Antifragility Techniques for Supply Chains

In a previous post, I declared the quest for an antifragile supply chain as one of the top challenges for logistics in 2022. Antifragile is a term coined by risk analyst and statistician Nicholas Taleb and refers to objects or systems that can not only withstand adverse circumstances, but gain from them.

I guess that at least some of my readers expose antifragile behaviour by doing morning workouts instead of directly jumping into their comfortable office chair. A yoga workout forces their muscles to work against gravity, but brings them the long-term benefit of improved strength and a reduced probability of back pain.

But while it seems fairly easy to train the antifragility of the human body, making a supply chain antifragile seems a much more challenging task. Luckily, Nicholas Taleb describes some very useful techniques in his book Antifragile, that have also been featured in a recent article of the Journal of Purchasing and Supply Management. For reasons of brevity, I'll only feature two of them in this article:

Optionality

describes a situation that offers multiple choices to achieve a goal and also refers to the quality of those choices. If, for example, your whole supply chain relied on wooden pallets to transport goods, you 'll likely curse 2021, because during this year the lumber price increased by more than 50% due to heavy demand in building and renovation. Wooden pallets became expensive or even unavailable, because at times there was not enough lumber on the market to satisfy all needs.

But what if you trained your suppliers and production sites to work with pallets made from other materials such as compressed wood chips or cardboard? I'm totally aware that not every pallet type is applicable for every use case, but relying on just one raw material can make your supply chain vulverable to market swings. Hence, increasing optionality in your supply chain processes might be one way to make it less fragile.

Eustress

or motivational stress is another interesting antifragile technique. By setting up meaningful, yet realistic challenges for your supply chain partners you can help them to embrace a continuous improvement mindset and get rid of the "never touch a running system" mentality. It is important that the goals of these challenges are not just one dimensional (e.g. less cost), but address different benefits. One initiative to reduce inventory costs using an optimized disposition system could be following be one that aims to minimize labor time spent on unloading trucks by using automation and modern tools.

But when is my supply chain anti-fragile and what's the benefit?

Your supply chain never "achieves" anti-fragility - like any continous improvement initiative the concept of anti-fragility requires a constant "inspect and adapt" mentality to look out for risks and make your processes less susceptible to them. The reward is more stamina in adverse situations. If your supply chain is able to deliver products when your competitors can't, you' ll bring many new customers to your brand.