Supply chain woes carry high risks, big rewards for some companies

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Subscribe to enjoy similar stories. Supply chains that underpin the economy are facing ongoing stress from geopolitical tension, labor disruption and natural disasters. Some companies say they’re gaining an edge in their markets with tools aimed at managing the risks, but it doesn’t come cheap or easy.

A new generation of strategies and technologies to manage risk is growing as the strains in supply chains persist following the upheaval during the Covid-19 pandemic that left many companies scrambling to plug gaps simply to remain in business. “It was sort of a niche area, supply chain risk management, and then came Covid, and then really it became a backroom-to-boardroom [issue]," said Mirko Woitzik, global director of intelligence for Everstream Analytics, a risk management firm. “All of a sudden, supply-chain management or risk management was a competitive advantage." The pandemic punished companies that had prioritized lean inventories above all else, but the years since have seen a series of events that pushed companies to take a longer-term approach to managing risk.

A recent strike by dockworkers at a swath of U.S. ports raised the stakes for many American importers and exporters. Hurricane Helene, which pummeled the Southeast U.S.

in September, disrupted businesses well outside the storm zone, including in auto plants in Texas and Michigan, according to an analysis from Everstream. The conflict in the Middle East over Gaza has also upended oceangoing transport. New regulations are also adding to the urgency for companies to better understand their supply chains.

U.S. businesses in particular face government pressure to reduce reliance on China, including the use of some Chinese suppliers. Legislation passed by the