Myriad issues stressing supply chains are raising tough questions for businesses over the costs and benefits of managing risk
Resilience in the Spotlight
Once a behind-the-scenes focus, supply chain risk management has become a critical asset for businesses facing global disruptions. Companies that strengthen supply chain resilience reap rewards from natural disasters and geopolitical tensions. Businesses investing in diversified suppliers, local sourcing, and advanced risk assessment tools, such as those offered by Everstream Analytics, have gained a strategic advantage. In contrast, those prioritizing lean, cost-cutting measures are more vulnerable. With mounting pressures from strikes, storms, and new regulations, such as U.S. restrictions on Chinese components, proactive companies are innovating to stay ahead.
Costly But Essential
Implementing resilient supply chain strategies is complex and costly, yet profitable in the long run. Research from Oliver Wyman reveals that resilient companies saw a revenue growth of 23% from 2018 to 2023, compared to 15% for those lagging. Many, however, still lack effective strategies or board-level buy-in. Solutions range from using AI tools to analyze suppliers’ suppliers to increasing local component sourcing, as seen with Jabil’s initiatives in moving some supply from China to Mexico. Yet almost 40% of companies still have no contingency plan, underscoring the need for greater investment in resilience.
My Take
Today, businesses that embed resilience into their supply chains will lead the market tomorrow. The real advantage lies in crisis mitigation and the capacity to drive consistent growth, even amid uncertainty. Resilient supply chains can attract top-tier clients who prioritize stability and reliability in their partnerships. Companies that embrace resilience will also have a unique opportunity to leverage data insights for innovation, uncovering efficiencies and trends that create long-term competitive advantages.
#SupplyChainResilience #RiskManagement #BusinessStrategy #GlobalTrade #SupplyChainTransformation #Manufacturing
Link to article:
Credit: Wall Street Journal