**London**: As businesses confront unprecedented risks from geopolitical conflicts and climate change, experts emphasise the need for comprehensive supply chain risk management. Insights from a recent webinar highlight the importance of proactive strategies and advanced technologies in safeguarding operational continuity and enhancing competitiveness.
In a climate where business operations face a multitude of risks including natural disasters, geopolitical conflicts, and climate change, the importance of robust supply chain risk management practices has gained prominence among companies seeking to maintain their competitive edge. This trend was explored during a recent webinar hosted by Everstream, Prewave, and Sphera, three specialists in the field.
The urgent need for proactive risk management strategies was illustrated by the outbreak of war in Ukraine, where early warning signs were pivotal. “These are examples of early warning signals that we need to inform our customers about, so that they can take action before calamity actually happens,” stated Adam Lee, senior director of sales at Sphera. Such insights underscore the necessity for businesses to monitor risks that may impact supply chains.
Sphera has been actively engaged in supply chain risk management following its acquisition of Riskmethods in 2022. Alongside Everstream and Prewave, the company offers software solutions designed to assist businesses in identifying and managing risks that threaten operational continuity. David Shillingford, co-founder of Everstream, emphasised the critical nature of daily data analysis in spotting potential risks early. “Particularly in the areas of extreme weather and climate change, we have a wealth of data,” he noted.
Shillingford referenced findings from the Risk Report 2025, which indicate that flooding poses a significant threat to operations, especially in the United States. He explained that while geographical factors such as location topography remain constant, the warming climate has led to increased precipitation during storms, accentuating the risk of operational disruption when facilities are flooded.
Beyond natural disasters, there are various other hazards companies must navigate, including those affecting the supply of agricultural commodities and the competition for rare earth elements amid geopolitical tensions. Lee highlighted the declining financial health of suppliers as another critical factor to monitor in risk assessments.
Successful risk management hinges on the ability to effectively map the supply chain and identify where vulnerabilities lie, not only amongst direct suppliers but extending to tiers deeper in the supply chain. Shillingford emphasised this need for comprehensive mapping to illuminate concentrated risks, particularly if multiple Tier 1 suppliers depend on the same Tier 2 source.
In an environment where supply chains grow increasingly complex, Prewave’s Jonas Artmeyer discussed the necessity for “superintelligence,” suggesting that artificial intelligence (AI) is integral to managing this complexity. He pointed out that as businesses strive to comply with regulations such as the proposed Corporate Sustainability Due Diligence Directive in the European Union, there is a pressing need for automation in supply chain monitoring processes.
Artmeyer delineated a framework of risk management levels, starting from compliance with regulations and concluding with sophisticated predictive analytics that enable businesses to make informed decisions before competitors. He illustrated the swift response capabilities offered by enhanced risk management practices, citing scenarios such as trade tariffs impacting supplier relationships.
Companies frequently face challenges in proving the financial viability of their investments in risk management solutions. Sphera presented a concrete case involving an automotive supplier that opted to implement risk management tools following unexpected delivery failures. Lee detailed how the investment yielded significant benefits, including a 35% reduction in air freight costs, a 90% decrease in response times, and avoiding potential price hikes.
The shift towards recognising the value of effective supply chain risk management not only reflects an evolving business landscape but also the increasing necessity for organisations to adapt to the complexities of modern supply chains.
Source: Noah Wire Services
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