The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage

Gold Award Winner for Business and Economics in the 2005 ForeWord Magazine Book of the Year Awards

What happens when fire strikes the manufacturing plant of the sole supplier for the brake pressure valve used in every Toyota? When a hurricane shuts down production at a Unilever plant? When Dell and Apple chip manufacturers in Taiwan take weeks to recover from an earthquake? When the U.S. Pacific ports are shut down during the Christmas rush? When terrorists strike? In The Resilient Enterprise, Yossi Sheffi shows that companies' fortunes in the face of such business shocks depend more on choices made before the disruption than they do on actions taken in the midst of it—and that resilience benefits firms every day, disaster or no disaster. He shows how companies can build in flexibility throughout their supply chains, based on proven design principles and the right culture—balancing security, redundancy, and short-term profits. And he shows how investments in resilience and flexibility not only reduce risk but create a competitive advantage in the increasingly volatile marketplace.

Sheffi describes the way companies can increase security—reducing the likelihood of a disruption—with layered defenses, the tracking and analysis of “near-misses,” fast detection, and close collaboration with government agencies, trading partners, and even competitors. But the focus of the book is on resilience—the ability to bounce back from disruptions and disasters—by building in redundancy and flexibility. For example, standardization, modular design, and collaborative relationships with suppliers (and other stakeholders) can help create a robust supply chain. And a corporate culture of flexibility—with distributed decision making and communications at all levels—can create a resilient enterprise.

Sheffi provides tools for companies to reduce the vulnerability of the supply chain they live in. And along the way he tells the stories of dozens of enterprises, large and small, including Toyota, Nokia, General Motors, Zara, Land Rover, Chiquita, Aisin Seiki, Southwest Airlines, UPS, Johnson and Johnson, Intel, Amazon.com, the U.S. Navy, and others, from across the globe. Their successes, failures, preparations, and methods provide a rich set of lessons in preparing for and managing disruptions.
Additional material available at www.TheResilientEnterprise.com

"The Resilient Enterprise is more than a grab bag of stories about fires, thieves, and tornadoes. It is the timely analysis of an important--and overlooked aspect of business strategy. Mr. Sheffi argues that crisis control can be a competitive advantage for companies that get it right. Wise planning at headquarters is part of the answer, but only part: Companies need a whole culture of flexibility. It is impossible to know where trouble will hit next, but it is possible to create an atmosphere in which people at all levels respond to disruptions quickly and confidently. Metaphorically, levees can break at any time." -- "Wall Street Journal" " Sheffi is quickly becoming the global expert on resilient enterprises."-- "John Robb's Weblog" -- Sean Silverthorne, "HBS Working Knowledge" --Michael Hammer, author of "Reengineering the Corporation" --Kenneth Wykle, President, National Defense Transportation Association --Patrick T. Harker, Dean, The Wharton School, University of Pennsylvania --Dame Sandra Dawson, Director, Judge Institute of Management, University of Cambridge --R. James Woolsey, former Director of Central Intelligence, Vice President, Booz Allen Hamilton --Stephen E. Flynn, Jeane J. Kirkpatrick Senior Fellow for National Security Studies, Council on Foreign Relations, and author of "America the Vulnerable" " [Sheffi is] quickly becoming the global expert on resilient enterprises." -- "John Robb' s Weblog" " In this world of 'lean inventory' this is a cautionary book that needs to be taken seriously." -- "800 CEO-Read" " This is the best business book I have read this year. It will be essential for senior managers and CEOs, for whom it will provide much food for thought and a stimulus to action." --John Allan, Chief Executive, Exel PLC " A crucial book for anyone involved in operations and logistics to understand how to build a truly flexible organization that can not only withstand but thrive in a risky world." --Patrick T. Harker, Dean, The Wharton School, University of Pennsylvania " In our enormously complex world, disruption is an inevitability and resilience a requirement. Yossi Sheffi's landmark book offers managers a comprehensive approach to preparing for what cannot be predicted." --Michael Hammer, author of "Reengineering the Corporation" " This may be the most important business book that you will buy this year.... Sheffi, an MIT Professor of engineering who writes with refreshing clarity and first-hand business knowledge has produced a practical guide, not just another risk management manual." -- "Director Magazine" " Yossi Sheffi's book makes it vividly clear that the winners on the competitive playing field will be those companies who effectively manage their supply chains, particularly in the face of adversity. This is a boardroom issue, and a must-read." --Michael L. Eskew, Chairman & CEO, UPS " Insightful, shrewd, and creative. This book shows how enterprises properly made resilient against both terrorism and the disruptions inherent in globalization can also have the flexibility to respond more effectively to today's fast-changing markets." --R. James Woolsey, former Director of Central Intelligence, Vice President, Booz Allen Hamilton " This book offers reassurance to the CEO who wakes to a nightmare of what Sheffi calls high-impact/low-probability disruptions. It concludes with recommendations for securing a resilient organization that can suffer the shock of potentially catastrophic destruction, learn from it, and bounce back." --Dame Sandra Dawson, Director, Judge Institute of Management, University of Cambridge " However counter-intuitive this may sound, Sheffi's detailed examination of the supply chain breadsowns at companies such as Amazon, Dell, General Motors, Intel, and UPS leaves little room for doubting his key messages: disaster might not be frequent but it is inevitable. And, the measures that organizations undertake before the event will almost certainly have a greater influence on the subsequent consequences than anything they might do afterwards." -- "Information Age" " Excellent!! I really enjoyed reading it. For me, unlike many business books, it held my attention and I wanted to keep reading to get to the next chapter. The strength of the book is the 'real life' examples and the vignettes woven into the topics being discussed. The content is so good that if you look at the examples/discussions though the government's eyes, there is knowledge to be gained throughout the book. I appreciate the opportunity to read it." --Kenneth Wykle, President, National Defense Transportation Association " The book offers solid advice and plenty of case studies on reducing vulnerability (start with an exhaustive analysis of your weaknesses), and on increasing supply chain flexibility (consider a last-minute customization program for certain products). And by the way, flexible companies are also top performers on a daily basis, writes Sheffi. We especially appreciated the book's " Profile of a Disruption" and its warning that disruptions can keep on disrupting long after the fire is out. Just ask Ericsson." -- Sean Silverthorne, "HBS Working Knowledge" " "The Resilient Enterprise" is more than a grab bag of stories about fires, thieves, and tornadoes. It is the timely analysis of an important--and overlooked aspect of business strategy. Mr. Sheffi argues that crisis control can be a competitive advantage for companies that get it right. Wise planning at headquarters is part of the answer, but only part: Companies need a whole culture of flexibility. It is impossible to know where trouble will hit next, but it is possible to create an atmosphere in which people at all levels respond to disruptions quickly and confidently. Metaphorically, levees can break at any time." -- "Wall Street Journal" " "The Resilient Enterprise" is the must-read post-9/11 book for every CEO, senior manager, and company director. Sheffi provides the perfect antidote for the all-too-human tendency to reach for rosy glasses despite the fact that disasters and acts of catastrophic terrorism are not a question of if, but when. Companies that 'think the unthinkable' and embrace the commonsense recommendations outlined in this book will prosper both before and after we hit the inevitable bumps along the 21st-century highway." --Stephen E. Flynn, Jeane J. Kirkpatrick Senior Fellow for National Security Studies, Council on Foreign Relations, and author of "America the Vulnerable" & quot; [Sheffi is] quickly becoming the global expert on resilient enterprises.& quot; -- John Robb& rsquo; s Weblog & quot; In this world of 'lean inventory' this is a cautionary book that needs to be taken seriously.& quot; -- 800 CEO-Read & quot; This is the best business book I have read this year. It will be essential for senior managers and CEOs, for whom it will provide much food for thought and a stimulus to action.& quot; -- John Allan, Chief Executive, Exel PLC & quot; A crucial book for anyone involved in operations and logistics to understand how to build a truly flexible organization that can not only withstand but thrive in a risky world.& quot; -- Patrick T. Harker, Dean, The Wharton School, University of Pennsylvania & quot; This may be the most important business book that you will buy this year.... Sheffi, an MIT Professor of engineering who writes with refreshing clarity and first-hand business knowledge has produced a practical guide, not just another risk management manual.& quot; -- Director Magazine & quot; In our enormously complex world, disruption is an inevitability and resilience a requirement. Yossi Sheffi's landmark book offers managers a comprehensive approach to preparing for what cannot be predicted.& quot; -- Michael Hammer, author of Reengineering the Corporation & quot; Yossi Sheffi's book makes it vividly clear that the winners on the competitive playing field will be those companies who effectively manage their supply chains, particularly in the face of adversity. This is a boardroom issue, and a must-read.& quot; -- Michael L. Eskew, Chairman & CEO, UPS & quot; Insightful, shrewd, and creative. This book shows how enterprises properly made resilient against both terrorism and the disruptions inherent in globalization can also have the flexibility to respond more effectively to today's fast-changing markets.& quot; -- R. James Woolsey, former Director of Central Intelligence, Vice President, Booz Allen Hamilton & quot; This book offers reassurance to the CEO who wakes to a nightmare of what Sheffi calls high-impact/low-probability disruptions. It concludes with recommendations for securing a resilient organization that can suffer the shock of potentially catastrophic destruction, learn from it, and bounce back.& quot; -- Dame Sandra Dawson, Director, Judge Institute of Management, University of Cambridge & quot; However counter-intuitive this may sound, Sheffi's detailed examination of the supply chain breadsowns at companies such as Amazon, Dell, General Motors, Intel, and UPS leaves little room for doubting his key messages: disaster might not be frequent but it is inevitable. And, the measures that organizations undertake before the event will almost certainly have a greater influence on the subsequent consequences than anything they might do afterwards.& quot; -- Information Age & quot; Excellent!! I really enjoyed reading it. For me, unlike many business books, it held my attention and I wanted to keep reading to get to the next chapter. The strength of the book is the 'real life' examples and the vignettes woven into the topics being discussed. The content is so good that if you look at the examples/discussions though the government's eyes, there is knowledge to be gained throughout the book. I appreciate the opportunity to read it.& quot; -- Kenneth Wykle, President, National Defense Transportation Association & quot; The book offers solid advice and plenty of case studies on reducing vulnerability (start with an exhaustive analysis of your weaknesses), and on increasing supply chain flexibility (consider a last-minute customization program for certain products). And by the way, flexible companies are also top performers on a daily basis, writes Sheffi. We especially appreciated the book's & quot; Profile of a Disruption& quot; and its warning that disruptions can keep on disrupting long after the fire is out. Just ask Ericsson.& quot; -- Sean Silverthorne, HBS Working Knowledge & quot; The Resilient Enterprise is the must-read post-9/11 book for every CEO, senior manager, and company director. Sheffi provides the perfect antidote for the all-too-human tendency to reach for rosy glasses despite the fact that disasters and acts of catastrophic terrorism are not a question of if, but when. Companies that 'think the unthinkable' and embrace the commonsense recommendations outlined in this book will prosper both before and after we hit the inevitable bumps along the 21st-century highway.& quot; -- Stephen E. Flynn, Jeane J. Kirkpatrick Senior Fellow for National Security Studies, Council on Foreign Relations, and author of America the Vulnerable " ""The Resilient Enterprise" is more than a grab bag of stories about fires, thieves, and tornadoes. It is the timely analysis of an important--and overlooked aspect of business strategy. Mr. Sheffi argues that crisis control can be a competitive advantage for companies that get it right. Wise planning at headquarters is part of the answer, but only part: Companies need a whole culture of flexibility. It is impossible to know where trouble will hit next, but it is possible to create an atmosphere in which people at all levels respond to disruptions quickly and confidently. Metaphorically, levees can break at any time."-- ""Wall Street Journal"" "This may be the most important business book that you will buy this year.... Sheffi, an MIT Professor of engineering who writes with refreshing clarity and first-hand business knowledge has produced a practical guide, not just another risk management manual."-- ""Director Magazine"" "[Sheffi is] quickly becoming the global expert on resilient enterprises."-- ""John Robb's Weblog"" "However counter-intuitive this may sound, Sheffi's detailed examination of the supply chain breadsowns at companies such as Amazon, Dell, General Motors, Intel, and UPS leaves little room for doubting his key messages: disaster might not be frequent but it is inevitable. And, the measures that organizations undertake before the event will almost certainly have a greater influence on the subsequent consequences than anything they might do afterwards."-- ""Information Age"" "In this world of 'lean inventory' this is a cautionary book that needs to be taken seriously."-- ""800 CEO-Read"" "The book offers solid advice and plenty of case studies on reducing vulnerability (start with an exhaustive analysis of your weaknesses), and on increasing supply chain flexibility (consider a last-minute customization program for certain products). And by the way, flexible companies are also top performers on a daily basis, writes Sheffi.We especially appreciated the book's "Profile of a Disruption" and its warning that disruptions can keep on disrupting long after the fire is out. Just ask Ericsson."-- Sean Silverthorne, ""HBS Working Knowledge"" "Yossi Sheffi's book makes it vividly clear that the winners on the competitive playing field will be those companies who effectively manage their supply chains, particularly in the face of adversity. This is a boardroom issue, and a must-read."--Michael L. Eskew, Chairman & CEO, UPS "Insightful, shrewd, and creative. This book shows how enterprises properly made resilient against both terrorism and the disruptions inherent in globalization can also have the flexibility to respond more effectively to today's fast-changing markets."--R. James Woolsey, former Director of Central Intelligence, Vice President, Booz Allen Hamilton "This is the best business book I have read this year. It will be essential for senior managers and CEOs, for whom it will provide much food for thought and a stimulus to action."--John Allan, Chief Executive, Exel PLC "A crucial book for anyone involved in operations and logistics to understand how to build a truly flexible organization that can not only withstand but thrive in a risky world."--Patrick T. Harker, Dean, The Wharton School, University of Pennsylvania ""The Resilient Enterprise" is the must-read post-9/11 book for every CEO, senior manager, and company director. Sheffi provides the perfect antidote for the all-too-human tendency to reach for rosy glasses despite the fact that disasters and acts of catastrophic terrorism are not a question of if, but when. Companies that 'think the unthinkable' and embrace the commonsense recommendations outlined in this book will prosper both before and after we hit the inevitable bumps along the 21st-century highway."--Stephen E. Flynn, Jeane J. Kirkpatrick Senior Fellow for National Security Studies, Council on Foreign Relations, and author of "America the Vulnerable" "This book offers reassurance to the CEO who wakes to a nightmare of what Sheffi calls high-impact/low-probability disruptions. It concludes with recommendations for securing a resilient organization that can suffer the shock of potentially catastrophic destruc...