In a recent ACM webinar, Dr. Moshe Vardy (Rice University) presented his thesis on how our business world has been overly focused on efficiency and optimization, while resilience is being ignored. A key result of this is our management and continuing trials in combatting the COVID 19 Pandemic.

Vardy defines resilience as the ability to recover readily from illness, depression, adversity, or the like. Resilience can be seen here to have both personal and economic impacts.

Vardy quotes a Wall Street Journal (William Galston, March 2020) “Efficiency Isn’t the Only Economic Virtue: What if the relentless pursuit of efficiency, which has dominated American business thinking for decades, has made the global economic system more vulnerable to shocks? Efficiency comes through optimal adaptation to an existing environment, while resilience requires the capacity to adapt to disruptive changes in the environment. “

Below we see that others are beginning to weigh in, understanding the efficiency vs resilience paradox. McKinsey shows a quick diagram (Figure 1) of a playbook for resilience management and configuration. 

Figure 1 – A View of McKinsey & Company’s playbook on resilience management

Vardy further quotes: “Decision making in the industrialized nations of the western world increasingly can be characterized by its scale and speed of implementation. Another facet of decision making is the narrowness with which problems are defined and the equally narrow range of alternatives sought for a resilient solution.” (M.A. Goldberg, Environment and Planning, 1975)

One example of this is found in the aerospace and automotive sectors which often rely on Just In Time deliveries for bulk, components, for example.

JIT Manufacturing is a methodology aimed primarily at reducing times within the production system as well as response times from suppliers and to customers. JIT reduces inventory costs by reducing inventory and the parts should arrive “just in time”. Indeed, JIT manufacturing is highly efficient but assumes best-case logistics. JIT is efficient at the expense of resilience. Many of us would readily understand this problem such as in the case when a severe winter storm presents itself and locks down our cities for up to a week. Municipal roads generally get cleaned up quickly but tractor-trailers which have long distances to haul may have to deal with accidents, road closures etc., in the meanwhile while will upset the JIT schedule.

Vardy quotes Sharon Terlep+Annie Gasparro, (WSJ, Aug. 2020) “Blame lean manufacturing. A decades-long effort to eke out more profit by keeping inventory low – left many manufacturers unprepared when Covid-19 struck. And production is unlikely to ramp up significantly any time soon.

The difference temporally that Vardy claims between Efficiency and Resilience are that Efficiency is a short-term optimization while Resilience is a long-term optimization. We obviously need to get to the long-term optimization as aerospace is a the long term endeavour.

In the aerospace business, we would all be aware of failures related to pursuit of optimization vs a focus on resiliency. In the following Figure 2, McKinsey indicates that not all manufacturers are short term optimization oriented. It has been possible to isolate data sets which indicate that the resilient focused companies are better able to recover from severe downturns and the 2008 economic downturn is used as an example in this case.

Figure 2: The Benefits of Resilience

Further to the aerospace business in dealing with their challenges at this time, airlines are cutting significant capacity (40-100%) as the passengers will not risk flying with potentially COVID – carrying passengers. Civil aircraft assembly plants (in the US) are closed indefinitely or are operating with reduced volumes. These lower production rates are also affecting the sub-supplier networks. While this seems obvious the need to start planning resiliency into their business plans is now particularly important. New tools need to be developed deploying Artificial Intelligence and Data Science.  This would call for the establishment of a High-Performance Computing facility in Manitoba which would be available to industry to use for their development projects.

This article was authored by A Koncan, EnviroTREC

Visit Dr Moshe Y.Vardi’s home page at:

Read a report by McKinsey on Resilience: