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Extreme weather events are becoming more commonplace as global warming continues to pose a significant threat, and your supply chain could be suffering as a consequence. Wildfires, like the recent ones in Canada and Rhodes, are more regularly hitting the headlines, and even repeated natural occurrences, like El Niño, are having significantly more disruption on the supply chain as resulting temperature rises and flooding are even more widespread. The effects of these global weather phenomena are vast, affecting a wide range of industries, especially in sectors such as food and beverage.
According to Kris Timmermans, Accenture’s Lead in Supply Chain and Operations: ‘It is vital that companies build agile, digital supply chain networks that can withstand operating in a world characterised by ongoing disruption.’ Supply chains should be looking toward building a more resilient supply network as well as considering the impact these natural events have on the increasingly interconnected and global world in terms of the global economy and consumer habits.
The goal is not only to survive an extreme weather event, but to ensure business continuity and customer satisfaction. The solution? Investing in a supply chain planning solution now to build a more resilient and diverse supply chain.
How does Extreme weather impact the supply chain?
The supply chain is a delicate ecosystem that relies on the seamless movement of goods, raw materials, and information across various stages. Extreme weather can disrupt this ecosystem in several ways:
Extreme weather events can hinder transportation infrastructure, causing delays, disruptions, or even complete shutdowns. For example, the blockage of the Suez Canal in 2021 due to a cargo ship grounding and the low water levels in the Panama Canal severely impacted global trade routes, leading to logistical nightmares and increased transportation costs.
Weather phenomena like wildfires and droughts can devastate agricultural regions, affecting crop yields and livestock. Such disruptions can lead to shortages, increased prices, or the unavailability of specific food and beverage products.
Supply Chain Disruptions
Disruptions in one region can ripple through the entire supply chain, affecting suppliers, manufacturers, distributors, and retailers. Companies heavily reliant on a single supplier or geographic location are particularly vulnerable to such disruptions.
How can you be prepared?
While it’s impossible to control or prevent global weather phenomena, businesses can take proactive steps to mitigate the impact on their supply chains:
Enhance Supply Chain Visibility
Implementing advanced supply chain planning solutions, like sofco Planning, provides real-time visibility into the entire supply chain. This would enable your business to identify potential risks, monitor inventory levels, and proactively respond to disruptions.
Relying on a single supplier or geographic region increases vulnerability. Establishing relationships with multiple suppliers and diversifying sourcing locations can help distribute risks and minimise the impact of disruptions.
Developing contingency plans for transportation disruptions, such as identifying alternative routes or modes of transportation, can help mitigate the impact of weather-related disruptions. Collaborating closely with logistics providers and monitoring weather patterns can enable proactive decision-making.
By diversifying supplier networks, enhancing supply chain visibility, and building resilience, companies can mitigate the impact of disruptions caused by extreme weather events. Implementing an End-to-End Supply Chain planning solution offers businesses the opportunity to build a more resilient and diverse supply network, ensuring the ability to maintain customer service levels and protect revenues.
While we cannot control the weather, we can take proactive measures to safeguard our supply chains against its unpredictable forces. By prioritising resilience and preparedness, businesses can navigate through extreme weather events with greater ease, maintaining their operations, and safeguarding their success in the face of uncertainty.