Resilient Supply Chains: From Shocks to Strategy, Make Risk a Strength

Supply chain shocks are now the norm. From global pandemics to global tariffs to cyberthreats supply chain risk management is more critical than ever before.  

In fact, "Supply chain disruptions can cost companies up to 45% of one year’s profits over the course of a decade." The cost isn’t just operational - it’s strategic, impacting growth forecasts, investor confidence, and long-term planning cycles.

Leaders who turn risk into advantage will navigate these challenges and become winners in their industry. "Turning disruption into advantage means understanding where volatility can open doors: for example, by optimizing production footprints, securing more flexible sourcing models, or rethinking logistics strategies with a long-term view." Robust supply chain risk management is an ongoing process, constantly adapting to cater to emerging risks. 

Developing a supply chain that is not only more resilient but more adaptable to overcome macro and micro changes is critical. Here are a few actions to consider in your supply chain management:  

Getting the risk assessment right is key to building out an effective risk management strategy and ensuring all aspects of risk are considered. Information to consider in the supply chain risk assessment includes: 

• A supply chain map showing how different parts of the supply chain interact and indicating where there may be any problems – including details of tier 2 and 3 suppliers and any risks associated with them. 
• Key supplier details, including their basic information and financial statements, if available. 
• Results of a supplier evaluation, from a survey or interview, provide better understanding of the risks associated with that supplier. 

With the above, business leaders can identify risks and conduct a risk evaluation, explore the cause and effect of a risk, and a risk grading process (a look at the risk likelihood and scale of impact).

With the risk assessment in hand, leaders translate the findings into a strategy with flexibility and agility in mind. One popular guide for supply chain risk management is the PPRR model. It stands for: 

This model gives general guidance for responding to risks. Actions to consider as part of the strategy are:  

• Multiple sourcing – allows the business to move fluidly between different suppliers in the event of issues 
• 'Right' shoring – Striking the right balance between offshore, nearshore and onshoring  
• Regular stress testing to uncover risks  
• Inventory and capacity planning – when is it right to stockpile?  

Access to reliable data is crucial when trying to increase agility. Platform-based ecosystems can help by integrating all supply chain tools and synchronizing timelines and therefore optimizing processes sustainably. To unlock the benefits of supply chain resilience, invest not only in building up but also managing a strong ecosystem.

Implementing new technologies turbo-charge analytics by gathering more data than ever before, benefiting your predictive power enormously.  

With the volatility of the business environment and cyber and regulatory threats periodic assessments of suppliers are not sufficient. Organizations need to "Move away from pointintime assessments to continuous monitoring, utilizing automation and opensource intelligence."

A strong supply chain doesn’t happen by chance. It is built through consistent monitoring, smart use of data, and decisive risk management. Transformation takes commitment: every tier, every capability, every relationship matters. 

As Maersk's CEO Vincent Clerc said, "When considering supply chain reconfiguration, companies must account for layered complexity and recognize that meaningful transformation requires sustained, long-term commitment to building new capabilities and relationships throughout the value chain."

Every risk matters. The strongest chains are based on insight. Are you ready?