How prepared is your supply
chain for the unexpected?
Not all surprises are good ones. Some are downright disruptive to the point of negatively
impacting the customer experience—and the bottom line. Here are four steps companies
can take to increase supply chain resiliency and better mitigate risk.

THE PAS T FE W YEARS HAVE SEEN NORTH AMERICA— and other locations worldwide—shaken by a series of natural disasters that have devastated communities. These extreme events have likewise had a profound impact on private-sector supply chains. With many organizations’ networks consisting of multiple suppliers and subsuppliers, a disruption can quickly prompt cascading trouble for the processes that depend on them—and, ultimately, a negative impact on customer service and the bottom line.

Clearly, the ability to respond to a disruption is of strategic importance. Creating supply chain resiliency demands a combination of tactical actions at the site level and broader strategic changes at the network level. So how can a company build supply chain resilience in order to prepare for the unforeseen?

Here are four steps companies can take to minimize the fallout:

1. Establish situational awareness. That is, know what the potential disruptions are for a given location and the subsequent severity of impact to the organization as a whole. Included are acts of nature, such as weather or natural disasters (hurricanes, earthquakes, floods, and heavy snow/ ice). Alternately, fires, power failures, chemical leaks, rogue employees, acts of terrorism, labor strikes, rising tariffs, and changing governmental policies can also be disruptive.

Further, transportation shortages or port strikes can negatively impact a supply chain, as can a failure in information technologies (IT), whether accidental (an employee mistakenly opens an email with a virus) or deliberate (cyberattacks or ransomware). There’s also the potential for reputational risk due to any bad publicity that results from a crisis situation.