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balance between efficiency and resilience is the key trade-off faced by supply chain managers, according to a recent research paper from the Economist Intelligence Unit (EIU), the business-to-business arm of analyst firm The Economist Group. Based on interviews with supply chain executives from Whirlpool Corp., Coca-Cola Co., Home Depot, Inc. and other companies, the paper highlights supply chain problems in the aftermath of the extraordinary swings in demand over the past two years.

According to a major IBM survey this summer, more than half of global business leaders believe their enterprises are not adequately prepared to handle a highly volatile, increasingly complex business environment. Based on a survey of 1,500 chief executives from 60 countries and 33 industries worldwide, IBM found that while eight in 10 CEOs expect the global business environment to grow significantly more complex, only 49 percent believe their organizations are equipped to deal with it successfully — the largest leadership challenge identified in IBM's eight years of research.

"[N]ow is the time for companies to reassess supply chain processes to ensure that progress towards efficiency does not boost the potential for failure in the face of economic, operational or environmental disruptions," EIU concludes.

Business attitudes across the globe — jarred by the European sovereign debt crisis, sagging consumer confidence and continuing market fluctuations — are vacillating between confidence and caution, and volatility is likely to remain a permanent feature of the global business environment. While the financial crisis revealed key vulnerabilities of an interconnected global economy, it has also provided a needed catalyst in helping organizations create more dynamic, resilient and responsive supply chains to. A clear majority of leading industrial companies still see cost as their main priority while managing supply chains, despite emerging evidence that excessive focus on cost has damaged relationships. A majority of the leading industrial manufacturing companies have created supply chain models that appropriately balance agility, sensitivity to risk, quality and cost. They plan to enter into more long-term contracts with fewer suppliers — with cost being the key driver for much of the collaboration. Read our report to find out how leading companies are adapting their business models and employing new supply chain tactics to manage risk while capitalizing on opportunities.

The Stanford Global Supply Chain Management Forum is a leading research institute in partnership with industry and the Graduate School of Business at Stanford University that advances the theory and practice of excellence in global supply chain management. Working with approximately 25 industrial organizations, the Forum is actively engaged with a broad cross-section of leading and emerging industries to identify, document, research, develop, and disseminate best practices in a dynamic and increasingly global economic business environment.