Expert Column Supply Chain Paradigm Shift in the Age of Polycrises: Transition from Maximizing Efficiency to Building Resilience

Supply Chain Paradigm Shift in the Age of Polycrises: Transition from Maximizing Efficiency to Building Resilience

In recent years, the global supply chain has faced unprecedented, complicated crises. The traditional efficiency-oriented model exposed fundamental limitations, such as traffic infrastructure congestion, container supply and demand imbalance, geopolitical tension escalation, economic uncertainty expansion, and frequent extreme weather conditions caused by climate change. This phenomenon implies structural changes, rather than temporary disruptions, and requires a fundamental review of the supply chain paradigm of businesses.

In this column, we will examine the inevitability of the transition from the single objective of maximizing efficiency to dual goals: balancing efficiency and resilience.

1. Transition from Efficiency to Resilience

The supply chain has long been designed in a direction where cost reduction and efficiency are maximized. However, throughout the past years, repetitive supply chain disruptions have shown us the efficiency alone is not enough. 2024 global containership schedule reliability (an index showing how accurately vessels comply with ETD and ETA) remained at around 50~55% and plummeted compared to pre-COVID19 level of 70~85%. The worsening reliability reflects the structural vulnerabilities of global logistics network, not a short-term fluctuation simply.

The prolonged disruption can have a detrimental impact on financial status of businesses. From financial perspective, a single prolonged disruption event can reduce an enterprises’ EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by 30% to 50%.^[1] This clearly illustrates the economic implication of the supply chain vulnerabilities, and establishing resilience is not a simple operational issue but a strategic issue that is directly linked with enterprise value.

[Containership Schedule Reliability] (Source: Sea-Intelligence^[2])

1.1 Risk Paradigm Shift

OECD’s Supply Chain Resilience Review provides a key insight. The essence of supply chain resilience lies in effective management and adjustment of risks, not a complete removal of them.^[3] The shift in this perspective is based on complexity theory; when interconnectivity and non-linear dynamics of the global supply chain are taken into account, we acknowledge that preemptive prevention of all risks is practically impossible and economically inefficient.

2. The Era of Polycrisis

2.1 Concept of Polycrisis

The concept of “Polycrisis” adopted by UNCTADU (United Nations Conference on Trade and Development) refers to an interplay and amplification of multiple crises, rather than a single crisis. In system theory, this means a non-linear amplification effect caused by the interaction, rather than a linear sum of individual crises.

2.2 Polycrisis

Trade policy uncertainties intensify the complexity decision-makings on supply chain. According to a survey announced by Reuters^[5] on June 2025, 90% of the U.S. companies are concerned about the tariff-related supply chain disruptions and this shows the direct impact the uncertainties can have on the supply chain.^[4] Critical Imports and Supply Chains Strategy of the U.K. would like to offer systematic responses through government-private sector governance establishment and enhance the efficiency of risk identification and responses through institutional innovation, such as an establishment of Critical Imports Council.^[5]

Geopolitical crises directly impact supply chain disruptions. Due to the Red Sea crisis, carriers had to divert around the Cape of Good Hope in Africa, resulting in an approximately 10% increase in transportation distance and a decline in container vessel operation capability by 5 to 9%. This diversion aggravated port congestion at the point when the trade volume recovered and put pressure on capacity. The detour route protects cabin crew and cargo from the conflict zone but deteriorates carbon emission, increases travel time, limits transportation capability, and raises costs.

Climate change caused by the recent global warming can also have an impact on the supply chain. Restrictions on the passage of ships prompted by drought clearly demonstrate the physical reliance of physical infrastructure on climate. This raises the necessity of incorporating climate risks in designing the supply chain and requires the review of the traditional route optimization model.

De-carbonization regulatory pressures can also affect the supply chain. In the ocean sector that accounts for about 3% of the worldwide greenhouse gas emissions, the emission can rise by 5 to 8% by 2050, if not addressed. The International Maritime Organization mandated the reduction of emissions by 30% by 2035 and 65% by 2040. Around the world, ammonia-fueled vessels (eco-friendly vessels not emitting any CO2) are merely around 25 of them.

In contrast, Maersk is already operating 13 dual-fuel methanol vessels that are more environmentally friendly than bunker fuel and has placed an additional order for 20 of them. Nestlé has chosen ECO Delivery option, aiming for greenhouse gas emissions reduction by 65% for all Maersk cargo transportation.^[6] However, the adoption of advanced fuels is still limited and the expansion of new fuel infrastructure and management of safety risks will be key challenges for ensuring resilience.

Effects of theses supply chain crises can be seen in the inflation. Global factors such as supply chain bottlenecks and overseas demands accounted for approximately 2 percentage points (pp) of the inflation observed in 2021 and 2022, representing about a quarter of the total inflation during that period. In Europe, production relies more heavily on overseas inputs so the international route contributed up to 4 pp to inflation.^[7]

3. Strategic Response: From Efficiency to Adaptability

3.1 Transformation of Supply Chain Strategies

Global companies are restructuring their supply chain strategies fundamentally in the polycrisis era of global supply chain disruptions. Global advanced companies are gradually expanding and localizing supply chain networks. 79% of firms are diversifying supply vendors and 71% of them are proactively investing in localization. These changes refer to not only simple strategic adjustments but a fundamental restructuring of global sourcing strategies. In addition, 83% of organizations are aggressively putting investment in friend-shoring strategies — strategies to build and transfer supply chains to politically and economically friendly countries.^[8] In other words, it shows a paradigm shift from seeking cost-efficiency to improving resilience.

3.2 Technology Innovation and Digital Transformation

Technological innovations will be the core of resilient supply chain networks. By utilizing data-based insights, firms could optimize operations and establish predictive resilience plans going beyond from simple responsive management. The introduction of predictive analysis technologies, such as AI, machine learning and deep learning, have a potential to dramatically enhance supply chain visibility and predictability. With AI-based predictive maintenance and repair system, Maersk has reduced unplanned operation and 20% of maintenance and repair costs. CMA CGM is using AI in overall operations, including shipping route optimization, container handling and inventory management.^[9]

Supply chain simulation using Digital Twin technology — a technology that replicates physical objects, processes, and systems in the real world into a virtual space for simulation, analysis, and optimization — supports refining of scenario-based planning and achieves dynamic optimization through real-time data integration. Nestlé collaborated with Coupa to build a supply chain digital twin, designing an efficient supply chain based on factory production capacity, which reduced decision-making time by 60%.^[10] Samsung SDS, a global logistics company, also utilizes machine learning and generative AI to detect supply chain risks in real time and develop rapid response strategies, enabling uninterrupted sustainable logistics services even amid unpredictable supply chain crises and rapid environmental changes.

3.3 Economy of Resilience: Investment and Vulnerability

The financial rationale for investing in resilience is becoming increasingly clear. Paying freight rates 10% higher than market prices can lead to significant increases in COGS (Cost of Goods Sold) amounting to millions of dollars. However, a cost of maintaining a fragile supply chain is far greater.^[11]

This underscores the need to reconceptualize resilience not as a cost but as a strategic asset that generates compound returns.

When examining the on-time arrival rates of shipping alliances, Gemini Cooperation achieved an overwhelming first place with 89.9% based on total arrivals and 86.9% based on arrivals by route. This is significantly higher compared to MSC's 79.0% and 80.2%, Premier Alliance's 55.4% and 56.0%, and Ocean Alliance's 66.9%. Such achievements are the result of strategic investments in large-scale network restructuring to enhance resilience and provide stable services amid global supply chain instability.^[12]

3.4 Future Outlook: Antifragility of Supply Chains

Future enterprises must move beyond resilience and actively embrace the concept of “Antifragility,” where systems become stronger through shocks. Antifragility goes beyond merely withstanding supply chain disruptions; it transforms crises into opportunities for growth and evolution, becoming more robust in the process.

Gartner's research clearly illustrates the current state of global supply chains. A majority (63%) remain fragile, only 8% have achieved full resilience, and a mere 6% have reached the Antifragility stage.^[13] This suggests that most companies are still unprepared to effectively respond to unpredictable disruptions. A few leading organizations that have achieved antifragility are in the most advantageous position to continuously create value even during times of massive uncertainty and chaos. Their key differentiator lies in a fundamental shift in management philosophy and decision-making processes. Antifragile organizations move away from rigid metrics like traditional plan achievement rates or goal achieving rates, instead focusing on resource utilization efficiency and indicators evaluating real values to fundamentally redesign their decision-making processes.

Supply Chain Top 25 companies in 2024 exemplified leading practices in building antifragile supply chains. A common characteristic among these organizations is their focus on understanding customer value, investing in demand management, and driving innovation in ESG. Notably, they do not seek false certainty through AI-based tools but rather understand and grasp how uncertainty impacts supply chain performance and act based on that understanding.^[14]

4. Conclusion

The transition from maximizing efficiency to integrating resilience has become a central challenge in supply chain management. It is not about strengthening risk management but requires a new fundamental understanding of the supply chain as a complex system. Building diversified networks, enhancing digital capabilities, internalizing sustainability, and establishing cooperative governance are key elements of the transition.

Ultimately, companies who recognize resilience as a strategic differentiator and internalize it as an organizational capability will take competitive advantages. In an environment where uncertainty has become the norm, the core question must be redefined as "Can we evolve through crises?", not "Can we withstand crises?" This shift in perspective will be the key strategy to navigate the era of multiple crises.

[1] Ware2Go. (2024, October 17). 6 essential strategies to maximize supply chain resilience. https://ware2go.co/articles/supply-chain-resilience/
[2] Sea-Intelligence. Schedule reliability
[3] OECD. (2025, June). OECD supply chain resilience review: Navigating risks. https://www.oecd.org/en/publications/2025/06/oecd-supply-chain-resilience-review_9930d256.html
[4] Reuters. (2025, June 3). Trump tariffs stoke supply chain worries for US businesses, survey shows. https://www.reuters.com/world/us/trump-tariffs-stoke-supply-chain-worries-us-businesses-survey-shows-2025-06-03/#:~:text=June%203%20%28Reuters%29%20,brokerage%20Gallagher%20showed%20on%20Tuesday
[5] Reuters. (2024, January 17). Britain sets out plan to strengthen critical supply chains. https://www.reuters.com/world/uk/britain-sets-out-plan-strengthen-critical-supply-chains-2024-01-17/#:~:text=LONDON%2C%20Jan%2017%20%28Reuters%29%20,more%20resilient%20against%20global%20shocks
[6] Reuters. (2025, June 4). Shipping industry still at sea as it tries to navigate to net zero. https://www.reuters.com/sustainability/decarbonizing-industries/shipping-industry-still-sea-it-tries-navigate-net-zero-2025-06-04/#:~:text=Fortescue%27s%20Green%20Pioneer%20vessel%20last,Rights%20%2C%20opens%20new%20tab
[7] Federal Reserve Bank of Richmond. (2025, January). Supply Chain Resilience and the Effects of Economic Shocks
[8] The Business Continuity Institute. (2024, January). What does supply chain resilience mean in 2024?. https://www.thebci.org/news/what-does-supply-chain-resilience-mean-in-2024.html
[9] Digital Defynd. (2025). How can AI be used in the Shipping Industry [10 Case Studies] [2025]. https://digitaldefynd.com/IQ/ai-use-in-the-shipping-industry-case-studies/
[10] Coupa. (2024, Aug). The Complete Guide to Supply Chain Digital Twins. https://www.coupa.com/blog/the-complete-guide-to-supply-chain-digital-twins/
[11] XENETA. (2025, March 28). The Biggest Global Supply Chain Risks of 2025. https://www.xeneta.com/blog/the-biggest-global-supply-chain-risks-of-2025
[12] Port News. (2025, September 28). Global schedule reliability holds steady at 65.3% in August 2025, Sea-Intelligence reports. https://en.portnews.ru/news/382534/
[13] Gartner. (2025, May 21). Build Supply Chain Resilience to Arrive at an Antifragile State. https://www.gartner.com/en/articles/supply-chain-resilience
[14] Pondview Consulting, LLC. (2025, Oct, 2). Antifragile Supply Chains: The Next Generation of Productivity. https://pondviewconsulting.com/antifragile-supply-chains-the-next-generation-of-productivity/

JunWoo Jeon

Professor

Current Position) Professor,
Department of Global Logistics, Sungkyul University
Key Research achievements:
Box rates unveiled: Predictive analytics for ocean freight rates
with system dynamics and text mining under supply
chain
disruptions (International Journal of Production Economics, 2025)
Freight rate forecastion in shipping and air transport
(Samsung SDS, 2021~present)
Development at a liner freight rate forecasting model
(Korea Ocean Business Corporation, 2024~present)
Patent Registered: Method and device for calculating
actual vessel capacity based on schedule
reliability for ocean freight rate forecasting.

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