Could climate become the weak link in your supply chain?

Much of global economic production is organized around a complex system of interdependent supply chains. Supply chains facilitate the production of everything from computers and cars to lifesaving medicines and food, and support world trade in goods that is worth almost $20 trillion annually. End products have up to many thousands of parts, sourced from diverse geographies around the world. Over time, these supply chains have been honed to deliver maximum efficiency and speed.

But questions about supply-chain risks and resilience are now being raised in the context of the global COVID-19 pandemic as well as acute weather events. As climate change makes extreme weather more frequent and/or severe, it increases the annual probability of events that are more intense than manufacturing assets are constructed to withstand, increasing the likelihood of supply-chain disruptions.

Recent MGI research examines how industry value chains are exposed to a broader set of risks, including climate events. This work also examines vulnerabilities within specific companies and broader value chains, financial losses, and ways to bolster resilience.

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Πηγή: mckinsey

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