How Exposed Is Your Supply Chain to Climate Risks?

A study of 12,000 supplier sites in the U.S., mainland China, and Taiwan found that only 11% were fully prepared for climate-related disruptions.

by

and

Sumit Vakil

by

and

Sumit Vakil

May 02, 2022

Jonathan Knowles/Getty Images

Summary.

Climate change is posing major challenges to supply chains. This article — based on a collaborative research project conducted by the University of Maryland and supply-chain-mapping firm Resilinc — assessed the climate-related risks of 12,000 supplier sites in the United States, China that serve 100 original equipment manufacturers in the high tech, auto, and consumer goods industries. It offers advice on how OEMS can improve their resiliency to climate-related disruptions.

Hurricanes, tornadoes, flooding, heat waves, and wildfires — weather-related calamities have alarmed boardrooms across industries and awakened leadership teams to the high degree of financial risk posed by climate change. Executives now are asking: “How exposed is our global supply chain network? Which critical sites have the highest exposure in terms of revenue impact? Which types of events could potentially affect each site? Are appropriate business continuity plans in place to protect our operations?”

Sandor Boyson is research professor emeritus and was a founding director of the Supply Chain Management Center at the University of Maryland’s Robert H Smith School of Business. Organizations he has advised on supply chain risk and competitiveness include the U.S. National Institute for Standards and Technology, the U.S. Department of Defense, the U.S. Commerce Department, the World Bank, Microsoft, and DHL.
Michael D. Gerst is an associate research professor at the University of Maryland’s Earth System Science Interdisciplinary Center. His research focuses on integrating climate science into public and private sector planning and decision-making.
Laharish Guntuka is an assistant professor in supply chain management at the Rochester Institute of Technology’s Saunders School of Business. His research focuses on supply chain disruptions and the management of supply chain risks.
Tom Linton is a senior advisor at McKinsey & Company and an independent director of and advisor to other companies. He previously served as chief procurement and supply chain officer of Flex and held similar positions at LG Electronics, Agere Systems, and Freescale Semiconductor.
Greg Muraski is a writer and communications specialist at the University of Maryland’s Robert H. Smith School of Business.
Bindiya Vakil is CEO and founder of Resilinc, a provider of supply-chain-mapping services and risk-monitoring data. She is a founding member of the Global Supply Chain Resiliency Council and sits on the Advisory Board of the MIT Center for Transportation and Logistics.
Sumit Vakil is chief product officer and cofounder of Resilinc. He previously served in leadership roles in product management and engineering at successful startups such major companies as Brocade and Cisco.

How Exposed Is Your Supply Chain to Climate Risks?

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