Sheffi builds on three years of research aimed at understanding the effects of disruptions on supply chain operations. He highlights just how vulnerable supply chains can be, often as a result of events far removed from a business's operations. In particular, Sheffi sets out to address what he calls low probability/high impact events – those that are hard to predict with any certainty, but that can have a devastating effect on a business.
Yossi Sheffi outlines the characteristic “positive feedback loop” of logistics clusters development; how logistics clusters “add value” by generating other industrial activities; why firms should locate their distribution and value-added activities in logistics clusters; and the proper role of government support, in the form of investment, regulation, and trade policy.
Sheffi also argues for the most important advantage offered by logistics clusters in today’s recession-plagued economy: jobs, many of them open to low-skilled workers, that are concentrated locally and not “offshorable.” These logistics clusters offer what is rare in today’s economy: authentic success stories. For this reason, numerous regional and central governments as well as scores of real estate developers are investing in the development of such clusters.
The Resilient Enterprise: How should companies define and prioritize threats?
What are the common characteristics of all high-impact disruptions?
Professor Sheffi sheds light on all these questions and more in a call for action based on the experience of many companies – those who did well in the face of disruptions and those who faltered.