September 6, 2005

Jack Covert Selects: Jack Covert Selects: The Resilient Enterprise

By: Jack @ 6:08 PM – Filed under: Management & Workplace Culture

The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage by Yossi Sheffi, The MIT Press, 320 Pages, $29.95 Hardcover, October 2005, ISBN 0262195372
The publisher MIT Press doesnt do a lot of business books. The author of this book, Yossi Sheffi, connected with me and asked me to look at his book. I am glad I did. As he states:
This book is a call for action. It is not, however, a call to start spending large amounts of resources on turning every plant into a fortress and stockpiling mountains of inventory. Instead, it is a call for systematic analysis of vulnerability, for learning from other peoples experience, for increasing supply chain flexibility, for focusing on resilience as much as on security, and for the effective use of resources designed to get business benefits out of investments in security and resilience.

Sheffi illustrates the book with well-known stories such as the shutdown after 9/11 and the corresponding supply chain nightmares. Sheffi also mentions less famous events, like the lightning strike on a Philips plant in New Mexico that made chips for Nokia and Ericsson cell phones. Originally Philips planned to be back in business in a week. Unfortunately for Philips, it took longer than expected. Nokia showed resilience by acting quickly and accordingly; Ericsson, however, didnt respond as rapidly. It took Ericsson nine months to recover and during that time the mobile phone division lost US$2.34 billion.
Sheffi uses the 1995 Kobe Japan earthquake, 1984 Bhopal chemical leak, foot-and-mouth disease in the UK during 2001, and the ten-day lockout in 2002 of the west coast ports to demonstrate vulnerability. He uses these examples and more as illustrations of how resourceful, adaptive, resilient organizations survived.
In this world of "lean inventory" this is a cautionary book that needs to be taken seriously because the best way to learn is from others mistakes, rather than our own. I must say that I was surprised when finding that I enjoyed and learned a lot from this book.