Building supply chain resilience in European SMEs

Empowering traditional and tech‑savvy European SMEs to innovate together and strengthen Europe’s industrial ecosystems.

In the contemporary industrial landscape, the global economy has been fundamentally reshaped by a succession of unprecedented crises, most notably the COVID-19 pandemic, the geopolitical instability resulting from the conflict in Ukraine, the rise of protectionist trade policies, and recent threats to maritime commerce in critical chokepoints such as the Strait of Hormuz. These events served as a catalyst, exposing profound fragilities within international supply chains and revealing that many Small and Medium Enterprises (SMEs) were significantly insufficiently prepared for such high-impact, systemic shocks. In this context of heightened volatility and continuous disruption, traditional reactive models have proven insufficient; resilience has transitioned from an operational advantage to a structural necessity for economic stability and survival.

The RISE-SME project

To address these vulnerabilities and foster a more sustainable, globally competitive industry, the European RISE-SME project was established in 2024 with the primary objective of developing a methodology that enables European SMEs to detect and anticipate disruptions before they manifest. This initiative recognises that SMEs are the primary vehicles of innovation within European industrial ecosystems and that strengthening their digital maturity is essential for achieving European strategic autonomy.

This ambitious mission is driven by a multidisciplinary consortium consisting of ten partners from five European countries: Spain (ZLC, ITA), Italy (CNR and SIAV), Germany (Fraunhofer, FIWARE and Digital Hub Management), Portugal (INESC TEC and CITEVE), and Ireland (F6S). The project is coordinated by the Zaragoza Logistics Center (ZLC). By combining high-level academic research with practical industrial expertise (through industry clusters), RISE-SME aims to bridge the gap between advanced technology providers and traditional SMEs, ensuring that the European supply chains can navigate future disruptions with operational independence.

Position within the European ecosystem

The RISE-SME project is deeply aligned with the broader European Industrial Strategy, which identifies 14 key ecosystems as the fundamental pillars of the continent’s economic stability and strategic autonomy. These encompass a vast industrial spectrum, ranging from Aerospace and Defence to Construction, Health, and Tourism. While the RISE-SME framework is designed with the scalability to benefit this entire landscape, the consortium has strategically focused on four critical sectors: Agri-food, textile, digital, and mobility-transport-automotive. This selection is based on two primary criteria. First, these four ecosystems represent a significant engine of the European economy, collectively accounting for approximately 20% of the EU’s Gross Domestic Product (GDP). Second, and more importantly for the research methodology, these sectors are characterised by different operational architectures and vulnerability profiles:

Agri-food: A sector defined by its high dependency on raw materials (such as seeds and fertilisers), biological cycles, and climate conditions. Within this ecosystem, resilience is a matter of food security, requiring robust strategies to manage extreme seasonality and volatility in supply.
Textile: A labour-intensive and globalised industry facing intricate supply chain pressures. Its path to resilience lies in seamless digital process integration, improved traceability, and the adoption of circular economy models to overcome resource scarcity.
Digital: Serving as the technological backbone for all other sectors, its resilience hinges on the availability of cloud infrastructure, cybersecurity, and the strategic production of critical components like microchips.
Mobility, Transport, and Automotive: An exceptionally complex ecosystem where manufacturing relies on just-in-time production. This makes it uniquely vulnerable to logistical delays, semiconductor shortages, and geopolitical shifts in the sourcing of essential raw materials like lithium.

These four sectors are represented by two hubs per country to avoid bias, while providing a comprehensive view of the challenges across both sites.

The RISE-SME methodology

The RISE-SME project has developed a multi-stage methodology built upon a foundation of academic literature review analysis and in-depth consultations with stakeholders across the four strategic industrial ecosystems. Its ultimate goal is to operationalise the Supply Chain Resilience Fit Model (Fig. 2), a framework designed to help SMEs build greater robustness in an era of chronic instability.

The model is built on a fundamental premise: resilience is inherently context-dependent, emerging from a precise alignment between the supply chain strategies and the specific external realities of its industrial sector. To capture this dynamic, the model adopts a ‘matching’ perspective that connects three fundamental pillars.

The first of these pillars is context, which encompasses the external variables an SME cannot control, from geopolitical instability and climate disruptions to sector-specific features like seasonality in agri-food or supply chain complexity in automotive.
The second pillar, intervention, refers to the strategic levers industries can actively manage, such as supply chain design, operational strategies, and resilience capabilities like supplier redundancy or production flexibility.
The third pillar is performance, which represents the ultimate measurable outcome: the capacity of a supply chain to maintain functionality and recover quickly after a disruption. Supply chain resilience performance is not merely about survival in the moment of crisis, but about the ability to sustain operations and return to normalcy with minimal loss.

Within this framework, the concept of ‘Fit’ represents the critical alignment between Context and Intervention. True resilience is achieved only when an SME’s strategic choices are tailored to address the specific vulnerabilities of its environment. A cybersecurity strategy suitable for a digital firm, for instance, may prove useless for a wine producer facing harvest volatility.

On the other hand, digital technologies, including artificial intelligence (AI), digital twins, blockchain, robotics, or edge computing, among others, are identified within the RISE-SME project as essential enablers of resilience. By functioning as the bridge between Intervention and Performance, these technologies allow SMEs to translate strategic alignment into tangible results. A Digital Twin, for example, enables managers to simulate flexibility without disrupting operations, while AI-powered platforms make it possible to monitor and coordinate complex supplier networks in real time.

Yet for these technologies to deliver on their promise, their impact must be measurable. This is precisely what the RISE-SME methodology aims to achieve by breaking down the concept of resilience into three functional dimensions:

Readiness refers to the proactive phase of the resilience cycle, requiring high levels of supply chain visibility to identify critical resources and establish necessary redundancies, such as safety stocks or alternative sourcing routes, before a disruption occurs.
Response captures the firm’s capacity to act during a crisis, measuring the immediate agility and flexibility needed to reconfigure production or distribution networks and mitigate the shock.
Recovery, or rather transformation, as sometimes business as usual is no longer an option, involves implementing contingency plans to return to pre-crisis performance levels or, when necessary, adapt to a new operational reality.

These three dimensions (Readiness, Response, and Transformation) are rigorously tested through quantitative simulation models, such as system dynamics and discrete-event simulation, which serve as digital laboratories capable of recreating a wide range of crisis scenarios. By running hypothetical ‘what-if’ simulations, RISE-SME can model specific disruptions like energy instability, cyber threats, or geopolitical volatility and systematically evaluate the effectiveness of different mitigation strategies before real-world implementation.

The Supply Chain Resilience Index

To translate these strategic resilience dimensions into precise, actionable measurements, the RISE-SME project has applied the Supply Chain Resilience Index (SCRI). While many conventional resilience indices rely on broad environmental data or subjective survey opinions, the SCRI draws on two complementary data streams. The first is real-world process data, typically extracted from standard Enterprise Resource Planning (ERP) systems, which capture a company’s actual operational history. The second derives from the ‘what-if’ simulation scenarios outlined previously, which model disruption events to project supply chain behaviour under stress. From these sources, key operational figures are aggregated into two primary indicators: service level, which measures performance by comparing deliveries against planned quantities and dates, and cost variances, which measure efficiency by tracking deviations from expected costs.

These two metrics are then transformed into a single, easy-to-interpret number through multivariate process capability analysis. In practice, this method treats the supply chain as a controlled system with defined performance limits, applying statistical modelling to calculate the mathematical probability that the system will remain within its functional boundaries despite external shocks. By comparing a system’s capability before, during, and after a disruption, the index can show quantitatively how much resilience is gained through a specific technological intervention. This turns resilience from an abstract concept into a measurable performance outcome.

Key progress and milestones

The RISE-SME project has achieved significant progress in its first two years, establishing a solid foundation for its resilience framework. First, a detailed analysis of the four strategic industrial ecosystems has been completed, mapping their distinct supply chain structures, vulnerabilities, and disruption patterns to ensure that subsequent interventions are context-sensitive. Building on this understanding, advanced quantitative simulation models have been developed for each ecosystem, creating digital laboratories capable of recreating crisis scenarios and testing mitigation strategies before real-world implementation.

In parallel, the project has identified the key technologies that enable supply chain resilience, such as AI, digital twins, and blockchain, and mapped over 60 suppliers, primarily European SMEs, that offer these solutions. A web-based matchmaking tool has been designed, with the aim of connecting these technology providers with traditional SMEs to help the latter overcome their digital maturity gaps. At the conceptual level, the Supply Chain Resilience Fit model has been developed and validated. Complementing this theoretical work, an impact assessment methodology has been established to evaluate how technological solutions perform under stress. Throughout this period, the consortium has also actively engaged with industry stakeholders through sectoral workshops, ensuring that research remains grounded in operational practice.

Future outlook

Looking ahead to the last year of the project, the focus will shift from methodological foundations toward practical action, alliance-building, and an implementation roadmap. First, pilot projects will be designed in each of the four industrial ecosystems. To achieve this, the consortium will employ a Business Model Game, a simulation tool that defines clear technological implementation pathways based on real-world use cases. Building on the data and insights gathered, a Decision Support System will be developed, enabling SMEs to autonomously evaluate and select the most effective strategies for building resilience. At the same time, alliance-building workshops will be organised, not only focusing on each sector but also expanding towards technology providers, targeting consultancies, start-ups, and research centres from diverse regions to offer SMEs a broader range of alternative sources for critical technologies. In terms of dissemination and exploitation, a detailed plan will be developed for the project’s key exploitable results, while scientific publications and participation in international conferences will intensify to share findings with the research community.

In conclusion, the RISE-SME project represents both a technical advancement in supply chain management and a catalyst for a more resilient European industrial model. But its impact expands beyond resilience. Indeed, it can enable sustainability and climate neutrality by integrating environmental indicators into its framework, enabling SMEs to reduce resource and energy consumption through advanced technologies. Moreover, it can advance towards European strategic autonomy by mapping EU-based technology suppliers and reducing critical dependencies in sectors such as microchips and raw materials. Last, and most importantly, it can safeguard employment and social cohesion by equipping SMEs with tools to withstand crises, protecting local jobs and community stability. All in all, RISE-SME’s ultimate goal is to empower SMEs to move from being passive victims of disruption to active protagonists of a sustainable, autonomous, and socially responsible economy.

Disclaimer

This project has received funding from the European Union’s Horizon Europe research and innovation programme under the Grant Agreement number 101138645. Views and opinions expressed are, however, those of the author(s) only and do not necessarily reflect those of the European Union or the European Health and Digital Executive Agency. Neither the European Union nor the granting authority can be held responsible for them.

Please note, this article will also appear in the 26th edition of our quarterly publication.