Supply chain management has evolved in recent years. In the past, the focus was on cost reduction across procurement, manufacturing operations, inventory management and logistics. However, now, supply chain leadership needs to push their teams to foresee and detect vulnerabilities that may or may not currently exist.
Modern supply chains are structured to optimize operations, but are not necessarily engineered to withstand global environmental shifts, like water and energy scarcity. Although contingency planning could involve some additional cost under normal business conditions, it could help protect the company and provide flexibility in the event of a significant business disruption. That’s why companies large and small are re-thinking their operations systems in order to build a contingency plan for environmental shifts and threats that could seriously disrupt their business in the not-too-distant future.