The need for operational resilience | McKinsey

The Imperative of Resilience

The COVID-19 pandemic highlighted the critical link between operational efficiency and economic prosperity, forcing companies to adapt to remote work, supply chain shocks, and changing logistics. McKinsey research indicates that disruptions occur every 3.7 years, costing companies nearly 45 percent of one year’s EBITDA over a decade. Building resilience is no longer optional; it is essential to protect against risks while driving productivity.

Strategic Approaches to Resilience

Leading organizations are building resilience through three primary strategies: revisiting their global asset footprint to reduce single points of failure; digitizing operations end-to-end to improve visibility and agility; and transforming business models for cross-functional efficiency. By regionalizing supply chains and leveraging new analytics, firms can better anticipate fluctuations and ensure business continuity.

Digital Transformation and Future-Proofing

End-to-end digitization allows companies to see beyond their immediate tier-one suppliers, providing the visibility needed to respond to disruptions. Research suggests that integrating advanced digital technologies can yield significant performance improvements, including up to 90 percent increases in productivity and 80 percent reductions in lead times. Corporate leaders from IBM and Danone emphasize that resilience is an ongoing process of adaptability, sustainability, and technological investment.