Appraising Supplier Economic Resilience in the Post-COVID Era

Abstract

Resiliency is the ability to sustain growth and prosper during adverse disruptions. This translates into continuing to provide profitable service with operational efficiency amidst exceptional situations. At the very minimum, company buyers can view a supplier’s financials as that could convey the vital signs of operational stability, which is the underlying platform of resiliency. In this paper, we view a supplier as an operational process and employ process behavior analysis tools combined with analytics to decipher the operational resiliency of two competing companies. We demonstrate how one can glean operational resiliency by viewing several common financial indicators and their behavior over time. High variability in these indicators reflects a firm’s inability to deal with disturbances that may arise from systemic or external causes. In contrast, stable behavior reflects the ability to self-heal and absorb the effects of disturbances. While many more factors and indicators need to be considered to obtain an overall resiliency picture, this analysis focused on several to demonstrate the approach's potential.