Worsening climate spells danger for supply chains

By Karen Hanna 

Droughts. Ice. Fires. Floods. Hurricanes. 

When it comes to tales of woe, subscription supply chain tracking company Resilinc lately has cataloged a little bit of everything. And Resilinc CEO and co-founder Bindiya Vakil can perceive a throughline in many of the events contributing to once-in-a-lifetime supply chain disruptions.  

“Climate changes everything. We have to look not at today. We have to look five years out what is going to happen to the region that we’re operating in, or that we are planning to operate in,” she said.

Leaders in the supply chain industry are focusing on circularity and sustainability as part of their strategic resilience plans, leveraging the lessons learned from the pandemic to address climate change – the next chronic, progressive disruption, according to the Association for Supply Chain Management (ASCM). 

“I think climate is at the top of the list of a policy, the next big disruption to be prepared for,” said Peter Bolstorff, executive VP for ASCM.  

The husband of a third-grade teacher, he has developed an aversion to one word he’s heard too much: Normal.  

Normal, he believes, is over. He tells his wife, “Now is normal.” 

“Anybody who hasn’t taken the point of view that disruptions are just going to get bigger and more frequent in the future ... hasn’t looked back at all in the last 10 years. Because, if you think about it, whether you take weather, politics ... natural disasters, they’re only getting more [frequent] and bigger,” he said. 

In monitoring webs of suppliers and customers that subscribe to its service, Resilinc can illuminate sometimes-opaque supply chains. What it sees isn’t always pretty.  

“We know that supply chains have the power to change lives and be made to drive economic prosperity, but supply chains have a dark side,” Vakil said. 

She believes many of the world’s problems — from poverty to human trafficking — reveal themselves in the frayed links of supply chains. With better management, the chains could be more robust — and the problems underlying them might be addressed. 

The company is pushing its customers to accept their role, risks and responsibilities when it comes to climate change. 

Resilinc's most recent report, charting six months of supply disruption ria from the first half of 2021, highlights how the world is changing.  

In Texas, a massive ice storm in February 2021 wrecked resin-production capacity, leading to force majeure claims by petrochemical companies. 

In June, floods in Germany led to more force majeure notices — this time by suppliers of metals, including steel.  

Out West, fire season starts earlier, lasts longer and causes more damage. Citing the Insurance Information Institute, the Resilinc report on supply chain risks states, “As of June 2021, the Western United States had seen a 30 percent increase in wildfires over the same period in 2020.” 

Looking ahead, a second Resilinc report on drought, predicts this year’s la Niña — a weather pattern that typically brings drier conditions — will usher one of the 10 warmest years on record.