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Rotman Insights Hub | University of Toronto - Rotman School of Management

The path to true supply chain resilience: Stop reacting, start designing

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Andre Cire

Oh, uncertainty — a word that now dominates headlines, articles and everyday conversations in supply chains. It carries with it a tone of anxiety, even melancholy. And for good reason. We are living through a period defined by life-altering disruptions: tariffs imposed by close allies, unexpected wars, a sluggish global economy and the extraordinary pace of technological change, particularly driven by AI. These forces have shaken our sense of stability and control, leaving organizations (and people) to grapple with an ever-shifting landscape.

The most common advice is to accept uncertainty as the new normal. Push through. Adapt your company or get left behind — or any similarly bold but vague leadership slogan. There is certainly truth to this mindset, but I do not think it tells the whole story. In fact, it can lead to decisions that are more reactive than strategic, such as assuming that swapping out half your processes or workforce for unproven AI tools is the magic ticket to becoming a top performer.

I believe that beneath the buzzwords of agility and adaptation lies something more fundamental: a feeling of grief and loss that quietly undermines the path to true resilience. Relationships in supply chains and across companies more broadly, are essential because they provide stability, shared resources, operational support and, more often than not, lower costs. If every interaction is purely transactional, there is little incentive to collaborate on meaningful challenges or invest in long-term solutions. Firms with strong relationships and shared goals tend to absorb shocks more gracefully and find themselves at the front of the line when disruptions occur.

And yet, in the span of just a few months, tariffs, geopolitical upheaval and rapid technological shifts have fractured relationships that took years or decades to build. The toxic cycle of punishing tariff hikes, rising hopes of new deals and renewed escalation has only deepened this sense of loss. This must be acknowledged. Ignoring the emotional undercurrent risks pushing organizations towards shallow responses, often in the form of quick fixes that appear strategic on paper but lack the human and relational depth needed to withstand the next crisis. A truly resilient supply chain begins with honesty: about what was lost, why it mattered and how to rebuild something stronger.

How does this process look once leaders begin to internalize that the feeling of vulnerability is valid and widely shared? I have a few initial, concrete steps to offer. In my research discipline, optimization and operations management, uncertainty is treated as a core input to our models, just as important as costs, capacities, or stakeholder constraints. It is a central part of system design. In other words, resilient systems should not simply react to the unknown, but anticipate it, measure it and assess how well they can withstand it.

Within that context, the first step to bringing clarity and understanding the unknown is a stress test. Begin by drawing your company’s network — how suppliers, customers and partners are connected — and then remove them one at a time to observe the impact on your supply chain. Next, create new scenarios by simulating changes in key links, such as shifts in transportation costs or supplier incentives, and ask difficult questions, always from a place of curiosity and openness: What would be the impact on my prices? Are there alternative suppliers I could turn to? Would my customers experience delays, and are those delays acceptable?

For each scenario, define quantitative measures, such as risk levels or time-to-recovery. (You can read some real-world examples at Harvard Business Review and International Journal of Production Research). It is also worth noting that these questions are not always easy to confront, especially in high-pressure environments. But by acknowledging that discomfort and engaging deeply with these scenarios, you create space to think more clearly, explore alternatives and naturally surface options that might otherwise go unnoticed. This is, in a genuine sense, what it really means to embrace uncertainty.

In this process, you will encounter an important reality: It is generally not possible to hedge against every possible scenario. And even when it is, doing so often requires such a level of safety and low-risk decision-making that you would leave significant value on the table. Thus, there is an important non-negotiable in the path to resilience: strategic, single-minded, uncompromising, relentless prioritization. What truly matters for your products, customers and partners? Is it acceptable for quality to degrade slightly, as long as prices remain stable? Or are your customers deeply connected to your brand and willing to absorb higher prices? Is a particular market truly critical to your business? The risk levels identified in your stress test, for example, can help surface these priorities. Ultimately, however, they are rooted in your vision and values. Everything else is often just noise, that is, distractions that slow your organization’s ability to respond and adapt.

Once you have understood the risks in your network through a stress test and clarified your priorities, then we can have a meaningful conversation about solutions and technology — or, more specifically, about AI.

I will be frank: I strongly believe that AI will become increasingly critical to business resilience. But we must treat it as a means to an end, not as a solution in itself or another trend wrapped in marketing hype. AI is only as effective as the processes, data quality and human judgment that surround it; without these foundations, even the most advanced tools can amplify errors or create false confidence.  In light of your firm’s priorities, consider experimenting with low-hanging fruit where large language models or predictive tools can provide immediate value. 

For instance, use AI to summarize supplier reports, draft customer updates or simulate simple what-if scenarios within your stress tests. These early experiments help align the technology’s current capabilities with the actual needs of your organization, while also building trust and familiarity. Over time, they can become stepping stones toward more advanced systems. This includes integrating real-time signals, continuous monitoring and adaptive procurement strategies that help anticipate and act on disruptions before they escalate.

Finally, this process of acknowledging, monitoring and addressing change is ultimately much more of a mindset than a one-off checklist, because uncertainty is continuous. It is important to involve your partners, suppliers and customers in this journey wherever possible, as they are foundational to how well your system responds and evolves.

While constant change inevitably comes with a cost, it also creates space for renewal. That is, systems that may look and feel a little different, but are ultimately stronger, more adaptive and more aligned with what truly matters.

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Andre Augusto Cire is an associate professor at theat the University of Toronto Scarborough, with a cross-appointment to the Rotman School of Management.