In the aftermath of covid, resilient supply chains came to be seen as the key to successful, competitive manufacturing and selling. Accessing markets and manufacturing goods for the markets were found to be seriously dependent on supply chains. There began a scramble for creating ‘resilient’ supply chains. This is still working itself out, but this new journey in supply chains has been disrupted by developments in IOT, AI, Big Data, 3D printing, 5G and 6G connectivity and data transmittivity – all now being a part of ‘Industry 4.0’. With I 4.0, the development of resilient supply chains has taken a new direction. In fact, one could say that the SC is now turned 180° and returning to its origins. The Big Three – Ford, General Motors and Chrysler – were the originators of the ‘many suppliers, dispersed suppliers, supplying at the lowest possible cost’ syndrome. To keep the cost of their supplies low, they purchased from several suppliers. With the advent of TQM, and Toyota JIT practices, and lean management, this was turned by 180° - have suppliers – have few. If possible, own some or all of these, either fully or partially, keep management control through equity interests. Now, with the ‘resilient’ supply chain phenomenon, the tide is again turning. 

In order to reduce risks, keep the supply chain functioning and keeping costs as low as possible, companies are working to develop alternate suppliers, specially from different geographies. This is a difference, when compared to what the big three did in their early days. And this is the trend which will, going forward, become a feature of all supply chains which are a part of large manufacturing companies’ ecosystem. And these are what we call as the ‘Holistic Supply Chain’ (HSC). 

The HSC is a new development, the next step in the evolution of supply chains. The HSC is typically for large manufacturing companies, while also applicable to medium ones too, but, for SME’s and MSME’s, doesn’t make a lot of sense. What are the forces driving the formation of HSC? For one, covid type of interruptions where supplies suddenly dry up due to natural calamities. Although known in the business as a ‘Force Majeure’ condition, the newness is that, while the FM conditions would last for a few days or weeks, the covid type of interruptions last longer, lead to significant changes in the composition of the SC, seriously affect costs over the medium and long term. Technological and other interventions are not either in place or not even in sight in the near term. There are four features which distinguish a HSC from a Resilient SC (or RSC). HSC is an advancement over RSC. 

Firstly, HSCs are geographically dispersed. For example, large manufacturing companies will try to have suppliers located in many geographies, including at-home/ in-house. In a 1994 paper published in the HBR, two Harvard Professors – Gary Pisano and Robert Hayes – had recommended this step. The truth value of this recommendation is now dawning upon the world. They recommended that the USA should always maintain a certain presence in manufacturing, especially R&D and design, apart from running the lines, within the country, even if they have facilities outside.