Weather-Proofing Supply Chains Against Climate Risk

If the last couple of years taught us anything, it’s that no supply chain is risk-free and that visibility into where products and goods come from is essential to a resilient supply chain. Gone are the days of flying blind. Yet, while COVID-19 induced lockdowns and labor shortages thrust the fragility of the supply chain into the spotlight, there are still scores of other risks companies need to consider. One key risk area worthy of consideration? Extreme weather events due to climate change.

From severe heatwaves, fire-ravaged and drought-stricken regions, record-breaking tornado strikes, to catastrophic flooding, headline-creating weather events are setting new records year after year. Climate change is leading to the higher frequency and severity of weather disruptions. In 2021, Resilinc reported over 800 weather-related events; that number was up 130% from the year prior. These events are wreaking havoc on supply chains. The data shows that last year alone, disruptions due to hurricanes and typhoons affected over 123,000 supplier sites and impacted over half a million parts. More recently, an incident of rain and flooding in Southeastern China impacted over 12,000 sites, affecting the production of over 64,000 different parts.

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