Minimizing Supply Chain Exposure to Extreme Weather & Natural Disasters


Extreme weather is an unpredictable, yet a reoccurring possibility for business owners. Weather and climate-related disasters have caused $2.4 trillion in economic losses and nearly 2 million deaths globally since 1971, according to the World Meteorological Organization. These numbers should be sending a signal that if their supply chains are not prepared now for an extreme weather event or natural disaster, they should start planning to ensure that they can continue business to the best of their abilities.

When natural disasters strike, employees’ safety is at risk, assets are vulnerable, significant delays could occur, and companies could be displaced or shut down entirely. For these reasons, advance preparation could prove to be essential to minimizing the damage these extreme events can cause. If one step in the supply chain crashes, the whole company can face a multitude of damages. A few considerations for strengthening supply chains include:

  • Using diverse suppliers and production locations
  • Working collaboratively with suppliers to develop a resilient supply chain
  • Creating or updating disaster recovery plans
  • Assessing whether accounting systems can capture information to quantify and document losses
  • Assessing whether employees have been adequately trained to capture relevant loss data and documentation
  • Reviewing insurance policies
  • Backing up records and other critical information.

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Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.