Building Disruption‑Proof Supply Chains

This year’s tariff turmoil is just the latest in a growing list of shocks to global supply chains. Experts say we can expect more frequent and less predictable challenges to stability from geopolitical upheaval, wars, extreme weather, supply‑and‑demand fluctuations—and even the occasional black swan event. As disruption becomes the new normal, companies are evolving new mindsets, strategies and tactics to help them mitigate or even avoid the next shock.

Logistics veteran Rich Piontek remembers the days—before COVID‑19 was part of the vocabulary—when he advised a local university’s supply chain center of excellence on continuing education topics.

While most of the topics recommended by Piontek, president of managed services for fourth‑party logistics provider (4PL) Sheer Logistics, drew a crowd, few seemed interested in learning how to mitigate disruptions to their supply chain operations, even as such risks were beginning to multiply.

“I find it humorous now, but pre‑pandemic, we couldn’t fill the room for a supply chain risk management session,” Piontek said. “Today, you probably are turning people away, or it’s standing room only.”

Indeed, as external shocks become more frequent and unpredictable—this year’s tariff turmoil is just the latest case in point—and pressure mounts to move goods faster, the urgency of disruption‑proofing supply chains has gained significance.

Supply chain leaders are doubling down on strategies like sourcing diversification, improved supplier visibility, AI‑powered analytics and closer cross‑functional collaboration to add a measure of certainty in uncertain times.

“What I’ve seen is definitely an increase in the focus—and at a higher level in the organization—around the need for proactive risk management as well as coordinated risk management across the supply chain,” Suzie Petrusic, senior director analyst in Gartner’s Supply Chain Practice, said.

Material handling and supply chain executives surveyed for the 2025 MHI Annual Industry Report, released at ProMat 2025, ranked “developing a resilient supply chain” among their top actions for managing disruption and ensuring future success.

The reasons are compelling:

• Unpredictable disruptions—events that companies may not be able to anticipate—are becoming more common. Companies surveyed by Gartner said they experienced an average of 17 “unfamiliar” events that impacted their supply chain operations over the past 12 months.
• The variety of potential supply chain shocks is multiplying as challenges to normal operations arise from increasingly frequent extreme weather events, cybersecurity threats, increased trade friction, geopolitical instability and even the growing fragility of America’s electric power grid.
• Supply chain disruptions are costly. Accenture estimates that companies leave $1.6 trillion in revenue on the table annually due to their inability to respond to disruptions. The average company surveyed faces losses of 8.2 percent, or nearly $1.9 billion.
• Disruptions also erode profitability, Accenture’s survey noted, with companies taking a 23 percent hit on earnings. Customer satisfaction and market responsiveness also suffer as product lead times increase by 40 percent.

‘Larger Shift’ Behind Tariff Response

Experts say responses to recent tariff uncertainty illustrate how companies have evolved since the early days of the pandemic in their approach to disruption‑proofing their supply chains.

On one level, businesses have been scrambling to avert short‑term impacts—shippers are frontloading inventory to get in ahead of announced tariffs, and manufacturers are searching for new suppliers in countries less affected by the proposed levies.

“The way that we’re seeing companies react to it is almost COVID 2.0,” Greg Mueller, vice president of customer strategy for supply chain design software provider Optilogic, said. “It’s that level of disruption that this can produce for companies, especially ones that rely heavily on imported goods or cross‑border moves.”

However, Mueller says there’s also a “larger shift” occurring, with companies adopting a new approach to building resilience in their supply chains. The strategy involves using predictive analytics and scenario modeling to weigh all alternatives and choose the best options to mitigate disruptions.

“What this has done for a lot of companies is they’re really building ways of dealing with disruptions and uncertainties into their business rhythm,” Mueller said. “They’re thinking about how to proactively run those scenarios, assess risks and deal with disruptions.”

Patrick Hoffmann, managing director at global supply chain consultancy Inverto, agrees, noting that the “lens has shifted from firefighting to structural change” as companies move from scrambling to control the latest disruption to investing in systems, technologies and processes to mitigate future disruptions.

In addition to strengthening supplier engagement through dual‑ or multi‑sourcing strategies, Hoffmann said, more companies are building capabilities in data transparency and scenario modeling—for example, setting up a “resilience cockpit” to monitor end‑to‑end supply chain risks.

Adding positions or assigning new responsibilities to an existing team member to bolster the supply chain risk management function is also part of the structural changes companies are making now, according to Gartner’s Petrusic.

“What I’m seeing is either creation of new roles where the person’s full‑time job is to build a resilience program for their supply chain, or in other cases, it’s a head of strategy who has a new project on their desk, which is to figure out risk management for the supply chain,” Petrusic said. “A lot of the clients that I’m talking to are coming and saying, ‘I’ve got this new mandate, where do I start and what do I do?’ I’m having those conversations more and more.”

Rethinking Optimization

The focus on risk management is also propelling another shift that has been in the making for longer toward a new perspective on supply chain optimization—one considered an exercise in maximizing operating efficiency while minimizing inventory, warehousing, transportation and other costs.

An Inverto survey of chief procurement officers earlier this year identified mitigating supply chain risk as the top contribution of effective chief procurement officers and their teams, ahead of cost optimization.

“Surprisingly, many mid‑sized firms are still chasing the lowest cost—until the next crisis hits,” Hoffmann said, noting that top supply chain organizations enhance resilience by understanding where risk exists throughout their supplier base and balancing those risks against cost considerations.

As important as it is to build agility and flexibility into supply chains, making the business case for risk‑mitigation measures can be difficult. While the actual costs of, for example, carrying a “just‑in‑case” inventory buffer are known, it’s hard to put a price tag on a disruption that hasn’t happened.

“We know how much this inventory sitting there costs us, but we don’t know how much potentially this disruption costs us,” Tony Pelli, practice director for security and resilience for The British Standards Institution (BSI), said. “Factoring that in can be really difficult, but it’s essential for companies to build in the cost of not having that kind of optionality.”

John McDermott, senior director of supply chain services for MHI member St. Onge, said the company’s supply chain design business was once driven largely by tactical internal factors such as the need for new warehouses to facilitate growth. Lately, however, disruptions and external events have become a driving force.

“All of the things that have been happening over the past five years—the pandemic, tariffs, port strikes, labor shortages—have really required companies to be more strategic and put a lot more thought into how to build more resilience into their supply chains,” McDermott said.

The Building Blocks of Resilience

Companies that excel in specific areas of supply chain management are better positioned to navigate trade volatility and other disruptions, according to Rob Handfield, executive director of the Supply Chain Resource Cooperative at North Carolina State University and a professor at the university’s business school.

Since 2017, the cooperative has provided supply chain metrics on more than 800 companies to the Drucker Institute, which combines them with other indicators of good management to produce the Management Top 250 list of best‑run firms it co‑publishes annually by The Wall Street Journal.

Earlier this year, Handfield and his team added new metrics to create the Tariff Resilience Index, scoring 841 companies on four key capabilities that are predictors of a company’s capacity to landscape since the Trump administration rolled out its trade policy earlier this year:

• Purchasing management systems can provide critical visibility into a company’s supplier base—”Part A of tariff resilience,” Handfield says—and the ability to conduct a spend analysis that identifies how much is being spent and where, which is essential data needed to map supply chains effectively.
• Strategic sourcing capabilities include the ability to segment suppliers not only by importance but also according to how they will be impacted by tariffs imposed on a specific category of goods and services, and in turn, how seriously that will affect your operations.
• Breadth of supply‑market intelligence means understanding and being able to conduct “what‑if” scenario planning on all potential responses to tariff‑related disruptions, whether it involves transhipping, importing into a foreign trade zone (FTZ) or relocating production to another location—offshore, onshore or nearshore.
• Collaboration with supply‑chain partners: Deeper partnerships with suppliers and other partners across the value chain have proven key to improving efficiency, customer satisfaction and sustainability. Chaos surrounding tariffs has underscored the value of working with suppliers to respond to a common threat.

Click here to read the full article.