How to make volatile supply chains viable
Written by CIPS Knowledge & Insight
Written by CIPS Knowledge & Insight
“Resilience” has been the go-to supply chain strategy since the pandemic sharply upended global networks. But with volatility now a permanent feature of international trade, could supply chain 'viability' usurp resilience as the most effective approach?
As short-term disruption gives way to a constantly shifting landscape, viability is emerging as a model focused not just on surviving crises, but on aligning procurement strategy and businesses with long-term instability.
We spoke to Dr Nuha Luqman, vice president of supply chain excellence at TAQA, who is currently running a research project on viable supply chains and what influences the viability of an organisation’s supply chain.
Read on to find out the difference between viability and resilience, how to develop a viable supply chain, and how viability in practice works at Unilever, Toyota and Apple. You can also contribute to Luqman’s research by completing this short survey on developing viable supply chains.
What is a viable supply chain?
“Viability” refers to the ability of an organisation's supply chain operation to maintain itself and survive amid changing and challenging conditions.
A viable supply chain is one designed not just for efficiency, but for endurance – one that can withstand disruptions, have its structure adapted as needed, and continue providing goods or services over the long term. In essence, viability is a higher-order property of a supply chain that spans multiple dimensions: it encompasses agility to seize new opportunities, resilience to absorb shocks, and sustainability to thrive in the long run.
The concept’s origins trace back to systems theory and ecology. The idea builds on the Viable System Model from organisational cybernetics (pioneered by Stafford Beer in the 1980s) and ecological models of survival, which emphasise adaptation to environmental change.
However, the specific term “viable supply chain” gained prominence in academic literature around the late 2010s and early 2020s, especially in response to the COVID-19 crisis. Researchers like Professor Dmitry Ivanov introduced viability as a new lens during the pandemic, noting that firms needed more than short-term resilience, they required the capacity to continually adapt and survive unprecedented, long-duration disruptions, and dynamically reinvent and sustain itself under stress, a concept rooted in earlier systems thinking but brought to the forefront by recent global supply chain upheavals.
What is the distinction between a 'viable' and a 'resilient' supply chain?
Viability and resilience are closely related, but they differ in scope and time frame. “Resilience" in supply chains traditionally refers to the ability to resist and recover from disruptions and bounce back to normal operations after a shock. For example, if a natural disaster shuts down a supplier, a resilient supply chain can find alternative sources or use buffer stock to meet demand and then restore its original state once the disruption passes. It’s about recovery to a prior performance level (“the old normal”) as quickly as possible.
“Viability” in supply chain takes it a step further than just the capacity to recover, but to also survive and evolve in the face of long-term or fundamental changes by undergoing structural adjustments; such as reconfigure its network, shift sourcing strategies, or redesign processes, in order to continue operating under new conditions rather than simply returning to the previous state.
If an organisation is resilient, it only has the ability to withstand shocks and recover, while with the broader capability of viability it has the learning capability to continuously adapt and persist in a changing environment.
In other words, resilience is a component of viability (you must be resilient to be viable), but viability encompasses a broader, long-term adaptability. During the COVID-19 pandemic, this distinction became clear: resilience was about keeping things running despite short-term disruptions, whereas viability meant adapting to a “new normal” – for instance, repurposing production lines, developing new supplier relationships, or altering product mix – to ensure the business could survive prolonged upheaval. This implies that the supply chain is constantly going through a strategic evolution.
How does a 'viability' mindset change how procurement and supply chain professionals assess suppliers, categories, or sourcing regions?
Adopting a 'viability' mindset fundamentally broadens the criteria and perspective used in procurement decisions. Traditionally, procurement might focus on cost, quality, and delivery performance when assessing suppliers or sourcing options. With a viability mindset, risk, adaptability, and long-term continuity become just as important. A viability mindset leads procurement to judge suppliers not only on immediate performance and cost, but on their resilience, flexibility, and strategic fit within a supply network built for the long haul. Professionals start valuing things like a supplier’s geographic diversification, their transparency and data-sharing (for visibility), and their commitment to sustainability and risk management, because all of these contribute to the supply chain’s ability to keep running come what may.
Professionals start asking questions like: Can this supplier survive a major disruption? Does this region pose geopolitical or climate risks? How easily can we re-route or repurpose this supply if conditions change? For example, instead of single-sourcing a critical component from the lowest-cost supplier in one country, a viability-focused approach might favor a more diversified supply base; even if it’s slightly more expensive, to avoid a single point of failure. We saw this shift in the automotive sector after the semiconductor shortages: many automakers are now qualifying multiple chip suppliers in different regions and forging closer partnerships, rather than relying on one distant supplier for all their needs.
In practical terms, procurement teams are increasingly stress-testing their supplier base and category strategies, assessing whether key suppliers have business continuity plans, financial strength, and the flexibility to scale or pivot production in an emergency. Categories of spend are segmented not just by spend volume, but by criticality and exposure to disruption where a seemingly low-cost commodity item might receive special attention if it could halt production.
Sourcing regions are evaluated through the lens of viability; factors like political stability, regulatory environment, infrastructure resilience, and even the likelihood of natural disasters or pandemics in the region come into play. Industry practice is reflecting this shift.
A recent Gartner study found that 63% of procurement leaders plan to diversify their supply base and 77% are increasing collaboration with key suppliers – these steps indicate a more viability-oriented approach, emphasizing multi-sourcing and strategic partnerships to bolster the network’s robustness. Another study on the global automotive industry’s pandemic response noted that companies improved viability by rethinking sourcing strategy and building more intertwined supply networks, such as partnering with alternative suppliers and even competitors to ensure critical supplies.
How will supply chain viability impact the role of procurement as a function in the future?
Surveys show that forward-looking companies view procurement as a “key competitive advantage” and a driver of innovation, resilience and sustainability strategic directives. As viability thinking takes hold, procurement will be tasked with balancing the classic objectives (cost, quality, delivery) with newer ones (resilience, sustainability, agility), leading to changing in operational back-office business support procurement scorecards and KPIs to ones that are closer alignment with project and operational planning and corporate strategy. Ultimately, transforming the procurement and supply chain organisation within a firm into one of supply network stewardship, with the strategic objective of ensuring that the network of suppliers and partners is not only efficient but also adaptable, value adding, ethically sound, and robust against shocks. This makes procurement a critical strategic partner for the business, directly contributing to competitive advantage by building a supply chain operation that can weather storms and seize opportunities in a volatile world.
Embracing supply chain viability will significantly elevate and broaden the role of procurement by evolving from a tactical, cost-focused function into a strategic orchestrator of supply networks. So, procurement is not just about negotiating the best price, but through viability considerations has become about securing the long-term health and continuity of the supply ecosystem, requiring procurement leaders will be more deeply involved in paradoxical strategic decisions such as network design, make-or-buy choices, and risk management initiatives.
For example, decisions about dual sourcing or regionalising supply chains to avoid disruptions involve procurement at the highest levels, working alongside operations, engineering and even R&D to balance cost, risk, and innovation. Here, procurement’s mandate expands to actively manage risk and resilience. Thus, ensuring supply continuity and robustness becomes as critical as delivering cost savings, and shifting procurement’s role toward being a guardian of the company’s supply chain viability that includes scanning the horizon for risks from geopolitical changes to supplier financial distress, developing mitigation plans like securing alternative suppliers or raw material substitutes, and coordinating cross-functional responses to disruptions.
It is anticipated that in many industries procurement will be taking the lead role in building strategic collaborative and innovative relationships, as these partnerships can improve collective resilience and delivering sustainability objectives. We can already see this in the consumer electronics sector, where procurement is spearheading collaborative initiatives with key suppliers to co-develop contingency plans or share data for better visibility. We can also see this in the pharmaceutical industry, where procurement is becoming central to consortiums or public-private partnerships that ensure critical supplies collaborate to boost vaccine supply chains viability.
Organisationally, procurement is gaining a stronger voice in the C-suite leadership structures with the emergence of executive strategic roles titles like chief supply chain officer or chief procurement officer reporting directly to CEOs, reflecting how vital supply chain viability is to business success.
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Further information on this topic
Supply chain viability is a long-term strategic orientation that goes far beyond short-term resilience or disruption management. It represents an organisation’s enduring ability to adapt, evolve, and sustain performance amid continuous environmental, geopolitical, and market changes. While resilience focuses on recovering from specific shocks, viability encompasses the capacity to continuously learn, reconfigure, and maintain balance between efficiency, adaptability, and sustainability over time. In essence, it is the foundation for long-term competitiveness, ensuring that the supply chain not only survives disruptions but thrives in uncertainty.
Companies across industries have demonstrated that viability must be built into the DNA of supply chain strategy. Unilever, for example, embedded sustainability and social responsibility into its operations through its Sustainable Living Plan, transforming its sourcing and supplier collaboration practices to ensure continuity, agility, and carbon reduction over the long term. During the COVID-19 pandemic, this strategic foundation allowed Unilever to maintain supply chain continuity and stakeholder trust while advancing its environmental goals. Toyota provides another strong example through its continuous improvement philosophy, which emphasises long-term supplier partnerships, visibility, and flexibility. Following the 2011 Fukushima disaster, Toyota redesigned its supplier ecosystem, incorporating digital monitoring and multi-sourcing to anticipate future shocks, creating a system capable of self-adjusting to change.
Similarly, Apple has operationalised viability through strategic diversification and digital foresight. By shifting portions of its production from China to India and Vietnam, Apple has not only mitigated short-term geopolitical risks but also created long-term structural agility that allows it to sustain global operations under evolving trade dynamics. Maersk has pursued long-term viability by reinventing itself from a traditional shipping company into an integrated logistics and digital solutions provider, using end-to-end visibility, data-driven platforms, and investment in sustainable fuels to future-proof its business model. Procter & Gamble (P&G) also illustrates a viability-oriented mindset by embedding predictive analytics and risk-sensing technologies into its supply chain operations, allowing it to anticipate and respond dynamically to disruptions.
Collectively, these examples show that supply chain viability is not about reacting to crises but about designing systems that can continuously adapt to them. It requires foresight, innovation, sustainability, and an ongoing balance between efficiency and flexibility. The most progressive organisations treat viability as a strategic capability – a dynamic state of readiness that ensures long-term continuity, competitiveness, and value creation in an increasingly volatile global landscape.
The key is to make viability an ongoing process through continuous monitoring, scenario planning, and cross-functional strategy reviews, rather than a one-time project.
Frameworks like the viable supply chain model which integrates agility, resilience, sustainability provide a conceptual map, and tools like stress-testing and enhanced KPIs provide the mechanisms to drive it. Embedding viability into the organisation’s supply chain processes means making it a deliberate part of strategy and decision-making, rather than an ad-hoc reaction when crises hit. One way to do this is by expanding the performance framework beyond traditional KPIs like cost, service level, and inventory turns.
For example, companies are introducing metrics and tools specifically aimed at gauging resilience, sustainability and adaptability. Some useful concepts include “time-to-recover” (how long it takes for the supply chain to restore operations after a disruption) and “time-to-survive” (how long the supply chain can meet demand during a disruption before running out of stock). These metrics force managers to plan for worst-case scenarios and can be tracked alongside financial KPIs.
Additionally, firms are developing supply chain risk indices or viability scorecards that rate the network’s exposure to various risks (such as supplier concentration risk, geographic risk, etc.) and readiness to respond. Beyond metrics, frameworks are emerging to institutionalise viability.
One approach drawing attention is regular stress-testing of supply chains, analogous to financial stress tests; similarly to how banks simulate crisis scenarios to check their capital adequacy, supply chain teams now simulate disruption scenarios (a sudden loss of a key supplier, a port closure, a demand spike, etc.) to identify weak links and improvement opportunities. This kind of digital stress test allows firms to see how their network would perform under extreme conditions and to evaluate the impact of potential mitigation strategies.
Research by Ivanov and Dolgui (2022) highlights a “human-centred ecosystem viability” perspective, which means considering the entire supply network (including all partners and stakeholders) and societal factors when planning for resilience. In practice, this could involve collaborative planning with key suppliers or industry consortia to ensure the whole ecosystem can endure shocks.
Another framework extends beyond the firm’s four walls: incorporating ecosystem metrics – for instance, tracking not just your own tier-1 suppliers’ risk, but also looking at tier-2 andtTier-3 dependencies, and maybe industry-wide capacity for critical materials. To embed viability, companies are also revisiting governance and processes, where some have set up dedicated supply chain risk committees or resilience and sustainability officers who champion ongoing risk assessment and adaptation efforts within the supply chain operational management.
Performance reviews for procurement and supply chain staff now often include objectives related to resilience (e.g. establishing alternate sources or improving supply flexibility) in addition to traditional cost targets. Overall, by adopting these, professionals ensure that viability is baked into strategic planning, budgeting, and day-to-day decision-making, not just talked about when disaster strikes.
Viability is not only about surviving crises but about aligning procurement strategy with long-term sustainability and societal expectations. Leaders must integrate environmental, social, and governance (ESG) considerations into procurement decisions, recognising that sustainable practices enhance long-term supply continuity and stakeholder value. For instance, forward-looking companies invest in suppliers located in regions less exposed to climate risks or promote circular supply loops that minimise resource dependency. Such initiatives reflect paradoxical leadership – simultaneously advancing profitability and responsibility. Fostering supply chain viability calls for a new breed of procurement and supply chain leadership equipped with a broadened skill set and an evolved mindset, one rooted in paradoxical thinking and the ability to balance competing priorities simultaneously.
Procurement and supply chain leaders must develop managerial paradoxical capabilities that integrate systems thinking, emotional regulation, and analytical intelligence to lead in an era defined by volatility, complexity, and uncertainty. The reason being that today supply chain viability requires leaders who can think in dualities where there is balancing efficiency with resilience, global optimisation with local responsiveness, and short-term performance with long-term sustainability.
At the core of this transformation in procurement and supply chain leadership, is the ability to adopt systems thinking and adaptability, with the approach of recognising and viewing the supply chain as a complex, interconnected system where disruptions or improvements in one node influence the entire network. This perspective encourages holistic decision-making, scenario planning, and dynamic strategy adjustment rather than rigid adherence to fixed procurement policies. Adaptability, supported by paradoxical cognition, allows leaders to navigate uncertainty with agility and foresight, making sense of competing demands and turning tensions into sources of innovation and improvement.
Agility and flexibility are equally critical in shaping viable supply chains, however leaders must foster teams that respond rapidly and effectively to change accelerating supplier onboarding, reconfiguring sourcing channels, or adjusting contract terms when disruptions occur. This requires emotional composure and confidence in key elements of emotion regulation to lead decisively under pressure and maintain calm, balanced judgment amid turbulence. Agility also extends to contract design and supplier management; supply chain viable leaders incorporate flexibility clauses, alternative sourcing options, and contingency frameworks that enable proactive rather than reactive decision-making.
Equally essential is supply chain integration and collaboration both internally and externally, where relationship building transcends transactional relationships to bridging between suppliers, internal functions, and strategic partners. Through supply chain viability the procurement and supply chain leader has the role of cultivating trust, transparency, and shared problem-solving, enabling co-innovation and joint resilience and sustainability planning with key suppliers. This collaborative capability depends on emotional intelligence, empathy, and communication skills that break down silos and align diverse interests toward collective resilience and sustainability goals.
Procurement leaders must champion the use of data-driven tools and digital technologies, enabling visibility and analytical capability expansion to further reinforce viability. This will allow the supply chain organisation to gain real-time visibility into supply networks, supplier performance, and risk exposure. Here, supply chain analytics capability becomes a cornerstone of managerial paradoxical capability, allowing leaders to make informed decisions that balance immediate cost pressures with long-term sustainability goals. Leveraging AI, predictive analytics, and scenario modelling enables procurement to anticipate disruptions, assess trade-offs, and maintain equilibrium between efficiency and adaptability.
Finally, risk management and innovation mindsets must become second nature to procurement leaders. They must act as ‘chief risk officers’ for their supply base –anticipating, quantifying, and mitigating vulnerabilities while maintaining readiness for emerging opportunities. True viability-oriented leaders see disruptions not just as threats but as catalysts for innovation, as exemplified by firms that repurposed production during crises or leveraged new technologies like additive manufacturing to meet supply shortages.
In essence, procurement leaders aiming to shape supply chain viability must evolve into multi-skilled integrators – combining paradoxical cognition, emotional intelligence, digital fluency, and strategic foresight. They must lead with both logic and empathy, manage contradictions as opportunities, and view their ecosystems through a lens of interdependence and adaptability. This is not traditional procurement leadership – it is adaptive, analytical, and paradox-aware leadership, capable of building supply chains that endure, evolve, and excel in a world of perpetual disruption.