How CEOs Can Prepare for Climate Change-Related Supply Chain Disruptions

Climate change is causing supply chain disruptions that can have a significant impact on businesses. Extreme weather events like floods, wildfires, and hurricanes can cause sudden disruptions that lead to a rise in essential goods and materials costs, straining industries across the board. Power outages can also cause operational consequences like an inability to maintain factory schedules and on-time deliveries, and even employees unable to make it to work.

To prepare for these disruptions, CEOs must assess the ripple effects of climate change on the supply chain. Big data and artificial intelligence (AI) technology can provide a clear picture of critical events that are big and small, such as road closures, flooding, chemical spills, or fires, all of which have the potential to threaten a company’s supply chain and logistics. AI can help a business identify unfolding severe weather disasters and how they impact routes or create landslides, and correlate them with the location of suppliers, warehouses, fleets, and ships.

CEOs should also practice preventative table-top exercises to make sure their company is ready to mitigate the consequences of a threat. Start at the end of the supply chain and work your way back, including key people, locations, and assets involved in every step of the process. Include key team members from every company department to thoroughly think through all contingencies around severe weather and potential power grid failures and how these might impact operations. Risk intelligence solutions can also help supply chain teams prepare for the disruptions of climate change and manage weather incidents in real-time to meet customer demand, reduce losses, and speed up recovery.