Enterprise Resilience Assessment—A Quantitative Approach

Abstract

Enterprise resilience is a key capacity to guarantee enterprises' long-term continuity. This paper proposes a quantitative approach to enhance enterprise resilience by selecting optimal preventive actions to be activated to cushion the impact of disruptive events and to improve preparedness capability, one of the pillars of the enterprise resilience capacity. The proposed algorithms combine the dynamic programming approach with attenuation formulas to model real improvements when a combined set of preventive actions is activated for the same disruptive event. A numerical example is presented that shows remarkable reductions in the expected annual cost due to potential disruptive events.Sustainability 2019, 11, 4327 2 of 13 manage this complexity. Prior and Hagmann [9] state that today, a significant challenge, lies in the accurate characterization and quantification of resilience. Dalziell and McManus [10] suggest that resilience was firstly proposed in the field of ecology by Holling [11], who stated that resilience is how a system behaves when it is in equilibrium, and it is stressed and moved from this stability. In other words, it is a system's ability to withstand a major disruption within acceptable degradation parameters, and to recover in an acceptable time and with composite costs and risks [12]. Doorn [13] performed an analysis that shows that different disciplines employ various definitions of resilience and conceptions of its relation to vulnerability. Erol et al. [14] define enterprise resilience (ER) as the capacity to lower the level of vulnerability to expected and unexpected disruptions, its ability to change itself and to adapt to its changing environment, and its ability to recover in the shortest possible time. Scholz et al. [15] state that resilience incorporates the capability of a system to cope with the adverse effects that a system has been exposed to and distinguish between specified (known events) and general resilience (unknown events). Hollnagel [16] defines resilience as a system's capacity to prevent, recognize, anticipate and react to risks before their adverse consequences take place. Levalle and Nof [17] focuses the attention on supply chains and defines resilience as the inherent ability of a supply network agent and/or the emergent capability of a supply network to (i) anticipate errors and conflicts, (ii) prevent them from creating disruptions to normal operation, and (iii) overcome disruptions with minimum quality of service loss, within sustainable use of resources. In light of this, Kamalahmadi and Parast [18] consider three phases for supply chain resilience, which are (i) anticipation; (ii) resistance; and (iii) recovery and responses. In the same line, Ponomarov and Holcomb [19] identify readiness, response, and recovery, as the main necessary capacities to build resilient organizations. Takin into account that resilience is a multidisciplinary and multifaceted concept, its enhancement requires efficient strategies to deal with and manage disruptive events.Most author...

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