Supply Chain Disruptions by Climate Change

Supply chains are a vital part of everyone’s life as they allow us to access goods and services from across the globe at our doorstep, making our ever-growing consumption demands the very backbone of the economy. Yet, the challenges faced by supply chains are rarely talked about in the context of climate change.

The impact of Climate change can be reduced into two major areas of threat facing businesses with a wide-spread supply chain network . The more obvious type of threat comes in the form of natural disasters, unexpected physical events and unusual weather changes that can disrupt the flow of goods and services, resulting in severe lack of resources and a reduced availability of raw material. Given the scale of globalisation, an environmental disruption of this kind in one region can affect the supply chain of industries on the other side of the planet.

The other major impact on business by the climate crisis is to manifest in the socio-economic and political sphere. Drastic changes in consumer preferences will arise as popular demand shifts toward more carbon neutral products and services, which will then be followed by costly government regulations.

These threats can impact supply chain structures in ways most companies would simply not be able to account for. But with the right track and trace IoT technology, companies can gain visibility over entire end to end supply chains allowing for scenario planning and valuable information collection. While, AI and Data Analytics technologies can harvest the corresponding flow of information and identify the ways in which companies can adapt and mitigate the crisis to the best of their ability.