John Donigian, senior director of product strategy with Moody’s Analytics, discusses the importance of promoting visibility, collaboration and data exchange across the extended supply chain.

A definition of resilience is “the ability to identify the risk, move away from it, absorb it or pivot so that it doesn’t impact your revenue and profitability,” Donigian says. And the faster a company can do that, the better.

To properly assess risk, companies need to examine their operating models and determine their tolerance for any disruptions that might occur. But the effort needs to extend beyond the confines of the organization, Donigian says. It’s vital to include suppliers, buyers and service providers, all of which are potential risk points in an extended supply chain — or, in modern parlance, an ecosystem.

A key component of creating resilience is data — access to it, and willingness among supply chain partners to share it. Only then can companies get an accurate sense of where their risks really lie, and be able to mitigate their impact. “Data needs to be very visible and usable,” Donigian says.

One possible solution to the challenge of sharing data effectively is blockchain. To date, Donigian says, it’s been difficult finding real-world use cases about the successful deployment of blockchain in supply chains. But such examples are beginning to emerge, as supply chain partners realize the value of blockchain as a means of recording key transactions and other types of critical data.

Companies looking to create resilience in their supply chains should fully understand their risk tolerance based on their specific operating models and revenue targets, embrace powerful data sets for enabling visibility into those risks through all tiers of the supply chain, and invest in capabilities “that match what risks you’re trying to offset,” Donigian says.