Stop pretending agility is just resilience: A Cynefin wake-up call for New Zealand's agriculture

Resilience has become a buzzword for almost all supply chain discussions in recent years. However, COVID-19-related restrictions, geopolitical problems, and devastating weather events in New Zealand have given us a clear lesson that resilience alone is insufficient. In fact, resilience as it is understood as merely bouncing back from the disruptions, is already outmoded. It's time for resilience to be dethroned, and agility to take its place.

But why am I suggesting agility replaces resilience? And how can New Zealand implement this idea in its agriculture and dairy sectors, considered the backbone of our economy?

Perhaps the answer lies in our lack of understanding of complexity, and if we clearly categorised the problems originating from mega events, it could help our supply chains to respond better. Decision-making frameworks such as Cynefin are designed to help leaders make sense of uncertain environments. We propose employing this Framework (Cynefin is the Welsh word which was designed by Snowden and Boone (Snowden & Boone, 2007), as a layered approach to for Habitat (Cynefin is the Welsh word for Habitat) understanding complexity. When applied to supply chains, this model can help categorise supply chain disruptions into one of five categories: simple
(predictable), complicated, complex, chaotic, and disordered. Traditionally, we
approach supply chain problems from a predictable, complicated or, at times,
complex point of view. To cater to such problems, supply chain managers seek to implement standard protocols, carry buffer stocks and rely on established
strategies. Today, however, dairy supply chains in New Zealand face a different
reality where disruptions are increasingly becoming complex, chaotic and even
disordered, and it appears that supply chains are not well prepared (Deloitte, 2024; Fehrer, Stringer, Kareem, & Shalpegin, 2024).

Think about the recent shocks New Zealand agriculture has faced: COVID-19-related border closures, labour shortage problems, cyclone Gabrielle and fluctuating global milk demand. Each shock exposed the vulnerabilities of the New Zealand dairy supply chain. This was in part related to management’s rigid, protocol-driven solutions to manage these vulnerabilities.  For example, a traditional resilience approach to labour shortages emerging from border closures would be to increase local recruitment or maybe streamline the training of current staff. But, during border closures, there were local restrictions as well, and employees were getting sick, so there was no labour available at all, highlighting how fragile resilience actually was.  For example, NZ dairy supply chains saw this following Cyclone Gabrielle in February 2023, where companies were unable to move milk from farms to processing plants, forcing farmers to dump it on their farms, despite economic and emotional pressure (McMullan, 2023).

The Cynefin framework would categorise some of these disruptions as complicated, some complex, and others were chaotic and disordered. These disruptions require adaptive and experimental responses where supply chain managers should have the ability to dynamically reallocate resources, and be able to rapidly adjust production and explore new market channels.

Agility as a strategic capability provides these adaptive and experimental responses. Agility has been discussed as a component of supply chain resilience; however, by placing it under the umbrella of resilience, we risk hiding its true importance. Therefore, it's time to remove it from such “comfort” and note its true potential. Resilience means facing shocks and bouncing back from them. But Agility means adapting dynamically by quickly anticipating, preparing, reacting, stabilising and thriving amid disruptions. For New Zealand agriculture, agility looks like investing in digital supply chain traceability, scenario simulations, flexible employment and transportation practices, and diversified import and export strategies.

Mega dairy companies such as Fonterra are already following an agility trajectory for their supply chains by introducing smart monitoring, real-time payment analysis, insightful decision making and innovative product development. For example, consumer interest in high-quality dairy-based protein is booming because of increased health awareness. Fonterra recognised this interest and quickly developed protein-enriched milk and yogurt products. This was only possible because of the agile practices they follow, such as flexibility in their manufacturing processes, and having adaptive sourcing processes and a dynamic logistics system.

While Fonterra has invested heavily in agility and innovation-related practices, Cyclone Gabrielle revealed how vulnerable the broader New Zealand dairy sector remains. Much of our agricultural heartland went from a stable or complicated domain to a chaotic domain in the matter of a few hours. Roads and other transportation infrastructure were destroyed, livestock was in chaos, and feedstock supplies were abruptly terminated. Standard SOP-driven supply chain resilience failed in this scenario (Transport, 2023). However, several farmers showed remarkable agility by arranging emergency helicopters, by collaborating across industry lines and dynamically re-routing feeds and livestock. This type of agility is exemplary - cultivating spontaneous collaborations, and evidence of nimble networks rather than hardened, predetermined resilience.

To achieve such agility, Cynefin risk categories can help us understand the nuanced complexity surrounding extreme events and their related disruptions:

• Simple domain: Simply maintain hygiene and follow compliance (e.g., milk safety, routine processes).
• Complicated domain: Develop expert-driven practices (advanced inventory and logistics planning, implementing blockchain for traceability).
• Complex domain: Build experimentation and flexibility (flexible labour, diversified products, real-time digital monitoring, dynamic pricing strategies).
• Chaotic domain: Foster crisis adaptability (temporary relocation strategies, emergency coordination, rapid response teams).
• Disorder domain: Strengthen rapid assessment and categorisation of unknown disruptions (cross-functional teams, immediate crisis communication protocols, regular scenario planning drills).

When agriculture managers understand this categorisation and the challenges each case presents for their supply chains, they can see that resilience alone with just buffer stocks, is a limited strategy. They will start thinking in terms of agility, where every second matters amidst the disruptions. The agricultural sector in New Zealand is facing unprecedented challenges, and it cannot afford to absorb the shocks and run in survival mode. It must thrive.  It may sound uncomfortable that resilience in its traditional form is dead. But let's focus on agility - the Cynefin framework can provide us with the clarity to do so.

References

Deloitte. (2024). Measuring supply chain uncertainty in New Zealand.  Retrieved from https://www.deloitte.com/nz/en/Industries/infrastructure/blogs/measuring-supply-chain-uncertainty-in-new-zealand.html

Fehrer, J., Stringer, C., Kareem, S., & Shalpegin, T. (2024). Building resilience: How NZ supply chains can withstand global shocks. University of Auckland. Retrieved from https://www.auckland.ac.nz/en/news/2024/10/23/building-resilience--how-nz-supply-chains-can-withstand-global-s.html

McMullan, H. (2023). Dairy farmers forced to dump milk after cyclone cuts road access. 1 News. Retrieved from      https://www.1news.co.nz/2023/02/20/dairy-farmers-forced-to-dump-milk-after-cyclone-cuts-road-access/

Snowden, D. J., & Boone, M. E. (2007). A leader's framework for decision making. Harvard Business Review, 85(11), 68.

Transport, M. o. (2023). Aotearoa New Zealand freight and supply chain strategy (MOT4806_Aotearoa-Freight-and-Supply-Chain-Strategy-p09-v03). Retrieved
from https://www.transport.govt.nz/assets/Uploads/MOT4806_Aotearoa-Freight-and-Supply-Chain-Strategy-p09-v03.pdf