes cognisance of eliciting responsive measures, risk mitigants, and eliciting capability as way of overcoming vulnerabilities. These definitive perspectives of resilience have subsisted over the years across extant literature and practice; however, there exist some contradictory stance from some schools of thoughts regarding how organisations can leverage their supply chain architecture to build or enhance resilience capability quotient [6, 8, 9]. Thus, a school of thought thinks that resilience capabilities encompass flexibility, redundancy, collaboration, visibility, agility, and multiple sourcing, while another of school of thought thinks that resilience entails capacity, culture, inventory, information sharing, flexibility, and responsiveness. With recent upheavals from the incidents of global disruption, this aspect of resilience has dovetailed to considering supply chain network design through configuration as a critical dimension of resilience capability. Aside these definitions and nomenclatures of resilience, due to inconsistency and incoherence amongst scholars and practitioners alike regarding the capability dimensioning of resilience with reference to operations and supply chain, within the context of developing economies, there is an exigent need, as it were, to explore the factors that are crucial and essential for current risk response measures and future risk mitigants in developing economies. In an alignment with this premise, there is an operational need to redesign the supply chain infrastructure in developing countries towards forming strong networks; this is necessary because it would stimulate normative and coercive pressures especially for intra and inter-organisational network with a view to overcoming existing gridlocks in organisations that are contending with operational and supply resilience issues [10, 11, 12, 13]. Every supply chain architecture provides a relational link between a buyer and supplier network, hitherto this link has been buffeted by recurring incidents of disruption as occasioned by global geo-politics and similar occurrences, and thus, there is a need to factor in the resilience equation, the social capital perspective of resilience vis-a-vis the implication for developing countries [14, 15].

Accordingly, leveraging these perspectives, the concept of resilience has enlarged its connotation because the need to build resilience has taken an urgent social and economic dimension as function of global disruption as occasioned by urbanisation, climate change, and globalisation ([3], p. 4). These three facets are largely connected and flow into an ecological cum economic nexus. Inter alia, resilience has five characteristics [3], viz.: aware, diverse, integrated, self-regulating, and adaptive; these characteristics are subsumed within three phases of readiness, responsiveness, and revitalisation. Today’s business milieu has been affected by incidents of turbulence and volatility, and these have also created unexpected shocks and discontinuities that have impacted operations and supply chain ecosystems to an unmeasurable level of disruptions. These aspects have led to considering resilience largely from the angle of supply chain.

3. Supply chain resilience

A phenomenon whereby the link between a buyer and supply is disrupted by external or internal occurrences may warrant a level of resilience otherwise known as supply chain resilience. Various definitions or conceptualisation of supply chain resilience abound. However, amongst the myriad of these definitions, supply chain resilience is the capability of a supply chain ecosystem to proactively design and plan its supply chain network with a view to anticipating unexpected disruptive occurrence geared towards responding adaptively to occasions of disruptions [16, 17]. Thus, supply chain resilience entails the ability of a supply chain flow to ramp up its anticipation capability with a bid to prepare, respond, and recoup from incidents of disruptions while maintaining service continuity at acceptable predefined levels. Globally, supply chain networks are becoming complex, interconnected, and vulnerable to a myriad of risks ranging from natural disasters to cyberattacks and global pandemics. These emerging aspects have necessitated the need for supply chain ecosystem to dovetail into having supply chains that have several strategies for managing and eliciting recovery from incidents of disruptions. Since, resilience is an embodiment of a complex, collective, and adaptive capability of organisations in the supply network positioned to maintain a dynamic equilibrium, geared towards recovery from disruptions, and regain functionality by overcoming negative impacts, responding to unexpected changes, and leveraging accumulated knowledge base to drive incremental improvement [18]. Albeit interaction and co-evolution between different organisations on one hand and between organisations and environment, on the other hand, determine and influence the robustness of the resilience hygiene to an extent as required by the business milieu. Resilience transpires with the supply value chain at three levels: firm, supply chain architecture, and supply network; these levels are fraught with some measures of uncertainty, and there is always a strategic need to drive efficiency and productivity from these dimensions [19]. These levels of uncertainty are occasioned by incidents of international terrorism, earthquakes, fires, accidents, tsunamis, and hurricanes; thus, there is an evolving emergent need to build the resilience quotient into the various strata of supply chain networks of concerned organisations. For some organisations in this category, it might be necessary for them to have control of its entire logistics flow as an important subset of its supply chain ecosystem because it can leverage on it as competitive advantage, both in the medium-, and long-term basis. For these organisations to orchestrate these as a competitive advantage in their resilience quotient, there is a need to aggregate and recalibrate some key elements of supply chain resilience into their organisational operational excellence quotient. These would be discussed as follows:

3.1 Risk identification and management

A crucial aspect of supply chain resilience bothers on the identification and management of risk and its mitigation. Modern global supply chain ecosystems are vulnerable to a gamut of risks encompassing natural disasters, political instability to pandemics, and inclusive of labour crises. Thus, organisations need to do a reconnoitre regarding how to develop risk mitigation plans towards preparing, responding, and recovering from disruptions by examining the interplay between different capability facets of its supply chain networks. In so doing these organisations would be able to build resilience capability by strengthening individual capabilities and orchestrating them effectively. The first step for organisations to achieve this concretely resides in their abilities to identify potential risks and vulnerabilities within and along the supply chain flow. This step would entail a thorough assessment of all elements of the supply chain, as a function of suppliers, logistics, information systems, and dependencies.

3.2 Visibility and transparency

Visibility and transparency are vital aspects of any supply chain ecosystem. An aspect of any supply value chain that easily indicates symptoms of break-down vis-a-vis its resilience is an a lack or convoluted visibility coupled with a tandem lack of transparency. Thus, the need to have optimal visibility across all tiers of any supply chain flow is of vital importance. Visibility entails knowledge about the sources of components, flow, conversion process, and interaction of the components within the supply chain network. On the other hand, transparency involves the identification of bottlenecks and areas of weakness that are susceptible to disruption along the supply chain flow.

3.3 Flexibility and adaptability

The sourcing and channelling of inputs into the supply value chain is susceptible to a vagary of conditions that are both external and internal. Thus, there is an emergent need subsumed from the aspect of operational excellence that resilient supply chains are flexible, agile, and nimble as a subset of any supply chain architecture to withstand or combat any incident of resilience. These intricacies would then involve the need for organisations to have alternative sources of supply, flexible logistics, and flexible production and capacity capabilities.

3.4 Collaboration and communication

Collaboration, from an immersive perspective, is the new order in the current global economy, and supply chain being an important part of this global narrative, cannot be excluded. Thus, there is a need to build and forge strong relationships amongst suppliers, partners, and organisations as part of the supply chain network to improve information flow and trust as enablers for agile responses to disruptions. A critical attribute of this dimensions is leveraging effective communication towards curtailing crisis situations, as the needs arise.

3.5 Redundancy

Building buffers, lags, and redundant subunits within any supply chain flow provide enablers for mitigation tactics. These measures would entail building inventory and backup logistics quotients in the supply chain ecosystem; these might be costly in the short-term but would provide a bucket for an insurance policy against incidents of disruptions. However, the decision to locate where to position such redundancy may involve some strategic planning and cost–benefit analysis.

3.6 Recovery planning

The stimulation of stress test and scenario planning are important aspects of recovery planning. These dimensions would elicit agile strategies for an efficient supply chain recovery after an incident of disruption. Recovery planning would also entail re-calibrating the operational assumptions that undergird the resilience quotient within the supply chain ecosystem.

3.7 Continuous improvement

The incidents of disruptions that may warrant need to build resilience into any supply chain ecosystem are pervasive. To this end, organisations operating globally, with reference to both developing and developed economies, should be in a state of readiness, as default, to mitigate disruption, because building supply chain resilience is not a one-off achievement, but it should be heralded on a continuous basis. Thus, this would entail regular reviews and updates to strategic intents geared towards mitigating the incidents of disruption via the resilience mandate; these measures would then involve incorporating lessons learnt from previous incidents of disruptions and keeping abreast of emerging technologies and methodologies towards maintaining resilience.

4. Incidents of supply chain disruptions in developing economies

Incidents of supply chain disruptions abound in developing economies coupled with dire consequences being exacerbated by week infrastructural architectures and unstable economic policies. However, navigating the resilience quotient is fraught with some dimensions that pose long-lasting challenges of social sustainability and novelty with the need for global restoration vis-a-vis operational stability [20, 21]. These dimensions have unique operational implications for governments and stakeholders in these developing countries. For developing countries in sub-Saharan African, there exists frequent challenges of disruption in their supply chain networks affecting both local economies and global markets. These challenges have occasioned significant supply chain disruptions in these regions:

4.1 Infrastructural deficiencies and deficits

Most developing countries in sub-Saharan African have contended with issues of infrastructural deficiencies in some cases, and other case, outright deficits. For instance, most rural areas of developing countries are inaccessible by reliable roads, which have become a burden to the supply chain network, and these situations complicate transportation of goods and drive incremental costs. Also, these roads become impassable during rainy seasons, leading to significant delays. Another aspect of this challenge is the sporadic and instability in energy supply as occasioned by frequent power outages, which negatively impacted manufacturing and other industrial operations, leading to operational inefficiency cum delays, and increased operational costs. These infrastructural deficiencies and deficits as occasioned by inadequate roads, poor rail networks, and coupled with epileptic power supply have resulted in high operational costs, affecting the efficiency and reliability of supply chains, and ultimately disrupted supply chains.

4.2 Political instability and conflict

Political instability and conflict are characteristic features of business environments in developing economies, and these portend a substantial vulnerability on the sides of most business operations in these countries. Instances of these occurrences abound in these countries. Nigeria has witnessed incessant incident of insurgency in the middle and northern parts and in the Niger Delta areas; these have impacted supply chain operations of manufacturing, service, oil production, and retail businesses in these areas. Insurgencies in the northern parts of Nigeria have also affected food supplies for human consumption and Agro in-feeds for manufacturing. These incidents require the intervention of resilience calibration because of their impact of increasing cost of foodstuff and global prices of oil in these economies. In southern Sudan, there has been a civil war which started in 2013, and it has persisted hitherto with dire consequences for humanitarian logistics and livelihood in this country. This unending conflict has impacted and disrupted food supply chains and agricultural ecosystems in this country leading to severe logistics breakdown and humanitarian crisis with a ripple effect of millions of persons displaced and in dire need of food and medication.

4.3 Economic factors

Another sphere where disruption has affected the supply chain and operations in the developing economies significantly is economy. Countries such as Nigeria, Ghana, Zimbabwe, and South Africa have witnessed significant devaluations of their currencies, which have negatively impacted the cost of livings, hike in prices of foodstuffs, consumables, and services, and leading to prices fluctuations and instabilities across local markets in these regions. This situation has constituted a bane for a significant populace and businesses in these countries. In some cases, like Nigeria, the scale of conflict and violence have resulted in perennial occurrences of kidnapping, banditry, lost of lives, injuries, communal conflicts, acts of terrorism, and ultimately resulting in a severe disruption in the food supply chain and an exacerbated food insecurity in the region. Some areas are yet to navigate their exits from the economic comatose hitherto, and it rather seems that these incidents have defied logic for leadership cadres in these countries, especially in sub-Saharan Africa. Aside from currency devaluation, existence of trade barriers in some of these countries has also warranted the need for operational resilience. Existence of high tariffs and non-tariffs has, hitherto, constituted bottlenecks impeding the free flow of good across the borders between these countries. Within the ECOWAS region, leaders and governments in these regions are hopeful that initiatives such as the African Continental Free Trade Area (AfCFTA) will have a leverage to resolve these economic bottlenecks. According to Mui and Muthuveloo [22], business environmental challenges that cause changes in business processes and practices require continuous calibration of operational flow geared towards unravelling disruptive quagmire in a bid to decouple challenges in regulatory cum economic measures that underpin operational practices of organisations. Thus, there is an evolving need to build resilience into the supply chain ecosystems of these economies as means of mitigating the impact of inflation, currency devaluation, and deficit of financial services which have disrupted the availability of goods and services in these regions.

4.4 Natural disasters and climate impacts

From 2019 to 2020 and early 2021, large swarms of locust significantly affected the agricultural value chains in Ethiopia, Kenya, and Somalia; these incidents occasioned the disruption of the food supply chains in these regions impacting severely the food security in the agriculture ecosystem. Hitherto, some of these regions, though, have deployed some level of response to these incidents, and substantial resilience architecture is yet to re-calibrated and instituted in these regions. Incidents of droughts and floods have also affected food production and supply chains in Southern and Eastern Africa.

4.5 Health and dire humanitarian crisis

The occurrence of health and humanitarian crisis in the form of epidemic has impeded the reliability and availability of labour and workforce needed to activate the supply chains, locally, and globally, in some instances. These types of incidents have affected the service-based organisations because labour-hours are essential for value delivery in these regions. Incidents of HIV / AIDS pandemic are some examples of these incidents. In countries such as Democratic Republic of Congo, populace domicile in these regions has experienced the plague of Ebola outbreaks which have affected human lives and disrupted the availability of manpower to provide important health service, the flow of quarantine measures, and outright scarcity of vaccines and medications. On a larger scale, epidemics and pandemics have severely impacted supply chain with the aftermath of workforce shortages and movement restrictions of goods and persons. For instance, in West Africa, from 2014 to 2016, there was an outbreak of Ebola which impacted supply chain flows, movement of goods and people, with a tandem effect on availability of health services and vaccines.

4.6 Regulatory and bureaucratic inefficiencies

Another cankerworm that has precipitated the need for operational and supply chain resilience in the developing economies is the existence of a myriad of regulatory and bureaucratic inefficiencies. This is a major bane for most leaders, key players, and governments in this region. Ganin et al. [23] asserted that resilience is hinged on the level of resources and rapidity flow developed as a function of an aggregated response to emerging profane issues in a supply chain stream positioned to help a system recover from swerving from its course and with minimal operational failure consequences. Thus, in most ports in Nigeria, Ghana, and Kenya, inefficient customs’ procedures have constituted unending delays and bottlenecks resulting in incessant incidents of delays, and unnecessary bureaucratic constraints, where processes are usually slow and unpredictable causing prohibitive of demurrage, and operational costs.

5. Strategies to mitigate and build resilience for developing countries

Efficient and optimal supply chain networks should be in states of readiness to response substantially to business environmental changes that may impact on their operational flows of value-add [1]. To this end, it behoves organisations and governments operating the supply chain ecosystem to explore strategic options regarding how these organisations can foster and build resilience in their sub-Saharan Africa supply value chains. However, this strategic option is not only open for developing economies like Nigeria, Ghana, Zimbabwe, Cameroun, Kenya, and others, and it can be explored by countries in the global markets that use regional resources and products for their operations; this approach would not only elicit the requisite resilience from the angles of operations and supply chain, but it would also help them to enhance their regional stability and economic growth. Not withstanding, supply chain disruptions warehoused in developing economies have had tripartite impacts on businesses, economy, and society; however, characteristics of these disruptions may be influenced by socio-economic, political, and environmental factors that tailor-made for specific regions. Noteworthy, incidents of supply chain disruptions in developing countries or economies have unique features that require special solutions for mitigating the incidents and types of disruptions in this region as compared to other parts of the world. Due to the level of severity and scale of the disruptions experienced in these developing countries, practitioners, supply chain leaders, and governments can leverage some of these strategies to build or infuse resilience into their supply chain ecosystems within the sub-Saharan Africa:

5.1 Diversification of the supply chain base

The need to have to some level of diversification within supply chain networks has become a business imperative. In a rapidly evolving ecosystem, diversification as a function of agility, window for options, and responsiveness is critical for leveraging resilience. According to Rodin [3], diversification entails system redundancy; it requires a backup in a network of flows or operational architecture positioned for the avoidance of cascading system failure or dysfunctionality during crises or an incident of disruption. Sub-Saharan African countries need to have backups for their supplies via multiples sources of supplies and nearshoring their supply bases in multiples locations or collaborations amongst close neighbouring countries to mitigate the impact of unforeseen incidents of disruptions.

5.2 Leveraging technology as an enabler

A critical game changer in world that is rapidly immersed in a state of flux is having recourse to technology as an enabler for value delivery for organisations’ customers. Developing operational resilience with the aid of technology is about managing risk and resilience of extended supply chain networks with some algorithms that go beyond the traditional continuity in business and disaster recovery capability but requires a rejigging of organisational capability with the prowess of technology; this ability would provide a leeway that would enable a 360-degree awareness about pending risks and mitigation tactics for eliciting resilience. African countries can leverage technologies such as Internet of things (IoT), AI, and blockchain to enhance visibility, predictive capabilities, and data analytics to build some level of operational resilience and efficiency in their supply networks.

5.3 Optimal inventory management

Inventory in the forms of raw materials, consumables, machine parts, work-in-progress (WIP), and finished are the basic blocks of any supply value chain. From the food needs for humans, medicines, to raw material for factory operations, an emergent dimension of inventory impact is the need to move from “just-in-time” to “just-in-case” for organisations in sub-Saharan African countries to have a buffer stock of critical inventory and stock stocks mitigate the severe impact of stock-out of critical inventory items that might affect their operations. This is even more critical for those organisations that have their supply chain networks in these developing countries that are largely susceptible to global economic vagaries.

5.4 Capacity building

In recent times, several developing countries in sub-Saharan Africa have had their supply chain operations witnessed some level of disruptions due to incident of manpower losses. These losses have been occasioned by talented personnels migrating to the developed countries due to emerging job opportunities in these countries; a resultant outcome of this situation is depletion in the pool of talent or capable manpower that would be needed for the overall well-being of the supply chain ecosystem in these developing countries. Countries such as Nigeria, Ghana, Cameroun, and Kenya have had a severe hit from this aspect of talent losses, and this has caused some level of disruption in their supply chain ecosystem.

5.5 Scenario planning

A proactive approach for government, practitioners, and leaders in the supply chain ecosystems is to leverage some elements of stress test and scenario planning as strategic options for mitigating the impact of disruptions on their operations. These options would enable them to regularly instigate and orchestrate scenario and simulation operational exercise that would help to test their level of agility and responsiveness to incidents of disruption; this approach would dovetail to explore viable options from a pragmatic dimension the art of recalibrating their business assumptions towards building a robust resilient quotient in their operations.

6. Global best practice for eliciting operational resilience

Several global best practices abound for eliciting operational resilience. Some of these practices can be curated from the strategies earlier discussed in the preceding section; however, with a focus on developing countries or developing economies in sub-Saharan African as a basis for this chapter, governments and key stakeholders can have recourse to the following: substantial investment in infrastructure, regional cooperation, stabilising their local currencies via stimulating their productive capabilities as a way of using more of their local products for consumptions, enhancing their service and agricultural sectors as alternative sources of income and inputs, and stabilising their political and economic environment to foster in-flow of investments, develop local alternatives as inputs, close the gaps in their infrastructural deficits by leveraging more regional collaborations and alliances such ECOWAS and AfCFTA.

7. Key recommendations for policymakers and key stakeholders

Some recommendations for policymakers and key stakeholders about building resilience in the operational and supply chain networks would include:

1. Develop local capability from the perspectives of manpower and alternate source of inputs. A critical game changer for key stakeholders, governments, and policymakers is to explore how to develop a pipeline of sustainable talents and capability within the supply value chain; though this is a necessity for both developed and developing economies, it is more crucial for most developing economies at this period of unpredictable disruptive occurrences.

2. Enhance local productive base so as to reduce over-dependence on imported items. A major issue of struggle for most developing countries is how to source materials to drive value creation; a huge chuck of critical raw materials and consumables are imported via ports that are saddled with epileptic infrastructures and graft, these in-turn make the importation of items to be expensive, and thus, there is an urgent need to enhance local productive base.

3. Backward integration as a measure for building capacity of local suppliers. This option would provide a leeway for building resilience via sourcing local suppliers.

4. Recalibration of policy and business framework. Unstable business framework and policy framework are a bane in most developing countries, and these situations stifle resilience to a large extent; thus, there is a need for governments and key stakeholders to question the assumptions undergirding these policy frameworks with a view to building some measure of flexibility and elasticity; these resonate with resilience amplification.

5. Bolstering regulatory framework. The need to build a robust resilience quotient aligns with the bolstering of regulatory framework that allows for control with some measure of flexibility. Tight controls amidst graft and lack of transparency; this is at variance with resilience.

6. Leveraging innovation and technological prowess. Innovation and technological prowess are enablers to retool resilience; most developing countries are in dire need of both to elicit resilience.

7. Retooling infrastructural framework for adequacy and fitness for purpose. The deficits in infrastructural framework are re-occurring decimals in most developing countries such Nigeria, Ghana, and Kenya; this situation has trapped the capability to unleash resilience within most value chains in these developing economies.

8. Conclusion

Resilience has been a synonym for operational relevance and survival in business environments that are fraught with unending and unplanned upheavals. It is the required business elixir for survival, relevance, and sustainability in an evolving global business environment that is characterised by massive indices of disruptive tendencies of volatility, uncertainty, complexity, and ambiguity. To this end, organisations that want to thrive in sub-Saharan supply chain ecosystems should endeavour to consider the resilience capability as requisite option to remain relevance within the global ecosystem. This approach would necessitate an understanding of threats or disruptive tendency as a deviation from the resilience equilibrium. In doing so, this chapter’s discourse explored the concept of resilience from the framework of supply value chain, supply chain resilience, and incidents of supply disruptions in developing economies. Aside these, the discourse indicated some global best practices, key recommendations that organisations and governments domicile in these countries need to leverage as viable options for eliciting resilience. Thus, it is essentially crucial that governments, leaders, operators, and stakeholders build sustainable and resilient supply chain networks that can withstand global and local shocks. This approach would require a consolidated dimension that would balance cost with benefits for all players and stakeholders in the supply value chain and create business enablers that would also elicit resilience as competitive advantage and a measure of reliability and trustworthiness.